SlideShare a Scribd company logo
1 of 41
Download to read offline
The ECJ Gender Directive
One year on
Tuesday 1st April 2014
Staple Inn, London
lionel.texier@riskandanalysis.com
Roshni.Bhudia.1@cass.city.ac.uk
LionelTexier – Managing Director R&A
Roshni Bhudia –Trainee R&A
Magalie Jousset –Trainee R&A
EU Gender Directive
Test-Achats Case
EU Guidelines
Impact assessment of the ban on gender-based pricing
Expected impact of Unisex Pricing
Unisex pricing in the UK
A brief overview of other EU countries : Fr., Bel. & Lux.
One year on, our prospective
Conclusion
Fact trigger
• 53% of people did not know the gender ruling was
happening
• Just under 45% believed that they had been
unfairly discriminated against
• 18% of women considered this ruling acceptable
• 45% of men were unclear about the impact of the
gender directive
• 16% of men thought their premiums would
increase
http://www.confused.com/car-insurance/articles/eu-gender-ruling-your-need-to-know-guide-to-insurance-price-rises
http://www.postonline.co.uk/post/analysis/2287745/gender-directive-new-tricks
EU Gender Directive
Test-Achats Case
EU Guidelines
Impact assessment of the ban on gender-based pricing
Expected impact of Unisex Pricing
Unisex pricing in the UK
A brief overview of other EU countries : Fr., Bel. & Lux.
One year on, our prospective
Conclusion
EU Gender Directive
• Premiums must be based on "relevant and accurate
actuarial and statistical data" (section 13(3ai) e)
• Insurance companies are prohibited to support
sexual discrimination in their policies since 21st
December 2012
• Before this date, insurance companies were given
a short period of time to prepare and adjust to this
ruling
EU Gender Directive
2004: EU directive
2004/113/CE with an
opt-out for unisex
pricing in insurance
article 5 § 2
2007: EU directive
2004/113/CE year of
application. (
12/21/2007 )
2008 : Test-Achats request
to the Belgium « Cour
Constitutionnelle » to stop
the opt-out for unisex
pricing in insurance
The Cour Constitutionnelle
Belge refers to the ECJ to
answer to the test-achats
request
2011: C236/09 Test-Achats
published by the ECJ
EU directive 2004/113/CE is
updated, starting from the
12/21/2012 the article 5 §
2 will be invalid for all EU
countries
12/21/2012 : the
unisex pricing is
compulsory for
any new insurance
policy or some
renewals
Time
2011: December, EC
publish guidelines on
the application of the
Gender Directive in
line with the C236/09
test-Achats Case
2014 : EC report on
the implementation
of the Test-Achats
ruling in national law
and in insurance
practice
EU Gender Directive
Test-Achats Case
EU Guidelines
Impact assessment of the ban on gender-based pricing
Expected impact of Unisex Pricing
Unisex pricing in the UK
A brief overview of other EU countries : Fr., Bel. & Lux.
One year on, our prospective
Conclusion
Test-AchatsCase
Figure 2 : The Test-Achats case, from Belgium to the EU -
Credits © European Union 2013
Belgian consumer organization that challenged the Gender Directive
2004/113/EC article 5(2) of the European Union.The European Court of
Justice (ECJ) passed down its ruling on a case regarding a provision of the
Directive.There has been no appeal against this ruling.
EU Gender Directive
Test-Achats Case
EU Guidelines
Impact assessment of the ban on gender-based pricing
Expected impact of Unisex Pricing
Unisex pricing in the UK
A brief overview of other EU countries : Fr., Bel. & Lux.
One year on, our prospective
Conclusion
EU Guidelines
• The contracts concerned are:
• Contracts concluded after 21 December 2012.Therefore, offers made
before 21st December 2012 but accepted as from that date will need to
comply with the unisex rule
• Agreement to extend contracts concluded before that date which would
otherwise have expired
• It is still possible to collect, store and use gender data for:
• Reserving and internal pricing
• Reinsurance pricing
• Marketing and advertising
• Possible to offer gender-specific insurance products (or options within
contracts) to cover conditions, which exclusively or primarily concerns
males or females (prostate cancer, uterus cancer, breast cancer…)
• Using risk factors
EU Guidelines
Scope of the Directive:
The Directive only covers insurance and pension which are private,
voluntary and separate from the employment relationship (it excludes
group health and accident contracts and occupational pensions covered
by Directive 200/54/EC).
Monitoring of the guidelines:
The commission will:
• Make sure that all the EU member states comply to the Directive and
the guidelines that started from the 21st December 2012 by adapting
their legislation
• Remain vigilant to detect any unjustified rise in prices or anti-
competitive conduct
• Report on the implementation of theTest-Achats ruling in 2014
The situation by country before the 21st of
December 2012 (source: EUTest-Achats guidelines)
Country UK France Belgium Lux. Nether. Cyprus Bulgaria Slovenia
Life Insurance YES YES YES YES YES YES YES YES
Private health insurance YES YES NO YES NO NO YES YES
Mortgage loans N/A N/A NO N/A NO NO N/A N/A
Motor Insurance YES YES NO YES NO NO NO NO
Travel Insurance YES YES NO YES NO NO N/A N/A
Disability/Income insurance YES YES NO YES NO NO N/A YES
Consumer credit N/A N/A NO N/A NO NO N/A N/A
Annuity products YES YES YES YES NO YES N/A YES
Accident insurance YES YES NO YES NO YES NO YES
Credit cards N/A N/A NO N/A NO NO N/A N/A
Deposit accounts N/A N/A NO N/A NO NO N/A N/A
Loan insurance YES YES NO YES NO N/A N/A N/A
Home insurance YES YES NO YES NO NO N/A N/A
Private liability insurance YES YES NO YES NO NO N/A N/A
Long term care insurance YES YES NO YES NO NO N/A YES
Critical illness insurance YES YES NO YES NO NO YES YES
The situation by country after the 21st of
December 2012
Country UK France Belgium Lux. Nether. Cyprus Bulgaria Slovenia
Life Insurance NO NO NO NO NO NO NO NO
