Over the years, insurance companies have developed complex methods and algorithms to determine risk and have calculated insurance premiums according to that risk. At the same time, we have seen car insurance for female drivers become cheaper, suggesting that at least in the opinion of insurance companies, female drivers are statistically less likely to instigate an insurance claim. The obvious suggestion here is that female drivers are at least a little safer. This may well be true, but as of December 21st this year, the practice of using gender as a part of this calculation will become outlawed under EU law following a ruling by the ECJ (European Court of Justice).
The problem here of course is in how the insurance companies choose to deal with this. On the one hand they could simply raise the cost of insurance for women, to meet that of men. It would perhaps be a kinder approach to both reduce the cost for men, and increase the cost for women so that they meet in the middle. This would minimise the impact of the ruling on female drivers, whilst also having some degree of benefit for their male counterparts. My suspicion, albeit a cynical one, is that we will see little change at all, and that they will simply find alternative ways to factor in the difference in premium in order to attempt to circumvent the ruling. With luck, this will be dealt with by the ECJ as swiftly as possible.
There are of course insurance companies that basically specialise in offering insurance primarily to women (Sheila’s Wheels). How they might approach this will be interesting to see.
Not to suggest that women should have more expensive insurance, but it would be nice if the playing field could be leveled at least a little, because I am not convinced that the difference in premium accurately reflects the difference in risk, although I have no evidence to demonstrate that.
There was initially widespread speculation that over the months leading up to the introduction of the new rule, women would see insurance costs spiral by what some sources quoted as being a possible £300. This has not materialised, and so really the jury is still out on how this might all begin to take shape. What is clear is that the calculation for insurance premiums is set to change. Hopefully the results of that change will be positive, but then these are insurance companies, and they do not exactly have a flawless record in the ‘fair and non-discriminatory’ department!