3rd March 2011

Gender as a risk factor in assessing premiums

In a recent judgment by the European Court of Justice (ECJ), it was found that it is not legal for insurers to treat men and women differently for the purposes of calculating insurance premiums. This will have obvious implications for both the motor and life insurance industries. There has been a significant amount of press coverage given to this matter and are still questions as to how this will unfold within the UK.

The present position

Currently, insurers are permitted to use gender as a factor in assessing the risk level involved in insuring someone, which feeds directly into the level of premium which that person must therefore pay. This is legal so long as there are relevant statistics behind the decision. For instance, in motor insurance, the Association of British Insurers (ABI) state that young male drivers are statistically more likely to be involved in a car accident than young women: they present a greater insurance risk and so must pay a higher premium for their car insurance.

Future changes

Following the ECJ ruling, insurers in the UK will not be able to use gender as a risk-assessment factor after 21 December 2012. It remains to be seen how this will develop in practice within the UK, however the ABI states that it is more likely that we will see women’s insurance premiums rise rather than men’s premiums fall.

Implications for other industries

This ECJ ruling only affects insurance services. However it is noteworthy that pension providers also operate similar practices regarding gender: currently it is more expensive for women to purchase annuities due to their longer life expectancy. Additionally a person’s gender also affects how scheme benefits are calculated: in the factors used for calculating commuted lump sum payments, transfer credits and transfer payments.

These practices are open to the same criticism which the ECJ made of the insurance industry. On that basis, future changes to the costing of pension services are entirely possible. As such, it would be wise for both insurers and pension providers to closely monitor developments in this area over the months to come.

Stewart Dunbar
Trainee Solicitor

The opinions expressed in this site are of the author(s) only and do not necessarily represent the opinions of Blackadders LLP.

Blackadders takes all reasonable steps to ensure that the content of this site is accurate and up to date. The site is not, however, intended as a substitute for seeking legal or other professional advice but rather as an informative guide to the services provided by Blackadders and topical legal developments. Site visitors should always seek advice tailored to their specific situation. Consequently, Blackadders accepts no responsibility for any loss or damage suffered by anyone acting or failing to act on the basis of information contained on this site. Downloading of material contained on this site is at the user’s own risk and all necessary virus checks must first be carried out by the user. Blackadders is not responsible for the material found on any web sites linked to this one and links to this site may only be made with Blackadders prior consent.


Blackadders owns the copyright in this blog and all material contained on it. The material on this site may be downloaded for personal use only and must not be altered. Otherwise, Blackadders’ written consent is required before any material on this site is reproduced, copied or transmitted in any way.

Privacy Statement

Information passed to us via this site is kept confidential and will not be disclosed to third parties except if authorised by you or required by law.

© Blackadders LLP 2022

Members of the Law Society of Scotland.

Blackadders Solicitors is a trading name of Blackadders LLP, a limited liability partnership, registered in Scotland No SO301600 whose registered office is 30 & 34 Reform Street, Dundee, DD1 1RJ. Reference to a ‘partner’ is to a member of Blackadders LLP.

Back to Business Legal News from Blackadders Solicitors