Private health insurance NO NO NO NO NO NO NO NO
Mortgage loans NO NO NO NO NO NO NO NO
Motor Insurance NO NO NO NO NO NO NO NO
Travel Insurance NO NO NO NO NO NO NO NO
Disability/Income insurance NO NO NO NO NO NO NO NO
Consumer credit NO NO NO NO NO NO NO NO
Annuity products NO NO NO NO NO NO NO NO
Accident insurance NO NO NO NO NO NO NO NO
Credit cards NO NO NO NO NO NO NO NO
Deposit accounts NO NO NO NO NO NO NO NO
Loan insurance NO NO NO NO NO NO NO NO
Home insurance NO NO NO NO NO NO NO NO
Private liability insurance NO NO NO NO NO NO NO NO
Long term care insurance NO NO NO NO NO NO NO NO
Critical illness insurance NO NO NO NO NO NO NO NO
EU Gender Directive
Test-Achats Case
EU Guidelines
Impact assessment of the ban on gender-based pricing
Expected impact of Unisex Pricing
Unisex pricing in the UK
A brief overview of other EU countries : Fr., Bel. & Lux.
One year on, our prospective
Conclusion
Expected impact from Unisex Pricing
• Risk based pricing
• Gender is used for accuracy of pricing premiums that cover these
risks.
• Setting low premiums for a risky consumer, insurers employ a
higher risk consumer group of which the policy can be
underpriced
• Since one group of consumers benefit from the ban, then it will
always make the other group worse off
• The lower risk gender may opt out and the higher risk gender
may opt in which in turn, will create more riskiness in the market
Expected impact from Unisex Pricing
Life insurance
• Life insurance premiums for new policies were expected to leap
by up to a third towards the end of 2012
• Premiums have fallen over the past decade, and expected to rise
after the Directive
• Premiums for women were likely to rise significantly
• According to Confused.com, they expected that women could
end up paying around 20 per cent more for life insurance as a
result
• A study from Oxera predicted “on average women (aged 40)
could see life insurance premiums rise by around 30% or more”
http://www.confused.com/life-insurance/articles/gender-equality-ruling-cost-of-life-insurance-for-women-to-rise
http://www.oxera.com/Oxera/media/Oxera/downloads/Agenda/Gender-in-insurance-market.pdf?ext=.pdf
Expected impact from Unisex Pricing
Annuities and pensions
• An annuity converts a pension pot into income, which is
received annually. Not include occupational pension schemes
• If you are a male considering purchasing an annuity with your
pension pot, you are likely to get a more attractive pension
than a woman of your age
• ‘Which?’ -Their general consensus was that women’s annuity
income will rise by 2.5% and that men’s will fall by 2.5%
• ‘ABI’ -They predicted an 8% decrease for men and a 6%
increase for women
Costs
• Eliminating gender is very costly and these costs
are transferred to clients through higher
premiums, even if the concurrence may moderate
this impact for clients
• Invest their time and money into re-pricing,
altering and printing of updated documents and
training their staff as a result of the ban
• Insures will also have to boost the amount of
capital reserves to protect them against any future
financial crises, further pushing premiums
Economic uncertainty
• European crisis i.e. in Greece and Italy
• People have less disposable income so they have
had to sacrifice luxuries
• Competition
EU Gender Directive
Test-Achats Case
EU Guidelines
Impact assessment of the ban on gender-based pricing
Expected impact of Unisex Pricing
Unisex pricing in the UK
A brief overview of other EU countries : Fr., Bel. & Lux.
One year on, our prospective
Conclusion
Statistics
• only women aged 17-20 have seen a rise in their
premiums, and that was only £9 (£1,706 in
November 2013 compared with £1,697 in
November 2012)
• Men of the same age have seen a drop in prices,
with the average premium now coming in at
£2,358, as compared with £3,293 (a reduction of
£936)
• Women overall have seen a fall in premiums of £59
http://www.gocompare.com/covered/2013/12/the-eu-gender-directive-one-year-on/
Impact assessment
Premium changes following the Gender Directive: http://www.postonline.co.uk/post/analysis/2321740/gender-directive-one-year-on
The impact of the ban on gender-based pricing
• Motor insurance
AA insurance premium index announced at the end
of January 2013:
“There was a 42% increase in the average best
premium for 17-18 year-old female drivers since 1st
December 2012, while premiums for 17-18 year-old
males decreased by 17% in the same period”
Impact assessment
• Life insurance
• ‘Zurich’ - Coupled with changes
to life office taxation, it has
meant an increase in prices of
some 15-20 per cent for 2013
• It is harder to switch existing
cover on price because rates
have recently risen
Annuities and pensions
• Annuity rates have said to
decline for males, but female
annuity rates are said to have
improved
• In the second half 2012 an
increasing number of men
bought an annuity before the
Gender Directive came into force
• Increase in the number of men
bringing their retirement
forward to benefit from pre-
Gender Directive annuity rates
http://www.ftadviser.com/2013/02/07/insurance/life-assurance/how-the-new-eu-gender-directive-has-affected-life-insurance-
SONEHl1gp4bNr0fTDbHk6L/article.html
http://www.aviva.co.uk/media-centre/story/17233/the-surprising-effect-of-the-eu-gender-directive-o/
Impact assessment
• Although consumer impacts are clearly adverse,
and any available data has supported the central
assumptions, quantitative calculations are based
on very limited sources of data. We will seek to
build a more complete set of data on which to base
any calculations during the subsequent
consultation phase
Niche markets
• Sheilas’ wheels and Diamond, target women which
may not be so unique anymore because they now
pay the same premiums as male drivers
• ‘1st for women’ is a South African insurance
company appealing to women.They effectively
target the female market because in their
