EU moves to enforce gender equality in insurance rates and pension calculations could lead to greater inequality The Actuarial Profession has said.
The warning comes in response to an announcement from Juliane Kokott, Advocate General of the European Court of Justice, who claimed the practice of setting different insurance rates and pension calculations for men and women could be in violation of EU sex discrimination laws.
The Actuarial Profession, the umbrella group for English and Scottish actuaries, countered that gender is a clearly defined differentiator between individuals and is useful for identifying risk levels for the traits typically demonstrated by each gender. Being prevented from identifying two clear groups with different risks may lead to greater unfairness to most members of the groups.
Bill Baker, of the Profession's health and care committee said: "Discrimination is, of course, wrong. But societies have to agree on what we consider discrimination to actually be. Is it unfair to offer lower rates to clearly defined groups of people (such as members of one sex), whose evidenced risk profile means they will on average have lower claims on a fund? If we were to continue down this path, it could mark the end of cheaper insurance products for what actuaries consider, based on hard statistical evidence, to be lower risk groups
He added "If insurers had to give, for example, the same annuity to men and women, despite women living longer, men may well decide not to purchase these more expensive annuities. Insurers providing annuities would then have to price the annuities nearer the higher female rate. So, rather than the cost of an annuity being at the midway point between male and female costs, it would actually be at the more expensive female level."
Duncan Anderson of the Profession's general insurance committee concluded: "Actuaries look at risks based on statistical evidence. If evidence shows that a particular group of motorists are more prone to accidents than other groups then insurers should be able to set prices which reflect this."
