The European Court of Justice has ruled that, by December 2012, insurers in the United Kingdom will no longer be able to consider gender as a factor when determining premiums for various financial services. Ever wondered how men and women compare in other areas? We take a look.
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The European Court of Justice has ruled that, by December 2012, insurers in the United Kingdom will no longer be able to consider gender as a factor when determining premiums for various financial services. But how do men and women compare currently when it comes to premiums or other entities? Here’s a look.
The directive will result in premium changes for both men and women for several financial services, such as:
Insurers and financial entities currently factor in gender when determining premiums and rates. Here are a few examples of what it looks like in practice.
>> Women typically pay less for motor insurance because they’re less likely to have accidents.
>> Women typically pay less for life insurance because they have a longer life expectancy.
>> Women typically receive less money in pension income, since they spend more years in retirement.
Of course, gender inequalities persist beyond just risk assessment. See how women and men compare in a few other areas in the UK.
Women make up 12.5% of directors of FTSE 100 companies.
Men make up 81.5% of directors of FTSE 100 companies.
Access to Pensions
65% of full-time female workers have access to pension schemes.
75 % of full-time male workers have access to pension schemes.
Men are more likely than women to be employed in skilled trades (19% versus 2%).
Women are more likely than men to be employed in administrative or secretarial positions (20% versus 4%).
http://www.wrc.org.uk/includes/documents/cm_docs/2010/s/1_statistics_about_women_in_the_uk_2009_25_5_10_latest_nn_sr1.pdf (note 117)
Gender Pay Gap
10.5% = Pay gap between men’s and women’s full-time median earnings.
20.2% = Pay gap between all men’s and women’s work.
According to the Office for National Statistics, which collects data on men and women’s earnings, several factors can explain the pay gap.
Research by Oxera, commissioned by the Association of British Insurers, outlined some potential scenarios for removing gender from financial entities’ risk assessment.
Women younger than 25 could expect to see premiums rise by 25%, on average.
Women could expect an up to 20% premiums rise, while men’s premiums could fall by 10%.
For those nearing retirement, women’s annuity rates could rise by 6%, and men’s rates could fall by 8%.
SOURCES: ASSOCIATION OF BRITISH INSURERS, HOME OFFICE, OFFICE FOR NATIONAL STATISTICS, WALL STREET JOURNAL
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