advertisements, they convey the message that
women are generally more responsible
• http://www.youtube.com/watch?v=k8EEy5dhJWc
EU Gender Directive
Test-Achats Case
EU Guidelines
Impact assessment of the ban on gender-based pricing
Expected impact of Unisex Pricing
Unisex pricing in the UK
A brief overview of other EU countries : Fr., Bel. & Lux.
One year on, our prospective
Conclusion
The situation in the UK market
• The search to find alternative sets of data has become
more difficult for underwriters assessing the risks
• It has become clear that consumers are not really
benefiting from this law by a great deal
• It is likely that insurers are experiencing
unpredictability in their pricing grounds as this law
makes its impact
• The gender directive has so far, had a positive effect in
terms of ethics, culture and fairness as a principle
• There are winners and losers
EU Gender Directive
Test-Achats Case
EU Guidelines
Impact assessment of the ban on gender-based pricing
Expected impact of Unisex Pricing
Unisex pricing in the UK
A brief overview of other EU countries : Fr., Bel. & Lux.
One year on, our prospective
Conclusion
France
• 3 categories of insurance companies with 3 different laws impacted
• Non-life insurance similar to the UK
• Life insurance:
• The mortality table used to define the premium must be at least the most prudent
between the official female/male mortality tables provided by the French Institute
of Statistics (INSEE) given the guarantee
• The French law also mentions that insurance companies must payback at least 90%
of the technical profit to policyholders. For instance, if one year there are less death
claims benefits than expected in the premium, the insurer will payback at least 90%
of the extra-premium (through for instance an increase of the sum insured)
• It is possible to use a certified mortality table based on a weighted average between
female and male mortality tables if and only if it is more prudent than the most
prudent between the official female/male mortality tables
Belgium
• Unisex pricing in non-life insurance was already applied before theTest-
Achats Case
• In Life insurance:
• For life guarantees : mortality table equals or not higher than the
XR table (based on a 50/50 average of the MR-FR tables)
• For death cover : mortality table equals or not lower than the XK
table (based on a 50/50 average of the MK-FK table)
• All the stakeholders were consulted in the implementation of theTest-
Achats Case for the law
• Some disagreement remains about the impact and the equality of this
new law between the stakeholders
Luxembourg (mainly freedom to provide services across
EU)
• Up to june 2013, the project of law was not inverted yet (because it is
complex to impact all the laws related to this), but insurers apply the
supervisors guidelines that are in line with the EU directive and
guidelines
• Non-life insurance Similar to the UK
• In Life insurance:
• Unisex mortality table for pricing
• Reserving based on the Unisex Mortality table used for pricing or
not:
• If not the national supervisor provides very detailled guidelines to calculate
reserves by using female/male or weighted average mortality table
EU Gender Directive
Test-Achats Case
EU Guidelines
Impact assessment of the ban on gender-based pricing
Expected impact of Unisex Pricing
Unisex pricing in the UK
A brief overview of other EU countries : Fr., Bel. & Lux.
One year on, our prospective
Conclusion
Gender gap is not homogeneous in
EU
2,0 2,5 3,0 3,5 4,0 4,5 5,0
Belgium
France
Luxembourg
United Kingdom
2011 1998
Figure 7: Gender Gap (Women – Men) in life expectancy at age 65 1998 & 2011 in years - Source :
Eurostat [demo_mlexpec]
Gender gap is not homogeneous
in EU
Life expectancy at birth, male
2011 - Source Eurostat Atlas
Life expectancy at birth, female
2011 - Source Eurostat Atlas
France gender gap projection
62
64
66
68
70
72
74
76
78
80
82
84
86
88
90
92
94
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
Expectancy observed Expectancy projection
(top-best estimate-low)
Female
Male
2009 situation
2009 situation
Figure 6 : Life expectancy at birth time serie and projection by gender in France - Source: INSEE, estimation de population et
statistiques de l'état civil et projection de population 2007-2060
UK gender gap projection
Figure 5 : UK mortality rates prediction 1980-2030 -
Source: Office for National Statistics
Consumer will be more and more
well-informed
• Comparison website for insurance product become very important
and consumers are more and more confortable to compare prices
• Step by step the range of insurance product the consumers can
compare online is increasing:
• The FCA published a report and make recommendations to incent consumer to
compare annuity prices
• In France, an aggregator dedicated to annuity and pensions was launched in
2014 : www.comparetraite.fr
• Consumers do not only compare the prices but also the services
thanks to website like www.quialemeilleurservice.com provided by
Axa in France
• The insurance industry will have to adapt to this new period where
the competition is higher and the product design and pricing model
will change more frequently than before
EU Gender Directive
Test-Achats Case
EU Guidelines
Impact assessment of the ban on gender-based pricing
Expected impact of Unisex Pricing
Unisex pricing in the UK
A brief overview of other EU countries : Fr., Bel. & Lux.
One year on, our prospective
Conclusion
Conclusion
• It is difficult to assess the impact of theTest-
Achats case on the market
• A common rule for an heterogeneous situation in
EU
• At the same time, some US insurers ban unisex
pricing for long-term care insurance
• Big data, telematics, predictive analytics: gender is
just an element of a wider question about
insurance principles based on statistical
discrimination versus ethics
Questions?

