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Swedish women will likely start paying higher car insurance

Wednesday, 07 March 2012
Insurance companies in Sweden will no longer be able to carry out risk assessments based on gender when a car insurance policy is taken out. The effect of this will be that women will pay significantly higher insurance premiums unlike before.

Today, auto insurance for men is about 45 percent more expensive especially for men aged 18-25 years than for a woman of similar age. Young men have long been described as more likely to cause accidents than young women, but the risk assessment based on gender is something the EU is now putting on top of its insurance rule.

“I understand that insurance companies need different parameters for their risk management, but by gender and age will see each lot painted with the same brush. Ideally, high-risk behaviours at the individual level will increase premium. But it can be understood to require new ways for insurance companies to collect and manage information,” said Erik Lif, CIO at the company Insplanet that mediates insurance.
EU directive on sex discrimination issues relating to insurance has been around since 2006, but if insurance companies by means of statistical demonstration show that there are differences between the sexes, there exceptions could be made.
The new directive comes into force on 21 December 2012 and involves that insurance companies will have to make significant price adjustments. The consequence is expected that young women will have to pay more when they sign new car insurance. Something one of the industry player claims is only short term.

“We will be better able to understand the risks at the individual level. In the short term, maybe we are will not able to as such this could mean a price increase for young women,” says Daniel Eriksson, product director at the insurance company Folksam.

Exactly how large the increase will be will be determined by the insurance companies which will need to be decided at which time based on their data at the time. But when prices of car insurance for men and women will approach each other, it also means that young men can look forward to a reduction.

“Yes most likely young men could pay slightly less than they do today, but I think that especially young women will experience a more noticeable increase,” said Erik Lif.

There are already technologies used in professional service to monitor a driver's driving habits with GPS - a navigation system. Insurance companies association, Försäkringsbolagen, is now investigating whether a similar box can be installed as a step to make risk assessments more individual.
By Team

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