Gender will no longer determine what car insurance quote you receive from your policy issuer because as of this week, car insurers cannot use gender as factor in calculating a consumer’s annual premium.
This is due to the fact that the EU Gender Directive will become effective as of this week. Data showed that historically female motorists are a lower risk to insure because they are less likely to make a claim when compared to males. Therefore, females have also historically been issued lower premiums.
While this levels the playing field between men and women when it comes to getting insurance policies, it may also hurt some female motorists as their premiums will increase by as much as 24%. The data comes from the insurance comparison website Confused.com and also calculated that young female motorists that live in Central London will see their average premiums increase by about £500.
Ironically, while women are hurting, men will actually benefit from the new insurance changes as moneysavingexpert.com proves that in the past men have paid about £300 more than women for their car insurance policy. In particular young men will benefit since their policies tend to be inflated.
Overall, the new EU Gender Directive is thought to possibly reduce the profits that insurers are able to make as they will have to lower their male rates. Ernst & Young the accountant firm estimated that the change will likely cause insurance industry losses over the next year.
Partner at the firm, Catherine Barton, stated that ideally the market will probably only be able to break even over the course of the year with the Gender Directive in place next year it is likely that they will find it hard to make any profit in 2013.