More Related Content

Similar to The ECJ Gender Directive One Year On

Takaful Summit - London 2014 Partnership for Growth
Takaful Summit - London 2014 Partnership for GrowthTakaful Summit - London 2014 Partnership for Growth
Takaful Summit - London 2014 Partnership for Growth
Shabbir Razvi
 
Yuki Murakami (OESO) - De meerwaarde van ouderenzorg in België: een profielsc...
Yuki Murakami (OESO) - De meerwaarde van ouderenzorg in België: een profielsc...Yuki Murakami (OESO) - De meerwaarde van ouderenzorg in België: een profielsc...
Yuki Murakami (OESO) - De meerwaarde van ouderenzorg in België: een profielsc...
Ria Binst
 
Bridging the advice gap
Bridging the advice gapBridging the advice gap
Bridging the advice gap
Andrew Power
 

Similar to The ECJ Gender Directive One Year On (20)

Consumer Attitudes Survey 2014 Report
Consumer Attitudes Survey 2014 ReportConsumer Attitudes Survey 2014 Report
Consumer Attitudes Survey 2014 Report
 
Takaful Summit - London 2014 Partnership for Growth
Takaful Summit - London 2014 Partnership for GrowthTakaful Summit - London 2014 Partnership for Growth
Takaful Summit - London 2014 Partnership for Growth
 
Understanding Mortgage Regulation
Understanding Mortgage RegulationUnderstanding Mortgage Regulation
Understanding Mortgage Regulation
 
SOA Annual Meeting 2014 - EU Gender Neutral Pricing
SOA Annual Meeting 2014 - EU Gender Neutral PricingSOA Annual Meeting 2014 - EU Gender Neutral Pricing
SOA Annual Meeting 2014 - EU Gender Neutral Pricing
 
Varma’s January–June 2023 result
Varma’s January–June 2023 resultVarma’s January–June 2023 result
Varma’s January–June 2023 result
 
Road to reform: Driving out compensation culture
Road to reform: Driving out compensation cultureRoad to reform: Driving out compensation culture
Road to reform: Driving out compensation culture
 
Yuki Murakami (OESO) - De meerwaarde van ouderenzorg in België: een profielsc...
Yuki Murakami (OESO) - De meerwaarde van ouderenzorg in België: een profielsc...Yuki Murakami (OESO) - De meerwaarde van ouderenzorg in België: een profielsc...
Yuki Murakami (OESO) - De meerwaarde van ouderenzorg in België: een profielsc...
 
Global Automotive Consumer Study
Global Automotive Consumer StudyGlobal Automotive Consumer Study
Global Automotive Consumer Study
 
Brexit: The Dollar story
Brexit: The Dollar storyBrexit: The Dollar story
Brexit: The Dollar story
 
Aviva Mind The Gap survey regional uk pensions gap
Aviva Mind The Gap survey regional uk pensions gapAviva Mind The Gap survey regional uk pensions gap
Aviva Mind The Gap survey regional uk pensions gap
 
Slides NERI Seminar - PGK & TH - 12 Sept 18
Slides NERI Seminar - PGK & TH - 12 Sept 18Slides NERI Seminar - PGK & TH - 12 Sept 18
Slides NERI Seminar - PGK & TH - 12 Sept 18
 
Nigel Roberts presents 'It’s Time for a Revolution - Insights from the EY Fut...
Nigel Roberts presents 'It’s Time for a Revolution - Insights from the EY Fut...Nigel Roberts presents 'It’s Time for a Revolution - Insights from the EY Fut...
Nigel Roberts presents 'It’s Time for a Revolution - Insights from the EY Fut...
 
SOA Annual Meeting 2014 - Entrepreneurial Start Ups
SOA Annual Meeting 2014 - Entrepreneurial Start UpsSOA Annual Meeting 2014 - Entrepreneurial Start Ups
SOA Annual Meeting 2014 - Entrepreneurial Start Ups
 
Les enjeux de la dépendance – laure de montesquieu, scor
Les enjeux de la dépendance – laure de montesquieu, scorLes enjeux de la dépendance – laure de montesquieu, scor
Les enjeux de la dépendance – laure de montesquieu, scor
 
Our Insights into Antitrust Trends
Our Insights into Antitrust TrendsOur Insights into Antitrust Trends
Our Insights into Antitrust Trends
 
Peter Pontuch- Housing market surveillance #housingfinance
Peter Pontuch- Housing market surveillance #housingfinancePeter Pontuch- Housing market surveillance #housingfinance
Peter Pontuch- Housing market surveillance #housingfinance
 
EFPIA Pharma Transparency Code - EFPIA Disclosure Code
EFPIA Pharma Transparency Code - EFPIA Disclosure CodeEFPIA Pharma Transparency Code - EFPIA Disclosure Code
EFPIA Pharma Transparency Code - EFPIA Disclosure Code
 
L'Oreal Brandstorm - Kiehl's
L'Oreal Brandstorm - Kiehl'sL'Oreal Brandstorm - Kiehl's
L'Oreal Brandstorm - Kiehl's
 
Bridging the advice gap
Bridging the advice gapBridging the advice gap
Bridging the advice gap
 
LG 15.6.2015 Healthcare Compliance GMTCC 2015 EN
LG 15.6.2015 Healthcare Compliance GMTCC 2015 ENLG 15.6.2015 Healthcare Compliance GMTCC 2015 EN
LG 15.6.2015 Healthcare Compliance GMTCC 2015 EN
 

More from R&A - Risk & Analysis

More from R&A - Risk & Analysis (13)

Plan d'Epargne Avenir Climat - Loi Industrie Verte
Plan d'Epargne Avenir Climat - Loi Industrie VertePlan d'Epargne Avenir Climat - Loi Industrie Verte
Plan d'Epargne Avenir Climat - Loi Industrie Verte
 
Synthèse conférence ACPR du 16 06 2017
Synthèse conférence ACPR du  16 06 2017Synthèse conférence ACPR du  16 06 2017
Synthèse conférence ACPR du 16 06 2017
 
Offre de stage en actuariat 2016
Offre de stage en actuariat 2016Offre de stage en actuariat 2016
Offre de stage en actuariat 2016
 
Ethique et statistique en assurance : le cas du tarif unisexe
Ethique et statistique en assurance : le cas du tarif unisexeEthique et statistique en assurance : le cas du tarif unisexe
Ethique et statistique en assurance : le cas du tarif unisexe
 
Solvency 2 : De la réglementation à la pratique
Solvency 2 : De la réglementation à la pratiqueSolvency 2 : De la réglementation à la pratique
Solvency 2 : De la réglementation à la pratique
 
Synthèse conférence ACPR 121213
Synthèse conférence ACPR 121213Synthèse conférence ACPR 121213
Synthèse conférence ACPR 121213
 
AssurMarketing|2013 : le tandem actuariat-marketing - Nicolas Marescaux & Lio...
AssurMarketing|2013 : le tandem actuariat-marketing - Nicolas Marescaux & Lio...AssurMarketing|2013 : le tandem actuariat-marketing - Nicolas Marescaux & Lio...
AssurMarketing|2013 : le tandem actuariat-marketing - Nicolas Marescaux & Lio...
 
