EU High Court Bans Gender-based Insurance Pricing

The actual case brought involved some men challenging their auto insurance rates, but the ruling would apply to all areas of insurance, including life insurance and pensions. The effect of the ruling for auto and life insurance is to raise rates for women and lower them for men. The effect on pensions is the opposite.

The way I look at it there are two distinct but inter-related areas of interest, the moral and the practical. IOW, does our sense of justice require the change in policy, and separately, what is the outcome of the ruling likely to be.

  1. I can understand the rationale for the ruling, but I think there’s also some inequality that’s always part of life, and you can’t fight it all. So the question is where you draw the line, and why do you draw it there. In the case of insurance, no one is arguing that we need to avoid differentiating by age (although the HCR did limit the extent to which it can be used for health insurance). For the second link above, it appears that the EU ruling is based on a distinction between something that’s “biological” and something that’s not, but even assuming that gender-related pricing is not biology based, that seems like an artificial distinction to me.

But I can see where others might disagree.

  1. In terms of the impact, I would think it would manifest itself in insurance companies using things that are proxies for gender, directing their marketing at groups that have a high percentage of the preferred gender for the particular line of insurance, but also in consumers adjusting their purchases. In the case of auto insurance, assuming it’s mandatory in Europe like it is in the US, women may not have much discretion. But in the case of pensions, for example, I could see where a man would be advised to look for something more like a 401k rather than an insured annuity for which he will be significantly overcharged. And so on.

The reason the two issues are inter-related is because morality and practicality are always related, and the extent to which you push the boundaries in terms of requiring ever more rigid levels depends on how feasible it is and what the practical outcome is likely to be.