European ruling - unisex pricing?

[mattt78]

equal pricing for all

the ECJ is already looking at doing something similar with age. Since these rulings affect life insurance and annuity pricing, the impact there will be even more interesting. Try pricing an annuity without asking how old the annuitant is!

By the way, I think if a man has a baby he is entitled to just the same amount of leave etc as a woman - its only fair due to the physical implications of pregnancy, brest feeding, post-natal depression etc etc. However, since it hasn't happened yet, I can't be sure.

Sheila's wheels in Europe will surely need a serious re-think. The one advantage it may have is that men will still tend to not think to get a quote from them, so they will still perhaps benefit from some kind of selection. In fact insurers are now much more likely to advertise in housewifes weekly magazine and the ad break of 'americas next top model' or whatever, rather than nuts and top gear etc for this reason.

 

[hnhkate]

The big issue will be if this ruling will apply retrospectively, which is still a possibility, and will have huge implications for the life insurance market.

Plus, they won't even be allowed to ask people for their gender when they apply for insurance. How are they going to address letters from now on? they won't be able to use Mr or Mrs etc.

And lets face it, the cost is going to be passed on to the consumer, so for example with car insurance, men generally probably won't notice a huge amount of difference in cost (unless they are 17) - they will probably just increase female rates. It sounds to me like actually, insurers will profit over this and the consumer loses out. Which means they are just making things unfairer for all, going against the reason for the legislation in the first place.

 

[mattt78]

European ruling - unisex pricing? Reply to Thread

I suspect they can get by by adressing customers with their first name instead of a title if they have to. (Although I thought the ruling was just that gender couldn't be used as a rating factor - I don't see why they can't ask for your title.)

The effect is likely to be a redistribution of cost, rather than an overall increase, although there could be some increases in the short term due to increased uncertainty, and some increased admin costs etc.

I think the aim of the ECJ, isn't to make things more fair, but to make them 'more equal'. Unfortunately, the two don't always go toghether, as this case proves.

Also, nobody seems to have focused on the impact on the annuity market. If I want to buy an annuity for, say £50k a year when i'm 60, I would now need maybe £200k more in my pension pot to pay for it. (I made those numbers up, but I'd guess they're in the right ball park). That bothers me much more than a few extra quid to insure my car, and seems even more crazy than the motor pricing. Why is nobody mentioning this?

 

[bystander]

In a way, in pensions unisex already can appear, eg in commutation rates.
There are still two underlying sex related tables as far as I understand. Then you create a single table assuming different wieghts of who you have. In insurance yes it will be a guess.

Sheilas wheels is interesting. I guess how they will move forward is skew towards female in the weighting. In exam reports on the topic, I've seen the suggestion that to get the mix you want you advertise accordingly. Hence the 'pink' image and say advertising in female orientated magazines, adverts between soaps etc could be how they work. For men, perhaps choose adverts mid sport programs etc.

Thats my take on it. But yes it be a shame if/when its here.

Or yes we could end up generating real unisex rates.

 

[Tomahawk]

The insurance market will remain competitive and so the aggregate premium increase will only reflect the extra risk taken. The net impact will be more situations where people will not be able to find insurance that makes financial sense for themselves. This can only be a negative thing.