Enquete AssurFinance|2013
Enquete AssurFinance|2013Enquete AssurFinance|2013
Enquete AssurFinance|2013
 
Polimi 20121122 r&a
Polimi 20121122 r&aPolimi 20121122 r&a
Polimi 20121122 r&a
 
Slides cocktail ActuariaCnam 121212
Slides cocktail ActuariaCnam 121212Slides cocktail ActuariaCnam 121212
Slides cocktail ActuariaCnam 121212
 
Analysis of Change Best-Estimate Solvency 2 - AoC MCEV
Analysis of Change Best-Estimate Solvency 2 - AoC MCEVAnalysis of Change Best-Estimate Solvency 2 - AoC MCEV
Analysis of Change Best-Estimate Solvency 2 - AoC MCEV
 
Plaquette r&a
Plaquette r&aPlaquette r&a
Plaquette r&a
 
Polimi 20121122 r&a
Polimi 20121122 r&aPolimi 20121122 r&a
Polimi 20121122 r&a
 

Recently uploaded

Proofreading- Basics to Artificial Intelligence Integration - Presentation:Sl...
Proofreading- Basics to Artificial Intelligence Integration - Presentation:Sl...Proofreading- Basics to Artificial Intelligence Integration - Presentation:Sl...
Proofreading- Basics to Artificial Intelligence Integration - Presentation:Sl...
David Celestin
 
Unlocking Exploration: Self-Motivated Agents Thrive on Memory-Driven Curiosity
Unlocking Exploration: Self-Motivated Agents Thrive on Memory-Driven CuriosityUnlocking Exploration: Self-Motivated Agents Thrive on Memory-Driven Curiosity
Unlocking Exploration: Self-Motivated Agents Thrive on Memory-Driven Curiosity
Hung Le
 

Recently uploaded (20)

The Concession of Asaba International Airport: Balancing Politics and Policy ...
The Concession of Asaba International Airport: Balancing Politics and Policy ...The Concession of Asaba International Airport: Balancing Politics and Policy ...
The Concession of Asaba International Airport: Balancing Politics and Policy ...
 
globalisation project report displayed overview
globalisation project report displayed overviewglobalisation project report displayed overview
globalisation project report displayed overview
 
Ready Set Go Children Sermon about Mark 16:15-20
Ready Set Go Children Sermon about Mark 16:15-20Ready Set Go Children Sermon about Mark 16:15-20
Ready Set Go Children Sermon about Mark 16:15-20
 
Digital collaboration with Microsoft 365 as extension of Drupal
Digital collaboration with Microsoft 365 as extension of DrupalDigital collaboration with Microsoft 365 as extension of Drupal
Digital collaboration with Microsoft 365 as extension of Drupal
 
Proofreading- Basics to Artificial Intelligence Integration - Presentation:Sl...
Proofreading- Basics to Artificial Intelligence Integration - Presentation:Sl...Proofreading- Basics to Artificial Intelligence Integration - Presentation:Sl...
Proofreading- Basics to Artificial Intelligence Integration - Presentation:Sl...
 
BIG DEVELOPMENTS IN LESOTHO(DAMS & MINES
BIG DEVELOPMENTS IN LESOTHO(DAMS & MINESBIG DEVELOPMENTS IN LESOTHO(DAMS & MINES
BIG DEVELOPMENTS IN LESOTHO(DAMS & MINES
 
BIG DEVELOPMENTS IN LESOTHO(DAMS & MINES
BIG DEVELOPMENTS IN LESOTHO(DAMS & MINESBIG DEVELOPMENTS IN LESOTHO(DAMS & MINES
BIG DEVELOPMENTS IN LESOTHO(DAMS & MINES
 
Databricks Machine Learning Associate Exam Dumps 2024.pdf
Databricks Machine Learning Associate Exam Dumps 2024.pdfDatabricks Machine Learning Associate Exam Dumps 2024.pdf
Databricks Machine Learning Associate Exam Dumps 2024.pdf
 
Molecular docking- Laxman I. Nimbale.pptx
Molecular docking- Laxman  I. Nimbale.pptxMolecular docking- Laxman  I. Nimbale.pptx
Molecular docking- Laxman I. Nimbale.pptx
 
Abortion Pills Fahaheel ௹+918133066128💬@ Safe and Effective Mifepristion and ...
Abortion Pills Fahaheel ௹+918133066128💬@ Safe and Effective Mifepristion and ...Abortion Pills Fahaheel ௹+918133066128💬@ Safe and Effective Mifepristion and ...
Abortion Pills Fahaheel ௹+918133066128💬@ Safe and Effective Mifepristion and ...
 
Unlocking Exploration: Self-Motivated Agents Thrive on Memory-Driven Curiosity
Unlocking Exploration: Self-Motivated Agents Thrive on Memory-Driven CuriosityUnlocking Exploration: Self-Motivated Agents Thrive on Memory-Driven Curiosity
Unlocking Exploration: Self-Motivated Agents Thrive on Memory-Driven Curiosity
 
ECOLOGY OF FISHES.pptx full presentation
ECOLOGY OF FISHES.pptx full presentationECOLOGY OF FISHES.pptx full presentation
ECOLOGY OF FISHES.pptx full presentation
 
SaaStr Workshop Wednesdays - RevenueCat.pdf
SaaStr Workshop Wednesdays - RevenueCat.pdfSaaStr Workshop Wednesdays - RevenueCat.pdf
SaaStr Workshop Wednesdays - RevenueCat.pdf
 
STM valmiusseminaari 26-04-2024 PUUMALAINEN Ajankohtaista kansainvälisestä yh...
STM valmiusseminaari 26-04-2024 PUUMALAINEN Ajankohtaista kansainvälisestä yh...STM valmiusseminaari 26-04-2024 PUUMALAINEN Ajankohtaista kansainvälisestä yh...
STM valmiusseminaari 26-04-2024 PUUMALAINEN Ajankohtaista kansainvälisestä yh...
 
