Insurers cannot charge different premiums to men and women because of their gender, the European Court of Justice (ECJ) has ruled.

The decision means that women can no longer be charged lower car insurance premiums than men, and the cost of buying a pensions annuity will change.

The court was ruling on a challenge by a Belgian consumer group Test-Achats.

It had argued that a current exemption for insurers contradicted the wider European principle of gender equality.

"Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination," the ECJ said.

The requirement for unisex insurance premium and benefits will start on 21 December 2012, giving national governments and the European insurance industry time to adjust.

Different risks
For car insurance, women are generally a lower risk to insure than men but will, in due course, have to pay the same premiums.

The British Insurance Brokers' Association (BIBA) said currently the cost of the average car claim by an 18-year old man was £4,400, while that for an 18-year old woman was £2,700.

"The ruling will have a significant effect on the insurance industry which has used the system of risk based pricing to award discounts to lower risk drivers like young females who are statistically safer drivers," said Graeme Trudgill of BIBA.

"The industry will have to change its model and effectively females will now pay a cross subsidy for males on their insurance premiums."

Simon Douglas of AA Insurance told BBC News that the decision could add about £400 to the annual cost of car insurance for a young woman.

"Particularly for women under 30 where the difference is most extreme, they currently pay about half what a man would pay," he said.

"We could see their prices go up 25-30% and men's premiums could fall by about 10%."

Pensions
The ECJ decision will also affect the cost of buying an annuity - an annual pension - as women live for longer than men and so receive a smaller annual pension for the same pot of money.

The insurance industry has warned that the change will lead to men receiving a smaller annuity income than they do now when their benefits are brought into line with those for women.

Tom McPhail, a pension specialist at the investment firm Hargreaves Lansdown, said the ECJ decision was a "seismic event which will fundamentally reshape the retirement landscape".

He predicted that annuity rates would equalise for men and women, at levels higher than female rates but "significantly worse" than current annuity rates for men.

"Rates will be volatile for the next few months as insurers monitor their new business and adjust their pricing in response to experience," Mr McPhail said.

Darren Philp, of the National Association of Pension Funds (NAPF), said he was disappointed with the ECJ decision, which would lead to a worsening of people's pension incomes.

"The data shows that there is a clear difference between them when it comes to longevity," he said.

"It is therefore perfectly reasonable for annuity providers to offer rates on the basis of this difference, as long as it is based on clear evidence."

http://www.bbc.co.uk/news/business-12606610

I have to say, I've always doubted the 'women are safer drivers and take less risks' statistics, just a gut feeling... And I'm not convinced this is the right ruling overall either

Do we think the companies will try to find a way round this, if that's possible? Can't say I'm happy about the likely outcome of the pension side of it

What's going to happen to poor old Sheila's Wheels? I love their adverts.

That's what I was thinking

Statistically, women aren't safer drivers than men. It's just their accidents tend be brought on by less risky behaviour and therefore cost less to fix. Men are more likely to write off a car, whereas women are more likely to be able to get repairs done. That's where the cost disparity has come from in the past.

Logic would suggest that they'd lower men's premiums slightly and raise women's to meet somewhere in the middle, wouldn't it? That would be the fair solution, yes?

However, this being Rip Off Britain™, the insurance companies will use this as a nice little money spinner - leaving men's premiums where they are and just raise women's to match! Bet the insurance companies can't believe their luck. A legitimate way to get more money out of us. Loverly Jubbly!!

Thanks a bunch, Brussels!

I cannot possibly say this without sounding sexist but hand on heart some of the more regular idiotic driving mistakes I see are made by women. Fortuantely they didnt lead to accidents but the myth that they're safer drivers in my eyes is just that - a myth.

My feeling is "stupid". It's insurance, based on risk. It's not discrimination, just do the maths.

Even more so for life expectancy and annuities, they will just reword "based on your personal life expectancy"

This seems pretty retarded. Insurance companies should be allowed to charge premiums based on the expected cost of an insuree, classified by age/sex/nationality/whatever-sensible-metric-you-can-think-of providing they have reasonable evidence to suggest that there is a difference in cost to them based on that distinction, which should should be fairly trivial.

Gender is not a suitable metric, IMO. There are good women drivers, there are good men drivers, there are bad drivers of both sexes etc.

You should judge risk on someone's personal circumstances, not by their gender. To me it's as ridiculous as suggesting people with black hair are more dangerous on Fridays.

Exactly, everyone knows it's Thursdays.

Having renewed my car insurance a couple of months ago, I came to the conclusion that they pull the numbers out of their backsides.

Of all my friends back home (uni friends tended not to drive) who drive, most of the girls have written off at least one car, whereas the boys haven't had any accidents to brag/moan about...

I do wonder if in my experience the lads take more care of the cars as they have forked out for them, whereas most of the gals have had theirs given to them by their parents...

I have a very visible scar over my left eye, an internally damaged nose and a scar on my chin caused by a woman driver who wasn’t looking where she was going and shunted me off a bike. Not tarring the whole gender with the same brush, this has left my view on such things a little skewed.

It's all borne out in the statistics. Apparently it's the younger male drivers and as you get older there's less difference between men and women's premiums. I suspect as well that it's the size of the claims more than the number too.

I'm sure there must be some kind of "human rites" type law that says they can't do this. I think it's an absolutely obscene ruling, discriminating against men by reducing the average aggregate payout over their retirement compared to that given to women. That's just sexist. It's theft. It's immoral. You'd have to be a total and utter twunt not to see it that way. Why do the people making these decisions seem to be screened to eliminate anyone with a functioning brain?!

I wonder what other factors it might become illegal to "discriminate" against. Perhaps diabetics or haemophiliacs shouldn't pay higher private health premiums, because that would be genetic prejudice which is only one step removed from eugenics?

I wonder how people think it compares to the "stop and search" statistics regarding black men. Statistically, a young black man walking down the street at night is several times more likely to commit a violent crime than a middle aged white woman. Would it be correct for police to stop and search a higher percentage of black men than white women..?