New gender legislation could lead to higher premiums for customers
An industry debate on gender discrimination is to kick off this month with the publication of draft regulations for the EU's Equal Treatment Directive.
The controversial rules, due to come into force next year, could make it illegal for EU member states to treat men and women differently, including charging different insurance premiums. Although the UK has exercised its right to an opt-out clause, the wording could still leave insurers with little choice but to scrap gender-rated premiums, resulting in price hikes across the market.
Nick Kirwan, protection market director at Scottish Widows, said the industry has to be ready to lobby once the draft rules are published. "The terms of the opt-out clause say that insurers can only treat men and women differently on the basis of 'published information'. This could mean insurers would be expected to publish their claims experience data, putting longer-standing insurers at a huge competitive disadvantage," he said.
Insurers that have been around the longest could lose their competitive edge because new entrants could use their valuable data. In this case, insurers would instead be likely to opt to scrap gender-rated premiums - meaning higher premiums for customers.
"We hope that 'published information' means there has to be general information in the public domain about the different health risks posed by men and women, such as hospital intake statistics and differences in gender-related diseases," Kirwan added.
