OFF BEAT: Unisex premium rates for E.U. drivers 'inappropriate'Posted On: Mar. 16, 2012 12:00 AM CST
Charging female drivers the same premium rate as male drivers in Europe is an “outrage” and “inappropriate,” a London-based insurance company said Thursday.
Legal & General Group P.L.C. was the latest insurer to respond to a 2011 European Union court decision where insurers are to stop setting prices based on gender.
The decision could push up auto insurance costs for women, who pay less than men because they are statistically less likely to be involved in accidents, according to reports.
Industry experts say the rule, effective December 2012, could raise costs for women drivers, cut male pensions and prompt more legal challenges to insurance pricing practices, according to reports.
The court’s decision immediately drew criticism from the insurance industry, which said different pricing for men and women was legitimate given their different risk profiles, according to news reports.
The introduction of unisex rates was “an outrage,” John Pollock, executive director of risk at L&G, said in a report.
“It will make us entirely powerless to differentiate between risk for male and female customers. It’s completely inappropriate,” he said.
Analysts in a separate news report said the decision would have little long-term impact on insurers’ earnings, as they have enough flexibility over pricing to ensure any changes would cancel each other out.
But the gender ruling could pave the way for a potentially more damaging legal challenge to insurers' reliance on their customers' age in setting prices and payouts, they said.