This entertaining presentation by Chris Samuel on the European Union gender pricing, originally presented at the 2014 SOA Annual Meeting, provides background on the why gender neutral pricing was adopted, the industry response and raises questions about what might come next.

1. EU Gender-Neutral Pricing
A Marketing Response
Chris Samuel
www.tcplifesystems.com

2. A light hearted look at the EU
Some great pieces of EU legislation and pearls of wisdom
What’s wrong with these?
Who can’t blow these up?
What is this?
What can’t this be proven to do?
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3. A light hearted look at the EU
Some great pieces of EU legislation and pearls of wisdom
‘ugly’ Fruit & Veg banned
Water can’t be scientifically proven to reduce hydration
12 Eggs -‘a dozen’ is not a valid EU measurement
Children under 8 must be supervised by an adult while blowing up balloons
… and the best one -Gender based pricing for insurance is a breach of sex discrimination legislation 3

4. The EU Gender Directive in 100 words
•The2004 EU Gender Directive prohibits both direct and indirect sexual discrimination in the provision of goods and services in the European Union
•Insurers had enjoyed an exemption from this Act on the basis gender had a material and demonstrable rating impact -‘provided it is based on relevant and accurate actuarial and statistical data’
•Exemption challenged by Belgian Consumer Association, Test-Achats in 2011
•1 March 2011 European Court of Justice ruled in favour of Test-Achats that this exemption was in breach of the charter of Fundamental Rights and therefore void.
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5. What did insurers and member states do?
•Lobbied
•Failed to successfully argue their case
•Neglected to engage the consumer
•Just a thought…
After the best part of 10 years lobbying and still not getting heard –was it the message or Government desire to be heard?
“..for the best part of a decade Governments and insurers fought to retain the right to offer premiums and benefits priced as accurately as possible using gender”
Director General Otto Thoresen , Association of British Insurers , 2012
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6. Comments post decision
“one in four women could be priced off the road if rates rise by the predicted 25%”
UK Aggregator uSwitch
“The Gender Directive got it wrong: by supposedly trying to achieve gender equality it has created a bigger problem: risk inequality.”
Steph Savill Founder and MD of FOXY Lady Drivers Club
“Of course I’m in favour of gender equality. I am also in favour of age equality. However, when it comes to car insurance the most important thing is risk equality”
Steph Savill Founder and MD of FOXY Lady Drivers Club
"The ruling abandoned fairness in favour of equality”
Ian Crowder, AA insurance
“..this is illogical and calls into question the entire risk factor the insurance industry has been built upon.”
Ian Gosden, MD Higos Insurance Brokers
“The directive is desperately disappointing…It would seem that the law has prevailed over common sense and there are unlikely to be any winners.”
Ian Gosden, MD Higos Insurance Brokers 6

7. The forecasted impact
Insurance
Maleimpact
Female impact
Private Car
Life
Annuities
IncomeProtection
Private Medical
•Media reaction centred on car insurance
–Warnings that one in four women could be priced off the road as a result –with 24% forecasted price rises for women aged 17-24
–Two-thirds of males were optimistic saying it is “about time”
–Only 18% of women said they considered the new ruling acceptable
–Most women underestimated the potential extent of the price rise
Sources
uSwitch Confused.com / Towers Watson, LV=, PruProtect, Money Marketing
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8. Pre G-Day marketing
•Almost exclusively Car biased as this is still the predominant Direct- to-Consumer insurance product where gender was material
•Several female only insurers and insurance propositions
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www.youtube.com/watch?v=yrKaQRIXPNw

9. Sources
G‐Day Perceptions and Buyer Behaviour, Pacific Life Re 2013
Aviva Media Centre November 2013
GOCOMPARE December 2013
Post G-Day
•Research showed good awareness of the change
•Increase proportion of male annuity purchases Aug-Dec 2012
•Car insurance price impact offset by falling rates
•Protection was largely an inward looking industry response, with limited general consumer engagement
•Expected January 2013 spike in life insurance sales not materially different versus 2012
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10. Marketing approach
•Still a P&C (Car) dominated response
•Female only insurers/brokers still trading but no longer excluding males
•Increase in overtly female branding, marketing proposition and product features
•Insurers looking to target the traits that led to cheaper premiums and gender specific targeting
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11. It’s only a European issue…
… well apart from Massachusetts and Montana
… and healthcare
“With exception of Montana and SBLI in Massachusetts, we are aware of no other state that has enacted a unisex law applicable to life insurance. This reflects lawmakers’ understanding of the need for insurers to be able to assess risk fully and fairly. Gender is one of many factors that life insurers consider when assessing risk.”
“We can’t predict what other states may do in the future, but we would oppose any proposals that jeopardize life insurers’ ability to underwrite fairly and properly.”
Whit Cornman, The American Council of Life Insurers
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12. Lessons learned and where next
•The industry and Government lobbies, but without conviction
•The consumer’s voice was only heard post ECJ ruling
•Insurers were ‘up in arms’ but was it a fight the UK Government really wanted?
•But… relax at your peril…
•Age is the next topic on the equality evangelist’s agenda
•…Health disclosures?
•… they wouldn’t… would they…?
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13. Final thought
“This has always been a crazy law, let in by the back door through UK lethargy”
Steph Savill, MD FOXY Lady Drivers Club
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14. Thank-You…
Any questions?
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