According to figures from the Association of British Insurers, women’s premiums are likely to go up by about a quarter as a result of the ruling; the AA reckons it could add an average of £400 to the cost of car insurance for young women. Men, on the other hand, will see their premiums drop by about 10% - but they might lose out later in life. Because they’re not expected to live as long as women after retirement, their annuity payments are usually higher; but after December 21 2012, when the ruling comes into force, they’ll drop by an average of 8% (women’s premiums will increase by 6%). So whichever gender you are, it’s going to hurt.
Equality activists argue that it’s a necessary step: yes, young men as a whole might be more dangerous drivers – but why should all their less risky brethren be tarred with the same brush? Equally, insurance companies wouldn’t dream of calculating risk based on, say, race – so why should they be allowed to discriminate on gender?
However, insurers point out that it’s going to have a radical effect on the shape of the industry. Insurance has always been based on an clear-headed calculation of risk based on objective actuarial data. The more risky an activity is statistically, the more you pay. And companies pool risks, so that riskier customers are lumped in with less risky customers. If there's no variation, it just doesn't work. It happens all the time; those of us living in Hackney expect to have to pay more for their house insurance than people living in, for example, the suburbs of Cambridge. At a time when governments and businesses (particularly financial ones) are trying to improve their risk management processes, are we just making life even more complicated?
Now there's even talk that the legislation could be taken further, and used to rule out age-based pricing, too. Could this be the beginning of the end of the earlybird special, or price concessions for under-5s? Somehow, we’re not sure this is quite what the first equality activists had in mind when they started campaigning...