The Gender Directive has been implemented Europe wide. So how did the neighbours cope? Alastair Gerrard explores.
Changes that have been observed in the Spanish market seem to revolve around developing new product types. Nearly all companies are looking into developing “pink” and “blue” products, i.e. life products with gender-specific cancer benefits attached.
There are also plans in place among the larger market players to introduce new lifestyle-based rating factors. However, all these ideas are still in development phase, and it is likely to be towards the end of the year before any new products are seen.
The insurance market in Ireland has followed a similar course to Spain. Few deals were offered in the run-up to G-Day, but product innovations have started to appear. One of the leading insurers, Irish Life, has added an extra female-specific benefit to its term assurance product.
For life cases with a sum assured greater than €25,000, there is now an additional partial payment of €5,000 on diagnosis of one of a list of pregnancy-related illnesses. This is one of the first attempts in the market to increase the attractiveness of the product to female applicants.
Another country where there was limited innovation in the protection market during the gender transition period is Austria. Here the main focus has been on annuities and has led to the term market being relatively ignored. The way that the annuity market changed over to gender-neutral prices has been directed by the Austrian Actuarial Association (AVÖ).
This cooperation between the actuarial departments of all the market participants and the AVÖ has in effect led to a regulated annuity product emerging in the Austrian market, with pricing assumptions set centrally and not varying between companies.
In the protection market, there was a feeling that the market is not sophisticated enough for companies to try to finesse competitors. While some companies moved to gender-neutral pricing early, others waited until the last moment in the belief that the market is not so price-sensitive.
The biggest changes in the transition period happened in one of the largest European insurance markets. In Germany, Allianz took the entire market by surprise when it made a move ahead of everyone else back in May 2012. Its offer gave its customers the option to choose whether to take a gender-specific or gender-neutral rate.
In the case of term life, it kept female rates unchanged and moved male rates to a unisex rate. There was no guarantee that the unisex rate quoted in 2012 would be the same as the rates post G-Day.
The German market was taken aback by Allianz’s move; practically no other insurers offered any deals.
It was felt Allianz was giving up profits or even writing at a loss in the transition period in order to gain market share and dominance.
