ECJ says no to cheaper car insurance for women

A recent European Court of Justice ruling means that insurers will no longer be able to use gender as a basis for determining the cost of insurance premiums, with car insurance, life insurance and pension annuities all to be affected. The court judged that insurers can no longer take gender into account in underwriting premiums, despite evidence showing that it has an impact on both the frequency and size of claims.

Acting director general for the Association of British Insurers, Maggie Craig, is reported in the Guardian as saying: "This gender ban is disappointing news for UK consumers and something the UK insurance industry has fought against for the last decade. The judgment ignores the fact that taking a person's gender into account, where relevant to the risk, enables men and women alike to get a more accurate price for their insurance."

Until now, women have benefited from lower car insurance premiums to reflect the fact that they are less likely to have a serious accident. As a result of the ruling, premiums for women under 25 are set to rise by an average of 25%, while those for men are set to lower by 10%.

The British Insurance Brokers' Association told the Guardian: "Effectively, females will now pay a cross-subsidy for males on their insurance premiums."

However, MoneySavingExpert.com creator Martin Lewis told the publication: "With car insurance I think there is some logic to this ban - gender price differences are based on behaviour. Why should one man pay more because others behaved badly? Would we allow the same to happen based on racial differences?"