Women's car insurance costs to soar
A CLARIFICATION of EU equality law is expected to increase the cost of car insurance for millions of British women.
As of December 21st 2012 companies won't be permitted to take gender into account when pricing their insurance deals.
The ruling covers all forms of insurance but the motoring sector will be hit hardest: women have always benefited from the fact that members of their gender are statistically less likely than men to have an accident, so their premiums will rise while men's fall, though not by as much, to meet them in the middle.
Younger women will be particularly affected.
A man aged 17-22 will pay, on average, £2,750 a year for car insurance. The female average cost is a staggering £1,068 less.
That's because men in that age group are 10 times more likely to be in a crash involving serious injury than their female counterparts and 25 times more likely to commit a traffic offence within their first three years of driving.
The ruling has received a mixed reaction.
According to a Myvouchercodes survey released yesterday, whether consumers regard the new rule as 'fair' is influenced by a healthy dose of self interest.
78% of women, faced with the prospect of higher car insurance premiums, agreed that the equality ruling was unfair in principle.
On the other hand, almost the same proportion of men, 74%, thought that the ruling was fair.
It seems unlikely to be a coincidence that many men could see the cost of car insurance fall.
We've seen a similarly self interested response from the car insurance industry.
"As an insurer I'm pleased. We will raise rates for young women: we won't bring them down much for young men. That means more profit," Henry Engelhardt, chief executive of the Admiral insurance group, admittedly cheerily.
Meanwhile, Sheila's Wheels, a female only car insurance provider which will see its business model collapse as a result of the ruling was critical of the clarification in the rules.
At the end of 2012, they said, the change will cause, "premiums to rise artificially in a way that no longer truly reflects women's risk as drivers or the cost of their claims."
Clearly these opinions are hard to separate from self interest: fairness has to mean something other than getting the lowest premium or the highest profit you can.
But what's does determine fairness when it comes to insurance?
What is insurance 'fairness'?
The obvious answer is that insurance policies should be based on a fair assessment of risk: the more risky you are, the more you should pay.
As no one can deny, then, female drivers have a lower level of risk than their male counterparts.
Looking away and pretending the genders aren't different is like tying a hand behind women's backs, some argue.
If there's a notable point of comparison shouldn't premiums reflect that?
That's certainly the view of Conservative MEP Sajjad Karim who called the ruling, "a setback for common sense."
"Statistics prove young men have more accidents," he said. "This is a victory for boy racers and a major blow for both democracy and careful women drivers."
But, say critics, just try replacing 'female' and 'male' in that sentence with 'black' and 'white' or 'Jew' and 'Gentile'.
There could be a statistically significant difference between members of those groups too but few would argue that it'd be fair to draw it.
You don't choose skin colour or the religion of your mother, after all. Well, you don't choose gender either.
However, arguing on the basis of perceived unacceptability merely moves, rather than solves, the debate. Many of those willing to accept a gender difference in car insurance cost would be just as willing to accept a race or religion difference: just as long as those factors were statistically significant.
All in all, it looks likely that this debate will run and run.
Beyond car insurance
The EU ruling will affect more than car insurance, though.
In the case of pensions, for example, an annuity is determined in part by life expectancy. Since men have a slightly lower life expectancy, their payments are usually higher.
Exactly the same principle applies in the case of life insurance, of course.
And across the whole insurance industry there is some confusion over whether premiums will actually meet in the middle.
The huge costs of re-pricing could lead to insurers passing on the cost of updating their systems to all consumers, some have suggested, leading to a price rise across the board.