The EU Gender Directive comes into force on Friday 21st December and will have a huge effect on the car insurance industry. On the changes Audrey Williams, head of discrimination law at global law firm Eversheds, comments:
“The change in the law means that insurers will no longer be able to use gender in their pricing. This is likely to lead insurers to look more closely at other risk factors, but care will need to be taken with the indirect discrimination risks this could create.
“Certain risk factors may impact upon one particular gender or even certain age and gender or ethnic groups and result in insurers facing legal challenges and storing up claims of discrimination. For example, one risk factor may well be the vehicle to be insured. As high performance vehicles are more likely to be driven by men this could be considered indirect discrimination and thus the approach would need to be justified – this is an easy example of what would be required but other risk factors may be less so.
“The much talked about use of telematics, which one might think provides personalised, individually assessed information, also needs to be considered carefully. This will track each individual’s driving pattern and style, and these assessments may take into account factors (such as the hours during which driving is undertaken) which could mean that more men are disadvantaged. For instance, which gender group is more likely to drive at night?
“Insurers must anticipate and address this potential legal risk to be in a position to defend their position. They must identify whether there is an adverse impact and think carefully about whether the risk factors can be shown to link to a genuine increased risk. The law would allow an insurer to objectively justify continuing to use factors if it can be shown that notwithstanding the discriminatory impact, the use of those factors remain legitimate and is an appropriate method by which to make these assessments.”
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