Maltese insurance companies believe a landmark judgment by the European Court of Justice outlawing the practice of gender discrimination to gauge risk will lead to an increase in premiums for female clients.
A director of a leading Maltese insurance company said that, although it was too early to discuss its real impact, the judgment might not be “a win for the pockets of Maltese women”.
He said: “So far, it was common practice to use gender in our risk assessment. For example, female drivers pay less than men on their car insurance because the risk is considered to be lower.
“It is a fact women have fewer car accidents and this contributes to lower risk and lower premiums. This may not be the case any longer after the ECJ judgment,” he added.
Following a challenge by Belgian consumer group Test-Achats, the ECJ yesterday ruled that insurance companies in the EU could not charge different rates for men and women.
“Taking gender into account as a risk factor when calculating premium prices is discriminatory and forbidden under EU law,” the Luxembourg-based court concluded.
The ECJ decided that “the rule of unisex premiums and benefits will apply with effect from December 2012”.
An EU directive banning all discrimination based on gender when accessing goods and services obliged member states to prohibit insurance premiums based on gender from December 2007. However, EU member states, including Malta, were allowed exemptions from the rule for a transitional period.
According to yesterday’s ruling, there is a risk EU law may permit the derogation from the equal treatment of men and women, provided for by the directive, to persist indefinitely and this has to stop.
Though women may soon have to fork out more money for insurance, including on their life, cars, possessions and profession, European Justice Commissioner Vivian Reding called the judgment “an important moment for gender equality in the EU”.
“In the light of today’s judgment, I call on insurers across the EU to follow this good example regarding all insurance contracts. It is clear an insurance company must not distinguish between women and men; all customers must be treated equally. This is a matter of respect for fundamental rights. It is now also becoming a matter of good business practices,” she said.
On the other hand, the CEA, the European insurance and reinsurance federation, which represents insurance groups from the 27 member states, said it was disappointed by the ruling. “The decision by the judges not to recognise that gender is a legitimate factor in insurance pricing and that insurance pricing is based on a fair risk assessment process is bad news for insurance customers,” a spokesman said.