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Study shows significant impact from gender ban for insurance consumers


07 Dec 2011


Health & Consumers
European Court of Justice ruling would have negative effect on insurance pricing
Brussels, 7 December 2011: The CEA, the European insurance and reinsurance federation, has today unveiled a study, commissioned by the German insurance association, the GDV, quantifying the economic impact on European consumers of prohibiting insurers from using gender in the calculation of premiums and benefits.
A European Court of Justice ruling in March invalidates from 21 December 2012 the current provision in the EU Gender Directive that allows sex-specific differences in insurance premiums and benefits where gender is a determining risk factor.
“Today’s study shows that the ban on gender in insurance pricing may have a number of potential unintended negative consequences for consumers, insurance markets and society more generally,” said Michaela Koller, CEA director general.
The study, carried out by independent consultants Oxera, is based on an economic analysis of data from a sample of European countries. It shows that premiums could increase as a result of the redistribution of premiums from high-risk to low-risk groups. This is a direct consequence of the ruling of the European Court of Justice. On average:
• men could see a reduction in pension income from annuities of around 5% or more;
• women could see term life insurance premiums rise by around 30% or more;
• young women could see motor insurance premiums rise by 11% or more.
The study also found that such changes in premium are likely to affect consumer demand, leading to wider social implications, including disincentives for people to save for old age.
“The use of evidence-based statistics is indispensable in actuarial science, and the study proves that gender is one of the factors that has an obvious impact on the risks to be covered in such products as annuities, term-life and motor insurance,” said Koller. “The European insurance industry will, of course, abide by the ruling of the court but the implications of that ruling for consumers and insurers need to be understood.”
In light of the current discussions on the proposed EU Anti-Discrimination Directive on age and disability, the CEA wishes to ensure that insurers can continue to use age and disability as risk factors where appropriate. The CEA is therefore now commissioning a study into the likely impact on consumers of any restriction on the use of age and disability in insurance.
“A ban on the use of age or disability would undermine the insurance business model as it currently exists, to the detriment of consumers,” said Koller. “Such a ban would have a massive impact on the affordability and availability of insurance.”
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European Union Directive 2004/113/EC prohibits discrimination on the grounds of sex in the access to and supply of goods and services. A derogation in the Gender Directive allows EU member states to permit sex-specific differences in the calculation of insurance premiums and benefits where sex is a determining factor that can be substantiated by relevant and accurate actuarial and statistical data.
Belgian consumer association Test-Achats and two private individuals brought an action before the Belgian Constitutional Court for annulment of a Belgian provision transposing the Gender Directive. The Belgian Constitutional Court asked the European Court of Justice (ECJ) to rule on the validity of the derogating provision in the Directive allowing member states to permit the use of gender in the calculation of premiums and benefits.
On 1 March 2011 the ECJ declared the derogating provision in the Gender Directive invalid from 21 December 2012.
Notes for editors
1. For further information please contact Janina Clark, head of communications & PR (tel: +32 2 547 5812,
2. Copies of all CEA press releases are available on the CEA’s website (
3. The CEA is the European insurance and reinsurance federation. Through its 34 member bodies — the national insurance associations — the CEA represents all types of insurance and reinsurance undertakings, eg pan-European companies, monoliners, mutuals and SMEs. The CEA, which is based in Brussels, represents undertakings that account for around 95% of total European premium income. Insurance makes a major contribution to Europe’s economic growth and development. European insurers generate premium income of over €1 100bn, employ nearly one million people and invest almost €7 500bn in the economy.