in kuwait௹+918133066128....) @abortion pills for sale in Kuwait City
in kuwait௹+918133066128....) @abortion pills for sale in Kuwait Cityin kuwait௹+918133066128....) @abortion pills for sale in Kuwait City
in kuwait௹+918133066128....) @abortion pills for sale in Kuwait City
 
LITTLE ABOUT LESOTHO FROM THE TIME MOSHOESHOE THE FIRST WAS BORN
LITTLE ABOUT LESOTHO FROM THE TIME MOSHOESHOE THE FIRST WAS BORNLITTLE ABOUT LESOTHO FROM THE TIME MOSHOESHOE THE FIRST WAS BORN
LITTLE ABOUT LESOTHO FROM THE TIME MOSHOESHOE THE FIRST WAS BORN
 
SaaStr Workshop Wednesday with CEO of Guru
SaaStr Workshop Wednesday with CEO of GuruSaaStr Workshop Wednesday with CEO of Guru
SaaStr Workshop Wednesday with CEO of Guru
 
2024 mega trends for the digital workplace - FINAL.pdf
2024 mega trends for the digital workplace - FINAL.pdf2024 mega trends for the digital workplace - FINAL.pdf
2024 mega trends for the digital workplace - FINAL.pdf
 
BEAUTIFUL PLACES TO VISIT IN LESOTHO.pptx
BEAUTIFUL PLACES TO VISIT IN LESOTHO.pptxBEAUTIFUL PLACES TO VISIT IN LESOTHO.pptx
BEAUTIFUL PLACES TO VISIT IN LESOTHO.pptx
 
Introduction to Artificial intelligence.
Introduction to Artificial intelligence.Introduction to Artificial intelligence.
Introduction to Artificial intelligence.
 

