The end of gender-based insurance

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Despite decades of historical data around gender-based differences in mortality rates, European insurers are no longer able to reflect this in their pricing. According to Philip Kewin, Zurich Life and Investments general manager (retail), Australia often takes its lead from elsewhere, so how would a change like this affect your clients if it was implemented?

As insurers are no longer able to reflect the gender-based risk factor in their pricing, the response of most insurers has been to generally lift prices. “For example, Legal & General put risk rates for females up by an average of 23%, whereas rates for males came down by around 3%,” said Kewin.

“Twenty-three percent is a big rise in anyone’s language, and it certainly made me reflect on the importance of sustainable pricing policies and the critical interrelationships between prudent underwriting, claims management, client retention and efficient business practices that help control premiums and avoid the types of big increases that can give customers bill shock,” he said.

The law was implemented in stages in an attempt to combat discrimination based on gender in the access to, and supply of, goods and services. Individual EU member states were originally able to opt out in relation to different insurance premiums, but in 2008 the "Test-Achats" case in Belgium challenged the legislation. In September 2010 it was ruled that the "opt out" was against the EU principle of equal treatment. As a result, "opt out" was deemed invalid from 21 December 2012 - termed 'G Day'.

While Zurich isn’t aware of this being considered in terms of government legislation, Kewin says it is still possible that something like this could be implemented in Australia, as it was originally part of a “broader anti-discrimination legislation that was then applied to the insurance industry.”

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