As the government consults on the introduction of
rules banning the use of gender as a factor when setting insurance premiums,
Deloitte, the business advisory firm, comments on how the ruling will affect
insurers and customers.
James Rakow at Deloitte says, “The European Court
of Justice in March ruled that insurers could not use gender as a risk factor
to price insurance premiums with effect from 21 December 2012. These changes
will potentially have a huge effect on premiums for a wide range of policies.
Insurers will have to change their pricing models. This is both an opportunity and a threat –
those who already use state of the art technology and innovative sources of
risk data may take this in their stride. Those who are disadvantaged by legacy
systems and poor quality data may be left behind.”