Men will pay less as insurers await European gender discrimination ban
Published 22/02/2011 | 05:00
INSURANCE companies will soon be banned from charging men more for car insurance and health insurance, triggering a major shake-up of insurance pricing.
A ruling from the European courts, due on March 1, is widely expected to ban "gender discrimination" across insurance products.
Irish insurers are already preparing to implement the change, which will see dramatically lower car insurance premiums for young males in particular.
Insurers across Europe have routinely "loaded" men for car insurance and health insurance, since men have a statistically higher incidence of car accidents and illness.
It would not be unusual for a 17-year-old male to be charged €600 more for motor insurance than a similarly aged female, according to calculations by David McCormack of SafeGuard insurance in Wexford.
The European Court's Advocat General has already deemed such pricing "discriminatory" on foot of a test case taken last September.
The European Court of Justice is widely expected to affirm those views when it announces its verdict on the test case on March 1.
"Everyone's expecting a ban on gender discrimination," said one senior insurance source in Ireland.
"There's talk that we might be given three years to get away from gender pricing, but some people think it will happen a lot more quickly so we're making plans."
His views were echoed by several other senior insurance sources in Ireland.
"While no one can, at this stage, be certain of the outcome, the likelihood is that the test case will succeed," said Diarmuid Kelly, head of the Professional Insurance Brokers Association.
The impact of the changes will be most pronounced in areas like motor insurance for young male drivers.
Men will also enjoy lower premiums for health insurance, but will pay higher premiums for life insurance, since insurers will no longer be able to factor in the fact that men die younger.
"There may be a short window of opportunity for both sexes to avail of current favourable premium rates while still available," said Tony Gilhawley of actuarial consultancy Technical Guidance.
"Others may be better off waiting until after March 1 to take out a policy or annuity."
Insurance companies are tinkering with their pricing models to try to insure that the changes have a minimal impact on profitability.
"If you're pricing men lower, you have to price women higher," said one source. "The trick is making sure it all balances out and you can protect your income."
The new dawn could also force insurance companies to omit questions on gender.
Mr Gilhawley warns, however, that insurers may find a way to get around this by using the type of car or engine size to identify young male drivers and price accordingly.