The Gender Directive has been implemented Europe wide. So how did the neighbours cope? Alastair Gerrard explores.
Very few insurers were able to follow suit; the IT and operational requirements were felt to be too extensive, leaving Allianz out on its own.
The German insurance product ratings company Morgen & Morgen has recently tried to summarise the premium changes seen since G-Day in the German market. With Germany not being affected by a tax change at the same time (as is the case in the UK), some interesting movements have occurred.
There have been some large rate changes. For example, a male office worker applying for a €250,000, 20-year term product is now paying €37 less (around 14%) a year on average, whereas a female one is paying €47 (around 25%) per year more.
Occupation classes
Incidentally, the German market has always allowed rates to vary by occupation class. With the varying mix of genders associated with different occupation classes, it is felt that the ability to charge different rates by occupation class will become more relevant and possibly prevalent over time.
By comparison, in the UK, a 30-year-old female applying for a 25-year term assurance will now pay around 30% more, while a male applicant of the same age is likely to pay around 5% more.
One final area of interest is that the German market is technically in something of a state of limbo. While the European Directive was passed at an EU level, it was up to the individual member states to promulgate the legislation requiring the insurance market to move to gender-neutral rates.
The German parliament had planned to pass the legislation in conjunction with the latest legislation required for Solvency II. The ongoing delays in the discussions about Solvency II mean that this has not been passed.
The German regulator, the BaFin, has been forced to write to the German insurers to warn them of the legal risks they still would face in writing insurance business on gender-specific rates.
It appears, therefore, that the UK market may, in general, have been more innovative than other European markets. With the implementation date now a distant memory, though, we wait with bated breath, as insurers analyse the impact their new gender-neutral rates will have on their competitiveness and, more importantly, on their business volumes.
It is not certain that we have seen the end of the gender-related activity. We may see some insurers following the German and Spanish examples and possibly introducing new rating factors for pricing or developing “pink” and “blue” benefits later in the year.
Alastair Gerrard is business development executive at Gen Re
