Your Money: We'll all suffer for sexual equality

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The Independent Online

Jokes about women drivers usually backfire when motor insurance is mentioned. Although women on the road have probably been pilloried since the first female slipped behind a steering wheel, they usually get cheaper car cover than men because statistically they are safer drivers and have fewer accidents.

Jokes about women drivers usually backfire when motor insurance is mentioned. Although women on the road have probably been pilloried since the first female slipped behind a steering wheel, they usually get cheaper car cover than men because statistically they are safer drivers and have fewer accidents.

The Association of British Insurers (ABI) tells us that men under the age of 30 make 10 per cent more claims on their car insurance than women of the same age. Women tend to make fewer, smaller claims.

But the European Commission's social affairs commissioner, Anna Diamantopoulou, is having none of it. She believes such a policy discriminates against men and needs changing.

As a result, women will face higher motor premiums: the ABI believes they could increase by as much as 10 to 20 per cent per annum.

But sorry, boys: if you're anticipating lower premiums as a result of the proposals, you'll be disappointed. There may be some small reduction, but it is far more likely that insurance companies will pocket the difference.

The Commission also has life cover in its sights. On average, women live three years longer than men, says the UK Government Actuary's Department, and if companies don't take account of this, premiums for term life insurance would rise for women by as much as 10 to 15 per cent. The ABI calculates this could cost women an extra £35 a year.

Annuity payouts are also affected by the proposals. Currently, women get lower payouts because statistically they live longer. But this is discrimination, according to the European Commission, and the only way round this is to offer the same annuity rates to men and women.

The result, according to independent financial adviser Hargreaves Lansdown, is that women may see a 4 per cent gain in their annuity payouts while men are likely to suffer a 7 per cent reduction.

The proposals are being discussed by the EU commissioners at the moment. Let's hope they see the error of their ways before it is too late, because this would be a step backwards.

One of the best things about today's insurance industry is its increasing sophistication, with prices set according to risk. That's why smokers get better annuities than non-smokers because they are more likely to die earlier.

Treating everyone equally in insurance just doesn't work and won't result in fairer pricing. Instead, women and men will be penalised by the very rules that are supposed to be helping them. And where is the advantage in that?

m.bien@independent.co.uk

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