Anyone involved in the car insurance industry, along with many others who read the bits in the middle of their newspapers, will be aware of the (we think) infamous EU Gender Directive that came into play last December. The policymakers in Brussels decided that insurers should no longer be allowed to use gender as an insurance rating factor. Quite simply, years and years of actuarial learning was cast aside, ignoring that, for most car insurance companies, younger women are better risks than younger men and can therefore buy their insurance at lower prices.
Our own Tiger Watch research – the car insurance pricing monitor that we produce each month – demonstrates the impact that the implementation of the new EU Gender Directive has had. Annual car insurance price inflation in January, February, March and April was recorded by Tiger Watch at -2%, +4%, +2% and 0% respectively.
However, this apparent relative stability masks market turmoil. For the 20 year old female driver profile that we analyse each month the annual inflation figures run like this: +21%, +45%, +46% and +33%! A straight average across that lot suggests that car insurance quotes for this young female driving cohort have increased by over 36% across the first four months of 2013. And our 25 year old female profile has fared little better, with annual inflation running at 17% over this period.
And of course it’s no consolation to these young women motorists that there are of course winners as well as losers in the car insurance market. Younger male drivers have seen policy prices drop, albeit by a lesser degree, whilst for many women over 30, policy prices have also been dropping.
The madness here is, of course, that the young female drivers being penalised by the Brussels bureaucrats are no greater risks to UK insurers than they were before last December. British insurers recognise this and are no doubt working hard to find a legal antidote to this EU madness by changing their ratings structures.
Whilst they do this, excessive car insurance
inflation remains a fact of life for many young women drivers. We would recommend that younger drivers take a look at the ever-increasing range of telematics insurance products on the UK market. These base insurance costs on actual driving behaviour and many of them have been specifically designed for the post-Gender Directive world. Tiger.co.uk features more of these products than any other car insurance comparison site so it’s a great place to start a search!