The ECJ Gender Directive One Year On

  • 1. The ECJ Gender Directive One year on Tuesday 1st April 2014 Staple Inn, London lionel.texier@riskandanalysis.com Roshni.Bhudia.1@cass.city.ac.uk LionelTexier – Managing Director R&A Roshni Bhudia –Trainee R&A Magalie Jousset –Trainee R&A
  • 2. EU Gender Directive Test-Achats Case EU Guidelines Impact assessment of the ban on gender-based pricing Expected impact of Unisex Pricing Unisex pricing in the UK A brief overview of other EU countries : Fr., Bel. & Lux. One year on, our prospective Conclusion
  • 3. Fact trigger • 53% of people did not know the gender ruling was happening • Just under 45% believed that they had been unfairly discriminated against • 18% of women considered this ruling acceptable • 45% of men were unclear about the impact of the gender directive • 16% of men thought their premiums would increase http://www.confused.com/car-insurance/articles/eu-gender-ruling-your-need-to-know-guide-to-insurance-price-rises http://www.postonline.co.uk/post/analysis/2287745/gender-directive-new-tricks
  • 4. EU Gender Directive Test-Achats Case EU Guidelines Impact assessment of the ban on gender-based pricing Expected impact of Unisex Pricing Unisex pricing in the UK A brief overview of other EU countries : Fr., Bel. & Lux. One year on, our prospective Conclusion
  • 5. EU Gender Directive • Premiums must be based on "relevant and accurate actuarial and statistical data" (section 13(3ai) e) • Insurance companies are prohibited to support sexual discrimination in their policies since 21st December 2012 • Before this date, insurance companies were given a short period of time to prepare and adjust to this ruling
  • 6. EU Gender Directive 2004: EU directive 2004/113/CE with an opt-out for unisex pricing in insurance article 5 § 2 2007: EU directive 2004/113/CE year of application. ( 12/21/2007 ) 2008 : Test-Achats request to the Belgium « Cour Constitutionnelle » to stop the opt-out for unisex pricing in insurance The Cour Constitutionnelle Belge refers to the ECJ to answer to the test-achats request 2011: C236/09 Test-Achats published by the ECJ EU directive 2004/113/CE is updated, starting from the 12/21/2012 the article 5 § 2 will be invalid for all EU countries 12/21/2012 : the unisex pricing is compulsory for any new insurance policy or some renewals Time 2011: December, EC publish guidelines on the application of the Gender Directive in line with the C236/09 test-Achats Case 2014 : EC report on the implementation of the Test-Achats ruling in national law and in insurance practice
  • 7. EU Gender Directive Test-Achats Case EU Guidelines Impact assessment of the ban on gender-based pricing Expected impact of Unisex Pricing Unisex pricing in the UK A brief overview of other EU countries : Fr., Bel. & Lux. One year on, our prospective Conclusion
  • 8. Test-AchatsCase Figure 2 : The Test-Achats case, from Belgium to the EU - Credits © European Union 2013 Belgian consumer organization that challenged the Gender Directive 2004/113/EC article 5(2) of the European Union.The European Court of Justice (ECJ) passed down its ruling on a case regarding a provision of the Directive.There has been no appeal against this ruling.
  • 9. EU Gender Directive Test-Achats Case EU Guidelines Impact assessment of the ban on gender-based pricing Expected impact of Unisex Pricing Unisex pricing in the UK A brief overview of other EU countries : Fr., Bel. & Lux. One year on, our prospective Conclusion
  • 10. EU Guidelines • The contracts concerned are: • Contracts concluded after 21 December 2012.Therefore, offers made before 21st December 2012 but accepted as from that date will need to comply with the unisex rule • Agreement to extend contracts concluded before that date which would otherwise have expired • It is still possible to collect, store and use gender data for: • Reserving and internal pricing • Reinsurance pricing • Marketing and advertising • Possible to offer gender-specific insurance products (or options within contracts) to cover conditions, which exclusively or primarily concerns males or females (prostate cancer, uterus cancer, breast cancer…) • Using risk factors
  • 11. EU Guidelines Scope of the Directive: The Directive only covers insurance and pension which are private, voluntary and separate from the employment relationship (it excludes group health and accident contracts and occupational pensions covered by Directive 200/54/EC). Monitoring of the guidelines: The commission will: • Make sure that all the EU member states comply to the Directive and the guidelines that started from the 21st December 2012 by adapting their legislation • Remain vigilant to detect any unjustified rise in prices or anti- competitive conduct • Report on the implementation of theTest-Achats ruling in 2014
  • 12. The situation by country before the 21st of December 2012 (source: EUTest-Achats guidelines) Country UK France Belgium Lux. Nether. Cyprus Bulgaria Slovenia Life Insurance YES YES YES YES YES YES YES YES Private health insurance YES YES NO YES NO NO YES YES Mortgage loans N/A N/A NO N/A NO NO N/A N/A Motor Insurance YES YES NO YES NO NO NO NO Travel Insurance YES YES NO YES NO NO N/A N/A Disability/Income insurance YES YES NO YES NO NO N/A YES Consumer credit N/A N/A NO N/A NO NO N/A N/A Annuity products YES YES YES YES NO YES N/A YES Accident insurance YES YES NO YES NO YES NO YES Credit cards N/A N/A NO N/A NO NO N/A N/A Deposit accounts N/A N/A NO N/A NO NO N/A N/A Loan insurance YES YES NO YES NO N/A N/A N/A Home insurance YES YES NO YES NO NO N/A N/A Private liability insurance YES YES NO YES NO NO N/A N/A Long term care insurance YES YES NO YES NO NO N/A YES Critical illness insurance YES YES NO YES NO NO YES YES
  • 13. The situation by country after the 21st of December 2012 Country UK France Belgium Lux. Nether. Cyprus Bulgaria Slovenia Life Insurance NO NO NO NO NO NO NO NO Private health insurance NO NO NO NO NO NO NO NO Mortgage loans NO NO NO NO NO NO NO NO Motor Insurance NO NO NO NO NO NO NO NO Travel Insurance NO NO NO NO NO NO NO NO Disability/Income insurance NO NO NO NO NO NO NO NO Consumer credit NO NO NO NO NO NO NO NO Annuity products NO NO NO NO NO NO NO NO Accident insurance NO NO NO NO NO NO NO NO Credit cards NO NO NO NO NO NO NO NO Deposit accounts NO NO NO NO NO NO NO NO Loan insurance NO NO NO NO NO NO NO NO Home insurance NO NO NO NO NO NO NO NO Private liability insurance NO NO NO NO NO NO NO NO Long term care insurance NO NO NO NO NO NO NO NO Critical illness insurance NO NO NO NO NO NO NO NO
  • 14. EU Gender Directive Test-Achats Case EU Guidelines Impact assessment of the ban on gender-based pricing Expected impact of Unisex Pricing Unisex pricing in the UK A brief overview of other EU countries : Fr., Bel. & Lux. One year on, our prospective Conclusion
  • 15. Expected impact from Unisex Pricing • Risk based pricing • Gender is used for accuracy of pricing premiums that cover these risks. • Setting low premiums for a risky consumer, insurers employ a higher risk consumer group of which the policy can be underpriced • Since one group of consumers benefit from the ban, then it will always make the other group worse off • The lower risk gender may opt out and the higher risk gender may opt in which in turn, will create more riskiness in the market
  • 16. Expected impact from Unisex Pricing Life insurance • Life insurance premiums for new policies were expected to leap by up to a third towards the end of 2012 • Premiums have fallen over the past decade, and expected to rise after the Directive • Premiums for women were likely to rise significantly • According to Confused.com, they expected that women could end up paying around 20 per cent more for life insurance as a result • A study from Oxera predicted “on average women (aged 40) could see life insurance premiums rise by around 30% or more” http://www.confused.com/life-insurance/articles/gender-equality-ruling-cost-of-life-insurance-for-women-to-rise http://www.oxera.com/Oxera/media/Oxera/downloads/Agenda/Gender-in-insurance-market.pdf?ext=.pdf
  • 17. Expected impact from Unisex Pricing Annuities and pensions • An annuity converts a pension pot into income, which is received annually. Not include occupational pension schemes • If you are a male considering purchasing an annuity with your pension pot, you are likely to get a more attractive pension than a woman of your age • ‘Which?’ -Their general consensus was that women’s annuity income will rise by 2.5% and that men’s will fall by 2.5% • ‘ABI’ -They predicted an 8% decrease for men and a 6% increase for women
  • 18. Costs • Eliminating gender is very costly and these costs are transferred to clients through higher premiums, even if the concurrence may moderate this impact for clients • Invest their time and money into re-pricing, altering and printing of updated documents and training their staff as a result of the ban • Insures will also have to boost the amount of capital reserves to protect them against any future financial crises, further pushing premiums
