The Association of British Insurers has voiced its support for the implementation of the EU's new directive on gender discrimination in the insurance and finance industry.
The new regulation will forbid financial institutions from using gender as a factor when creating risk-based premiums for financial services. However, this can be bypassed if financial institutions can prove that their actuarial assumptions are based on appropriate and accurate data, the Financial Times reported.
In response to the new directive, Stephen Haddrill, director general of the Association of British Insurers (ABI) said: The government recognizes that it is fair for insurance companies to use data on age and gender in setting premiums for some products. This is because different groups of people represent different levels of risk in some types of insurance. We agree that specific legislation on insurance in the proposed Single Equality Bill is unnecessary and would be expensive for customers.
We support the government’s efforts to ensure that, when the EU gender directive becomes law in the UK later this year, it is applied in a way that minimizes bureaucracy for insurers and costs for our customers, he added.
However, the Financial Times also reported the industry as saying that the new regulation may damage competitiveness and reduce premium diversity, as it would allow insurers to use their own claims experience to create premiums. As a result, they would all treat risks in different ways.