From December 2012, car insurance companies throughout the EU will be unable to use gender as a rateable question when selling car insurance policies.
This ruling will inevitably mean that young female drivers will see their premiums increase, as it’s unlikely that these companies will lower the premiums for young male drivers.
Having worked on a couple of car insurance sites, I feel I have a reasonably good understanding of how these sites and companies work. Which is why I am really disappointed in this ruling.
Statistics
I am sure that over the years, insurance companies have been heavily researching the risks and the claims they have received. All of this data must have been put through countless databases and through the hands of hundreds of statisticians. And they continue to review their claims on a daily basis.
So, after all these people have used all these tools at their disposal to crunch all of this data, it is STATISTICALLY more likely that a young male driver will make a claim than a young female driver would. And this is coming from someone who was once a young male driver and paid these premiums.
A level playing field
So, in their quest to create a level playing field, the EU have made things worse for 50% of those people taking out car insurance policies. Won’t this potentially lead to more fronting or more people just not insuring their cars?
If it is a statistical proof that some people are more of a risk, then these people should pay the higher premium.
It is the statistics that make the playing field level.
