Before the end of the month the European court is likely to rule that that offering different insurance premiums to men and women is unlawful discrimination and that gender should not be considered when deciding risk for insurance.
Women drivers are likely to suffer the most from the ruling, as many insurers offer cheap car insurance cover to women on the grounds that they are less likely to make claims – and young women drivers are not as risky to cover as young men.
But the ruling will have a more widespread effect, specifically on life assurance and critical illness insurance. Two factors are often included in calculating the life assurance cost for women, they tend to live longer than men and women often suffer serious illnesses in later life that are not issues for men. Actuaries will no longer be able to discriminate between the two when calculating premiums.
In other insurance related news Europ Assistance is trying to provoke a fight with the Financial Ombudsman over the ‘ashes-to-cashes’ court case. The insurer is refusing to pay out claims from holidaymakers grounded by the Icelandic ash cloud on the grounds the problem was a natural disaster and not weather related.
The key point is insurers do not pay for natural disasters but do have to settle claims that are weather-related. So far, the ombudsman and small claims courts have upheld 500 cases claiming compensation on the grounds the incident was weather related.
Europ Assistance wants the ombudsman to take them to court for a binding decision on whether they should pay. If the court decides insurers have to pay out for natural disasters, the ruling will literally open the flood gates for more home insurance claims