Gender use for insurance ruled unfair

Tue, 01 Mar 2011

Companies cannot charge different premiums for car insurance customers on the basis of their gender, a court in Europe has ruled.

The European Court of Justice (ECJ) said that it is unfair for providers to take gender into account when working out insurance risk estimates.

As a result, women, who are now charged lower premiums than men, will now be required to pay the same premiums levied on their male counterparts.

Earlier this week, the AA said that if the court ruled in favour of removing gender as a factor for calculating insurance risk, it would be "particularly bad news for young women".

"I expect premiums to increase substantially for them, while they will probably fall a little for young men," Simon Douglas, director of AA Insurance, has said.

But in a statement released this morning (March 1st), the ECJ noted: "Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination."

The new rules will come into effect on December 31st 2012.
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