Money Matters Team

FAQ on the EU Gender Directive

By Money Matters Team 30/01/2013

Insurers should no longer use gender as a risk factor

Find out more about the impact on insurance premiums...

Since the European Court of Justice (ECJ) gender ruling was first announced in March 2011 there has been a huge amount of discussion around how this might affect insurance premiums. The ruling resulted in the EU Gender Directive which came into force in the UK on the 21st December 2012.


In March 2011, the ECJ ruled that insurers should no longer use gender as a risk factor when calculating insurance premiums for men and women.

The ECJ stated: "Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination¹."

Is this a new ruling?

No. This is the result of an overruling of the existing Directive 2004/113/EC. This outlawed all discrimination based on gender in the supply of goods and services.

However, the 2004 directive had opt out clauses, known as derogations. These allowed the insurance industry to continue to take gender into account when calculating insurance premiums.

What has caused the ruling to be overturned?

The case began when a Belgian consumer group, Test-Achats, challenged the opt out clauses².  It argued that taking gender into account to determine car insurance costs contradicts existing EU legislation on anti-discrimination and gender equality.

What insurance products will be affected?

As well as car insurance, the ruling may also affect premiums for life insurance and critical illness cover

Who will the new legislation impact most?

According to Money Supermarket data, male car insurance premiums were 29.1% higher than female premiums, for the period between July and September, 2012.

The Association of British Insurers (ABI) carried out some research in 2010 and estimated that after the ruling female drivers aged under 25 could pay up to 25% extra on their premium, whereas male drivers of the same age could see their policies decrease by around 10%³.

The research also estimates that women could see higher life insurance premiums, as in the past women could have benefited from a higher average life expectancy.

It is not yet fully known what impact the new rules will have and each individual will be impacted differently. Therefore, now more than ever, it is imperative that consumers do their homework and shop around for the right policy for them, based on cover and price.

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