Tuesday, 1 March 2011


In my secular career, before ordination, I worked in the Insurance Industry and although most of my time was spent in Life Assurance and Pensions, specialising in commercial and domestic mortgages, I still have knowledge of Car and Home insurance. For a short period I ran my own Brokerage and I then managed a branch of a London Brokerage. At no time did anyone ever query the fact that in the field of motor insurance, women were a lesser risk than men, demonstrated by the fact that they are charged less in premiums than men. All Insurance Premiums are based on “risk” and that means, for example, that in Life Assurance policies men are a different “risk” to women. Women live longer than men so their Life assurance Premiums are less whilst the amount they receive on an Annuity is less as well, for the same reason. Car Insurance and Home Insurance rates are also based on where a person lives as this can affect the “risk” i.e. some areas are more prone to burglaries and this is taken into account. Will this ruling mean residents of London will no longer be expected to pay higher car insurance or home insurance premiums as this is also discrimination!

It seems that the whole basis of assessing “Risk” has to change because the European Court of Justice has ruled that using differences between men and women as a risk factor in setting premiums for car and medical insurance and pension schemes breaches EU rules on equality. "Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination," the court said in a statement. The Telegraph points out that “the verdict - which applies from December 21 2012 - will force changes in the current standard practice across Europe of basing insurance rates on statistics about differing life expectancies or road accident records of the sexes.”

The effect of this will be to increase the premiums paid by women for their car insurance and paying more for their Life Assurance as well as getting less on their pensions. As an example a pension annuity for a male aged 65 is £3,274 a year from a £50,000 pension fund whilst for a female it is £2,993. These figures are based on life expectancy and as generally women live longer than men the annuity company has to pay the pension longer for them. The effect of this ruling will be to reduce the amount payable to women. “Risk” is assessed by people called actuaries who are experts in their field but this ruling turns the whole basis of their calculations on their head.

When God made men and women he made them equal in His love but with a different purpose or role to fulfill. Modern society has blurred those roles but despite this there are still gender differences which should be acknowledged. By and large, women are safer drivers than men and this has resulted in women paying less for their car insurance. To ignore the differences is a nonsense which the Court of European Justice promulgates in this ruling. Christians should glory in the wonder of God’s creation; glory that he made men and women in His image, and glory in the gender differences which are part of His divine plan.

No comments:

Post a Comment