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Insurance Q&A: what you need to know about the Gender Directive

From tomorrow it will be illegal for insurers to charge men and women different rates for their car and life insurance. We explain what's going on.


by Michelle McGagh on Dec 20, 2012 at 09:00

Insurance Q&A: what you need to know about the Gender Directive

Over the years we've become used to the way gender affects the price of insurance. From tomorrow, however, the rules change and so will the cost of protecting your family and insuring your car.

From Friday, 21 December, UK insurers will have to abide by the European Union’s Gender Directive that will change the way they price their policies.

What is the Gender Directive?

The Gender Directive is a new set of rules from Europe that dictate insurers can no longer use gender as a criteria for determining the price of certain financial policies.

The ruling follows a European Court of Justice judgement in March 2011 which ruled that the use of gender as a ‘risk factor’ by insurers should not result in individual differences in premiums or benefits.

In layman’s terms, this means that insurers cannot offer better or worse rates to someone based on whether they are female or male.

How does it affect me?

If you’re either a man or a woman who buys car insurance, life insurance, private medical insurance, or income protection insurance then you will feel the impact, as will people coming up to retirement who plan to buy an annuity.

The changes will bring pricing in line for men and women buying these policies, but instead of making prices for insurance and annuities cheaper for one gender, prices are likely to increase across all products.

What about my pension?

If you plan to turn your pension savings into an income by buying an annuity – essentially an insurance policy against living too long – then you are likely to see prices increase.

Until now a man retiring would receive a larger income from his pension than a woman who has saved the same amount. There is a simple reason for this: statistically women live longer than men so the income will be paid out over more years.

Figures from the Office of National Statistics show a man aged 65 today will live to 83 on average and a 65-year-old woman to 85.

But before any retiring women start rubbing their hands together at the prospect of loads more pension income, the Gender Directive isn’t unlikely to actually put much more money in their pockets. It is expected that more insurers will reduce male annuity rates to bring them in line with female rates.

According to online broker Hargreaves Lansdown there has already been some changes to annuity rates over the past few weeks in anticipation of the new rule.

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8 comments so far. Why not have your say?

Ian Lewthwaite

Dec 20, 2012 at 14:56

HOW MUCH LONGER need we put up with the EU' directives. Having been in the insurance industry for over 40 yearsand been maaried even longer. Its only an idiot/government adviser/politician who cannot recognise the differences between male and female in their attitudes, dispositions, thinking and many other traits as well asphysically. They live longer than men, whether its the bloke trying to get away, I am still not sure- its just a fact of life. Their driving is more cautious than males of the same age- just check the accident statistics.

So how on earth can these fools legislate otherwise using a modicum of inteligence? - it ain't going to change nothing.

We can all see that insurance is now a numbers game, nothing in the motor car Insurance is underwritten. I had good lifelong friends that I would never Insure, as their claims ratio was horrendous.

Turnover is vanity, profit is sanity!

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Dec 20, 2012 at 16:20

I suppose the next directive will be that men can and will bear babies, and women will be as physically strong as men and will not be beset by period pains and will only live as long as men. Massive fines if that doesn't happen.


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Rose G

Dec 21, 2012 at 11:50

You last word sums up my attitude to EU directives & directors - Twats one & all!

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Ian Lewthwaite

Dec 21, 2012 at 15:27

If we were governed by politicianswith brains/ballsthey would tell Europe we joined a free trade market and that is all we need from you, as from tomorrow the EU is on its own ,no subsidy from the UK.

We would like to continue trading with you, but keep the idiotic legislation where it belongs in the EU, on agreed terms, not EU imposed terms.

If cameron and co cannot see that the city have dropped the ball with their dishonesty and conniving and by protecting his mates, who unfortunately must be third generation money, and as they used to say many years ago - its only three generations from clogs to clogs.

Wearing a suit ant tie doesnt make you a gentleman and squire, as they are behaving more like knaves-me , me me and to hell with all others

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Dec 24, 2012 at 08:03

Snoekie and Rose G

I think you will find that 'Twats' is gender specific and may not be a legitimate term of abuse. Would 'Plebs' be more appropriate?

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Ian Lewthwaite

Dec 24, 2012 at 09:27

I could use words which even more specifically reflect my thought about these people, but I didn't want to be accused of abuse- well not just today anyway!

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dakky via mobile

Dec 24, 2012 at 16:57

Rubbish from the EU followed by rubbish comments from the lower end of Citywire's readers!

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Ian Lewthwaite

Dec 24, 2012 at 17:45

hi dakky

get a life, you are one of those who bows down to idiot legislators - instead of saying ENOUGH RUBBISH FROM YOU _NOW GET A worthwhile JOB

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