A change in the way insurers calculate insurance premiums
The European Court of Justice has announced that the use of gender based risk pricing in insurance will not be permitted from 21 December 2012. The ruling applies to all insurers in the UK market.
This does not impact any current policies that you have in place. Insurers are likely to now use the interim period up to December 2012 to make the necessary changes to their systems and processes and work closely with brokers to ensure a smooth transition for customers.
I attach below some Q&As which have have been compiled.
What has happened?
The European Court of Justice announced on 1 March 2011 that the use of gender based risk pricing in insurance will not be permitted from 21 December 2012. This means insurance companies will not be able to charge different premiums to men and women based on gender risk differences. This applies to all insurers in the UK.
Why are gender differences used when pricing insurance?
Currently, insurance companies apply different premiums, policy terms and benefits to men and women across a range of products based on proven statistical gender differences. For instance, young women usually pay much less for their car insurance than young men based on their respective safety records.
What will this mean to the cost of my current policy?
It does not impact your current policy with us.
When will the changes be applied?
The final date for the transition is 21 December 2012. Premiums quoted after this date will not be permitted to take into account gender risk differences.
How will the insurers implement the changes?
Insurers are likely to now use the interim period up to December 2012 to make the necessary changes to systems and processes and work closely with brokers to ensure a smooth transition for customers.
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