The European Court of Justice (ECJ) has done its job admirably well by ruling that taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination.
The conclusion drawn from this ruling is that that young women drivers and male drivers reaching retirement age will pay more for car insurance may sadly turn out to be true.
However is does not have to be like that. The fact of the matter is that the insurance industry chooses to lump people into categories to assess risk. Hence, since taken as a group young male drivers are relatively high risk, their premiums are higher while middle-aged women pay less. Assessing risk by category is really utter nonsense. We are all individuals and should be viewed as such when it comes to insurance premiums. While some young men are safe on the road, some middle-aged women are not. Indeed my tutor at university, an archetypal 50-odd female academic, had a rather bizarre penchant for sports cars driving a succession of Lotuses, most of which were written off because she was a very unsafe driver, who still somehow managed to survive to drive another day.
The only reasonable way to work out insurance is to do it on an individual basis. There is, in addition, no requirement for insurance premiums to last 12 months. Scooter insurance has led the way here with policies lasting three months which are substantially cheaper for a new driver with a new scooter rather than a second hand one. Shorter timescales would solve the thorny problem of how to assess first time drivers. A sum could be demanded, based initially on the current category assessment, and then amended when the individual’s driving safety (or lack of it) could be worked out for that person based on their driving history. Risk assessment on an individual basis is, I am sure, a viable proposition in this age of computers.
Yes, it would mean the insurance companies changing the way they do business, but I am certain this could be achieved. In the Guardian today Maggie Craig, Acting Director of the Association of British Insurers is on the record as saying: “Insurers will now study this judgment carefully to manage negative effects for customers. Insurers will work hard to ensure that the UK insurance market remains one of the most competitive in the world offering a strong choice of products and prices for customers.”
I hope they will amend their practices to insure us as individuals with premiums based on our own behaviour not that of the group we are deemed to belong to. Yes it will cost money. However, money is the one thing insurance companies have in abundance.