Car insurers are breathing a sigh of relief that they can still price on age even though the game’s up on setting premiums according to gender.
But that’s not necessarily the end of the matter as sneaky marketing departments look at ways to salvage their profits when EU rules on pricing annuities and insurance on gender take effect in December 2012.
One of the ploys car insurance providers are looking at is splitting their businesses in two – with one company offering insurance for men and the other for women.
Although that sounds like at least bending the rules if not outright breaking them, insurers think they have a get out.
Just do not specifically price to gender but ask questions that skirt around whether someone is male or female, like asking questions about pregnancy.
Next comes pricing by the way you sell ‘em, as Irish comedian Frank Carson might say.
Car insurers are going to follow the builder’s bidding trick – set prices so high for customers you don’t want so high they will never buy the product.
So, if an insurer specifically wanted to zero in on a certain female market sector, the product price would be ultra-competitive. For anyone else, the rates would be so punitive that they are well over the market rate and virtually unaffordable.
For an insurer, this keeps risks low and profits high.
Firms that already cater for specific customers, like Sheila’s Wheels, which prefers low-risk women drivers, can carry on as normal because men are not banned, just made to feel unwelcome by the pricing policy.
And what about age? Discrimination and equality laws govern selling goods and services to customers of different ages. At the moment, insurers can opt for over 50s or under 25s because the EU has no directive on age related selling – and none seems to be in the immediate offing.
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