Women Drivers Feel The EU Pinch
There’s something happening on December 21st this year that could bring a very unhappy Christmas to the UK’s women drivers. This not very festive event is the implementation of the EU Gender Directive. What does it mean? Well, the EU’s legislators have decided that from this date insurers won’t be able to “discriminate” in their pricing of policies based on gender. That’s not just for motor insurance but for all kinds of insurance, including life insurance too.
The likely upshot of this from a car insurance point of view is that premiums for female drivers are likely to increase and should reach parity with male pricing – we’ve noticed this trend over the last few months on our Tiger Watch price monitor.
Women drivers tend to pay less for their insurance than their male counterparts because although they may have a similar number of accidents, the damage caused by those accidents tends to cost insurers less. Bearing in mind that this pricing differential is based on years of actuarial analysis of millions of drivers, the EU Gender Directive seems to us to go against both common sense and sensible business practice.
For male motorists there may be an upside to this in that car policy prices may reduce slightly, although there’s certainly no guarantee that this will be the case.
One possible longer-term beneficiary of this change could be the fast-growing telematics car insurance providers. These companies – like insurethebox, i-kube and Coverbox – fit a small box to a car and use the driving information from this as the basis for pricing insurance policies. What this means is that pricing can eventually be based on a driver’s real driving performance rather than an estimate based on the general driving habits of groups of motorists. And this in turn will negate the need to use gender (and other criteria such as age or occupation) as the basis for pricing car insurance policies. Safer drivers should end up paying less for their insurance policies.
Clearly other factors will still play a part in the setting of prices – car value, power, conviction and accident history, annual mileage, postcode and overnight parking location to name a few. But it will be the information generated by a car’s telematics device that is used by insurers to gauge a motorist’s driving ability rather than a set of actuarial tables.
Now for the ad! Regardless of gender, if you are finding that your renewal quote is higher than expected, get yourself to Tiger.co.uk and access quotes from over 90 brands.