EU wants end to insurance gender bias

COMPANIES charging men more for car insurance and women more for pension policies will have to change the way they do their calculations in future.

Proposals from the European Commission say gender should not be an issue when calculating the premiums companies charge.

Instead they should look at the real differences such as experience and socioeconomic factors.

But the insurance industry is furious with the proposals and claim it will push up the cost of policies and pensions.

The Employment and Social Affairs Commissioner, Anna Diamantopoulou, accused the industry of taking the easy way out in calculating premiums. "Gender is used as a proxy because it's easy, divides the world into two nice big groups and allows them to differentiate without getting too sophisticated about calculating the risk," she said.

Hitting back at the industry that has lobbied intensely against the proposed change, she gave a list of the illogical ways insurance premiums are calculated.

For example, her native Greece uses tables from France to calculate life insurance for pension annuity while Portugal uses Swiss life expectancy tables considered out of date in Switzerland. "In some countries the tables used are decades old and do not make sense," she said.

Women pay more towards pensions because companies say men die sooner, but this was a myth, she said. A US Department of Health Study showed that 86% of men and women die at roughly the same age, she said.

Prices did not increase in countries that introduced unisex tariffs, such as Sweden for motor insurance and France and Portugal for health insurance, she said.

Paul MacDonnell, regulations planning manager with the Irish Insurance Federation, said removing gender from calculating risk would increase the cost to the consumer.

"Why should young women who are proven safer drivers pay more for their car insurance than young men that tend to have more accidents? You end up with young women subsidising the young men," he said.

The draft bill will be discussed by member state ministers under the Irish presidency next year.