EJC Ruling – Insurance Companies
Posted by admin on March, 9th 2011
This week’s ruling by the European Court of Justice regarding gender discrimination has been hotly debated since the ECJ decided that insurance premiums should not be assessed on sex. The ruling adversely affects women regarding car insurance but also men regarding annuity rates. This is because men have a lower life expectancy than women so payments on annuities will reduce for men and only increase very slightly for women.
According to a survey carried out by My Voucher Codes, 78% of women surveyed are against the ruling, which sees women’s insurance premiums set to rise to be equal to men’s insurance premiums. The reason that women had cheaper car insurance premiums than men is because women are statistically safer on the roads. Women in fact have more low impact accidents but men have more high impact accidents that result in a much higher level of damage and higher rate of write-offs. This costs insurance companies far more in payouts than what women claim for. Those most likely to be affected are women under the age of 25. Whilst premiums for women may rise by around 25% due to the ECJ ruling, premiums for men may only drop by around 10%.
Understandably, many are angry about the ruling as car insurance premiums have gone up massively already. For one lady in our PR Agency, her premium is expected to rise by 100% this year even with maximum no claims. We don’t expect to hear the end of this one for a while yet!
What is interesting is that several insurance companies have been vocal in their complaints about the ECJ ruling, with many speaking out and declaring the changes unfair. Insurance companies such as Diamond and Sheila’s Wheels that are aimed at women have been given an opportunity to reassert their position in the market and attract even greater levels of business thanks to the ECJ ruling. The logic is that more women could be drawn to the brand once the law is in place and as a result, premiums could theoretically be lower with these insurance providers as payouts could be lower. Whether this does become the case or not could be very interesting to see.
The changes are due to come into force in December 2012, so insurance companies and those affected have plenty of time to make arrangements to accommodate the changes.
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