The AA has reacted with concern to the announcement (30 September 2010) by Juliane Kokott, EU Advocate General, that taking the sex of a person into consideration for insurance purposes was against their fundamental rights.
Juliane Kokott is an adviser to the European Court of Justice and her announcement could lead to a change in the present directive. This already bans taking sex into account when calculating premiums, but provides an exception if differences in risk assessment are backed up by solid statistics.
Simon Douglas, director of AA Insurance, says: "Of course we support banning discrimination where appropriate but there are sound, statistical reasons for differential insurance pricing, especially for younger drivers.
"If this becomes enshrined in UK law then younger women, who suffer substantially fewer serious collisions than men of the same age, would subsidise the premiums of male drivers who make claims that are on average twice as costly as women.
"This will mean higher premiums for everyone. It will also mean competition will be restricted and we would see many insurance companies simply not offering cover to younger drivers in order to avoid insuring younger men at loss-making premiums.
"Whilst everyone must buy car insurance if they own a car, insurers aren’t obliged to offer it."
Douglas adds: "A ‘one-size-fits-all’ approach would be a very blunt instrument that would disadvantage those many women drivers who pay lower premiums than men and, in fact, would lead to premium increases across the board. It would be a real irony if European legislation designed to help women worked against their best interest in motor insurance."
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