Call it biology, evolution or just testosterone, but chances are that the driver of the mangled vehicle wrapped around a lamppost is or maybe was male. Men drive more recklessly and cause more accidents than women. They also tend to live shorter, less healthy lives than women. These aren't just broad gender generalizations but measurable statistics that insurers take into account when they draw up their policies. Which is why men tend to pay more than women to insure their cars, and get more generous pensions.
But not for much longer in Europe, at least. In a ruling issued on Tuesday, the Luxembourg-based European Court of Justice, the European Union's top court, banned insurance companies from using gender as a way to work out premiums. The case was brought by a Belgian consumer group which challenged differential pricing for men and women. The judges upheld the complaint, ruling that using statistics about differing life expectancies or road-accident records between the sexes to calculate car and health insurance and pension schemes breaches E.U. rules on equality.
The verdict, which applies from December 21 next year, cannot be appealed and is expected to drive overhauls in the insurance industry as providers bring the policies of men and women closer together presumably by raising how much women pay and lowering rates for men. And it has already elicited howls of outrage. "This ruling is utter madness," said Sajjad Karim, a British Conservative Member of the European Parliament. "Boy racers will now have even more money to buy unsafe fast cars, whilst safer drivers will be hit hard in their insurance premiums." The CEA, the European insurance federation, said the verdict was "bad news," arguing that the use of evidence-based statistics was "indispensable in actuarial science." Meanwhile, The Association of British Insurers said the decision would actually reinforce price discrimination, with women drivers under 26 in the U.K. facing a 25% rise in car insurance rates, as rates for men in the same age group drop by 10%.
Statistics certainly make a compelling case for sex discrimination. A male driver under 21 is twice as likely to have an accident than a woman under 21, insurers say. In 2009, almost 76% of all road fatalities in the E.U. were male. And other statistics show that women in Europe will live around 6.5 years longer than men. Moreover, the development of the new discipline of "gender medicine" in places like Germany and Austria has shown that men and women are affected differently by the same diseases and react in different ways to the same medicine, and therefore need different treatments.
But that logic is rejected by Leanda Barrington-Leach, spokeswoman for the Brussels-based European Women's Lobby, who says the issue is about what criteria to use to set premiums. "A black man may typically have a shorter life expectancy than a white man, but you could not use race as a factor to set his premium," she says. "There are other factors that can and should be taken into account."
Laurianne Krid, policy manager at FIA, which represents motoring clubs around the world, makes a similar argument to support Tuesday's ruling. "Women are safer drivers statistically, but they should pay according to their real risk, which can be calculated objectively," she says. "We want insurance to be based on criteria like type of vehicle, the age of the driver, how much you drive during the year, and how many accidents you have had."
While insurers have warned that the ruling will lead to a premium price hike all round, Krid says this is scaremongering. "We don't have any reason to believe this should result in a rise in premiums. Gender was only one factor in a pool of many criteria anyway," she says, adding that nonetheless, there is a chance that unscrupulous insurers will simply re-price women's rates upwards without lowering men's rates.
But quite apart from the business implications for insurers, the ruling has a broader significance for E.U. equality legislation. Equality between men and women was enshrined in the European project from the beginning, but discrimination remains widespread. Despite out-performing their male counterparts academically, for example, European women still get lower pay and fewer top jobs.
Until now, discrimination in setting insurance rates has been allowed under E.U. rules, "if sex is a determining risk factor... substantiated by relevant and accurate actuarial and statistical data." The question for the Court on Tuesday was whether the data justified such a distinction. On that issue, the judges relied heavily on a preliminary ruling issued last September by the Court's advocate general, Juliane Kokott, who pointed to behavioral traits like smoking and drinking, participation in sports, and stress levels as better indicators of longevity. Indeed, Kokott argued that despite the wealth of statistics, there is nothing innate and biological about women that makes them live longer. And the Court agreed: for all the damning evidence of men behaving badly, gender can no longer play a part in how much someone pays for insurance.