The European Court of Justice has ruled that, from December 2012, insurance companies may not differentiate between the genders in pricing motor and  life assurance or pension annuities, despite statistics showing that men and women present different risks.

Mike Kemp, Chief Executive, Irish Insurance Federation (IIF) said, “We are disappointed that the European Court of Justice has ruled against the use of gender in underwriting. Gender is just one factor taken into consideration when pricing risk. Many factors are considered when you apply for insurance, such as whether you are a smoker or not when applying for life insurance, and your driving experience and record for motor insurance.  Insurers do not discriminate against anyone, but differentiate where experience justifies it to ensure fair and accurate pricing of risk for all customers.  Removing the ability to take gender into account where relevant will ultimately have negative consequences for consumers across the board”.

At present female drivers benefit from discounted rates for motor insurance, because of their better claims record, and pay lower rates for life assurance because of greater life expectancy than men.  For the same reason men get better rates for pension annuities.  These discounted rates will have to be phased out by December of next year under the European Court’s ruling.

Mr Kemp continued, “Insurers have always priced risk objectively based on statistical evidence and there is no reason why this process should be interfered with. The actual adjustment of rates to comply with the judgment and the timing of any changes are matters for each insurer to decide, but clearly some policyholders in various classes of insurance who previously benefited from discounts based on gender will now not be offered the same discounts and therefore may see their premiums rise”.