  • 19. Economic uncertainty • European crisis i.e. in Greece and Italy • People have less disposable income so they have had to sacrifice luxuries • Competition
  • 20. EU Gender Directive Test-Achats Case EU Guidelines Impact assessment of the ban on gender-based pricing Expected impact of Unisex Pricing Unisex pricing in the UK A brief overview of other EU countries : Fr., Bel. & Lux. One year on, our prospective Conclusion
  • 21. Statistics • only women aged 17-20 have seen a rise in their premiums, and that was only £9 (£1,706 in November 2013 compared with £1,697 in November 2012) • Men of the same age have seen a drop in prices, with the average premium now coming in at £2,358, as compared with £3,293 (a reduction of £936) • Women overall have seen a fall in premiums of £59 http://www.gocompare.com/covered/2013/12/the-eu-gender-directive-one-year-on/
  • 22. Impact assessment Premium changes following the Gender Directive: http://www.postonline.co.uk/post/analysis/2321740/gender-directive-one-year-on
  • 23. The impact of the ban on gender-based pricing • Motor insurance AA insurance premium index announced at the end of January 2013: “There was a 42% increase in the average best premium for 17-18 year-old female drivers since 1st December 2012, while premiums for 17-18 year-old males decreased by 17% in the same period”
  • 24. Impact assessment • Life insurance • ‘Zurich’ - Coupled with changes to life office taxation, it has meant an increase in prices of some 15-20 per cent for 2013 • It is harder to switch existing cover on price because rates have recently risen Annuities and pensions • Annuity rates have said to decline for males, but female annuity rates are said to have improved • In the second half 2012 an increasing number of men bought an annuity before the Gender Directive came into force • Increase in the number of men bringing their retirement forward to benefit from pre- Gender Directive annuity rates http://www.ftadviser.com/2013/02/07/insurance/life-assurance/how-the-new-eu-gender-directive-has-affected-life-insurance- SONEHl1gp4bNr0fTDbHk6L/article.html http://www.aviva.co.uk/media-centre/story/17233/the-surprising-effect-of-the-eu-gender-directive-o/
  • 25. Impact assessment • Although consumer impacts are clearly adverse, and any available data has supported the central assumptions, quantitative calculations are based on very limited sources of data. We will seek to build a more complete set of data on which to base any calculations during the subsequent consultation phase
  • 26. Niche markets • Sheilas’ wheels and Diamond, target women which may not be so unique anymore because they now pay the same premiums as male drivers • ‘1st for women’ is a South African insurance company appealing to women.They effectively target the female market because in their advertisements, they convey the message that women are generally more responsible • http://www.youtube.com/watch?v=k8EEy5dhJWc
  • 27. EU Gender Directive Test-Achats Case EU Guidelines Impact assessment of the ban on gender-based pricing Expected impact of Unisex Pricing Unisex pricing in the UK A brief overview of other EU countries : Fr., Bel. & Lux. One year on, our prospective Conclusion
  • 28. The situation in the UK market • The search to find alternative sets of data has become more difficult for underwriters assessing the risks • It has become clear that consumers are not really benefiting from this law by a great deal • It is likely that insurers are experiencing unpredictability in their pricing grounds as this law makes its impact • The gender directive has so far, had a positive effect in terms of ethics, culture and fairness as a principle • There are winners and losers
  • 29. EU Gender Directive Test-Achats Case EU Guidelines Impact assessment of the ban on gender-based pricing Expected impact of Unisex Pricing Unisex pricing in the UK A brief overview of other EU countries : Fr., Bel. & Lux. One year on, our prospective Conclusion
  • 30. France • 3 categories of insurance companies with 3 different laws impacted • Non-life insurance similar to the UK • Life insurance: • The mortality table used to define the premium must be at least the most prudent between the official female/male mortality tables provided by the French Institute of Statistics (INSEE) given the guarantee • The French law also mentions that insurance companies must payback at least 90% of the technical profit to policyholders. For instance, if one year there are less death claims benefits than expected in the premium, the insurer will payback at least 90% of the extra-premium (through for instance an increase of the sum insured) • It is possible to use a certified mortality table based on a weighted average between female and male mortality tables if and only if it is more prudent than the most prudent between the official female/male mortality tables
  • 31. Belgium • Unisex pricing in non-life insurance was already applied before theTest- Achats Case • In Life insurance: • For life guarantees : mortality table equals or not higher than the XR table (based on a 50/50 average of the MR-FR tables) • For death cover : mortality table equals or not lower than the XK table (based on a 50/50 average of the MK-FK table) • All the stakeholders were consulted in the implementation of theTest- Achats Case for the law • Some disagreement remains about the impact and the equality of this new law between the stakeholders
  • 32. Luxembourg (mainly freedom to provide services across EU) • Up to june 2013, the project of law was not inverted yet (because it is complex to impact all the laws related to this), but insurers apply the supervisors guidelines that are in line with the EU directive and guidelines • Non-life insurance Similar to the UK • In Life insurance: • Unisex mortality table for pricing • Reserving based on the Unisex Mortality table used for pricing or not: • If not the national supervisor provides very detailled guidelines to calculate reserves by using female/male or weighted average mortality table
  • 33. EU Gender Directive Test-Achats Case EU Guidelines Impact assessment of the ban on gender-based pricing Expected impact of Unisex Pricing Unisex pricing in the UK A brief overview of other EU countries : Fr., Bel. & Lux. One year on, our prospective Conclusion
  • 34. Gender gap is not homogeneous in EU 2,0 2,5 3,0 3,5 4,0 4,5 5,0 Belgium France Luxembourg United Kingdom 2011 1998 Figure 7: Gender Gap (Women – Men) in life expectancy at age 65 1998 & 2011 in years - Source : Eurostat [demo_mlexpec]
  • 35. Gender gap is not homogeneous in EU Life expectancy at birth, male 2011 - Source Eurostat Atlas Life expectancy at birth, female 2011 - Source Eurostat Atlas
  • 36. France gender gap projection 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 Expectancy observed Expectancy projection (top-best estimate-low) Female Male 2009 situation 2009 situation Figure 6 : Life expectancy at birth time serie and projection by gender in France - Source: INSEE, estimation de population et statistiques de l'état civil et projection de population 2007-2060
  • 37. UK gender gap projection Figure 5 : UK mortality rates prediction 1980-2030 - Source: Office for National Statistics
  • 38. Consumer will be more and more well-informed • Comparison website for insurance product become very important and consumers are more and more confortable to compare prices • Step by step the range of insurance product the consumers can compare online is increasing: • The FCA published a report and make recommendations to incent consumer to compare annuity prices • In France, an aggregator dedicated to annuity and pensions was launched in 2014 : www.comparetraite.fr • Consumers do not only compare the prices but also the services thanks to website like www.quialemeilleurservice.com provided by Axa in France • The insurance industry will have to adapt to this new period where the competition is higher and the product design and pricing model will change more frequently than before
  • 39. EU Gender Directive Test-Achats Case EU Guidelines Impact assessment of the ban on gender-based pricing Expected impact of Unisex Pricing Unisex pricing in the UK A brief overview of other EU countries : Fr., Bel. & Lux. One year on, our prospective Conclusion
  • 40. Conclusion • It is difficult to assess the impact of theTest- Achats case on the market • A common rule for an heterogeneous situation in EU • At the same time, some US insurers ban unisex pricing for long-term care insurance • Big data, telematics, predictive analytics: gender is just an element of a wider question about insurance principles based on statistical discrimination versus ethics