Gender price ban to raise women’s insurance costs

New European rules have come into force banning insurers from charging different rates based on gender. 

It is generally accepted that women have lower car insurance premiums because statistically they have less accidents than men.

In March 2011 a European Court of Justice ruled that it was sexual discrimination to charge people different premiums on the basis of gender alone.

The insurance industry was given time to prepare for the change, but the changes have now come into effect and women will see their premiums go up by up to 40%, while men could see their premiums coming down by an estimated 10%.

Could the same thing happen to the South African insurance industry?

Insurance companies here do use gender as a factor in their pricing and while the EU ruling is not binding on South Africa, foreign judgements carry authority and influence the decisions of our courts and it is quite likely that the setting of insurance prices based on gender will be challenged in South African law courts at some point.

This could spell the end of cheaper insurance for women, and present serious challenges to insurance providers who have positioned their brand to target this market segment.

Insurance brands targeting women in South Africa have run long-term advertising campaigns which have helped to create awareness in South Africa that women qualify for cheaper insurance rates. If South Africa follows the EU move insurance providers targeting women drivers would find themselves scrambling to adjust their model to make their brands viable.

The reality is that whatever rates exist for women, they exist at the underwriter level and are therefore available through any insurance channel. So, whether or not insurance brands targeting women can survive the removal of their already not-so-unique primary differentiator remains to be seen.

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Directions to Cape Town Office :

If you are coming from Cape Town CBD on the N1, take the Willie Van Schoor/Durban Road turn-off and then turn left at the intersection. When you get to Bill Bezuidenhout Avenue turn left, then carry on straight until you get to Carl Cronje Drive.

Turn right at the intersection and then immediately left into the Avanti Tower Office Block.

If you are coming from Paarl on the N1, take the Willie Van Schoor/Durban Road turn-off and then turn right at the intersection. When you get to Bill Bezuidenhout Avenue turn left, then carry on straight until you get to Carl Cronje Drive.

Turn right at the intersection and then immediately left into the Avanti Tower Office Block.

Directions to Durban Office:

If you are coming from Durban go up fields hill, past the Kloof Village Rd turn-off and then take the Abrey Road turn-off (exit 24) as if you are going to the Kloof Golf Course. When you get to the top of the glide-off turn left, left again into Lyngarth and when you get to the T-Junction at Abrey Road you will see our building on your left hand side.

Coming from Pmb / Hillcrest take the Abrey Road turn-off (exit 24), turn right over the M13 and turn left in Lyngarth. At the T-Junction at Abrey Road you will see our building on your left hand side.