EU Gender Directive sees rise in insurance cost difference between men and women

Comparethemarket-gender-pricing-research

Men are paying on average over £170 more for their car insurance than women

Gap has widened nearly 8% since the implementation of the EU Gender Directive

Average motor insurance premium between June and August stood at £740

Men are still paying significantly more for their car insurance than women, despite EU rules banning the use of gender as a factor when pricing insurance policies. According to new research by comparethemarket.com, between June and August 2017 the average car insurance policy for a man was nearly 27% higher than that for a woman, at £821 compared to £649.

This is despite the implementation of the EU Gender Directive in December 2012, which banned insurers from using gender as a factor when pricing policies. In-fact, the statistics show that the gap between the cost of the average insurance policy for men and women has widened since December 2012.

In January 2013, the average policy for a male driver cost £591.70 compared to £493.88 for women – a difference of almost 20%, with the gap steadily widening over the past four years.

John Miles, Head of Motor at comparethemarket.com, said:

“This data shows how little difference the EU Gender Directive has had on insurance premiums, with providers still giving big discounts to women. This is likely due to a number of factors, such as statistically higher accident rates for men and more men than woman driving business and commercial vehicles – which are higher risk. The directive removed the ability of providers to give default discounts to women; however, the statistics and risk models used by insurers mean that the result is largely the same.”

While, on average, women are still paying less for their car insurance than men, the research from comparethemarket.com found that the gap between the cheapest premium and the average premium was wider for men than for women – suggesting that men stand to save more by shopping around for their policy.

Between June and August 2017, the difference between the cheapest and average policy for women was £101.21, while the difference between the cheapest and the average policy for men was £151.67.

Despite these disparities between the sexes, average premiums across the board are still at near record levels for both men and women. 

The average motor insurance premium in Q3 2017 stood at £740; a £42 year on year increase for the quarter and a £9 increase quarter-on-quarter. The cheapest premiums in the market also increased in the past year to £612 in Q3, up £33 from £579 in the same period last year and £8 growth from £604 in Q2.

This substantial price growth highlights the impact of recent Government changes to the cost of motor insurance, including significant increases in the Insurance Premium Tax and also the personal accident discount rate, while the £128 average saving highlights the benefits of shopping around rather than automatically renewing your policy.

John Miles added:

“The past three years have been relentless for British drivers, with the average insurance premium spiralling by over 38% to £740. The past year has been particularly hard, with changes to Insurance Premium Tax and the personal injury discount, or ‘Ogden’, rate draining the pockets of motorists at a time that wage growth remains stagnant. Although the Ogden rate looks like it might be changed, some damage has already been done for drivers.”