G-Day Something Down Under?

G-Day has nothing to do with Australians, but one might chuckle that it has something to do with down under. G-Day is actually Gender Change Day… yes you did read that correctly (no I didn’t – its actually Gender Directive). Before you start shouting at your computer that you’ve just about had enough of excuses for more greetings cards, this is in fact a European… no, not yet…directive (hold on) that makes it illegal for insurers to discriminate between male and female. In other words men and women must be charged on the same basis – much like this week’s news that equal pay for equal work, except of course that when it comes to insurance, there is nothing so unfair as equality. Eh? What I mean is that women live longer (sweeping generalism, but generally true) so they get cheaper life assurance. Now they won’t.  It also applies to car insurance and annuities, in fact any insurance.

Brussels for Christmas?

So in the interests of showing what this may mean (because the truth is that we don’t actually know yet…. remember I am something of a truth fan, despite the cost). Anyway a fairly major insurer emailed me yesterday (Liverpool Victoria – credit where it is due). G-Day is set for 21 December 2012 (21/12/2012)… methinks that the Brussels powers like amusing numbers. Anyway the table below is LV’s attempt to outline their take on potential changes.

Product type	Currently, on average…	Potential impact of Gender and I minus E changes**
		Male	Female
Income Protection	Women pay 65% more than men	+20%	-28%
Critical Illness (with Life)	Men pay 10% more than women*	+6%	+16%
Term	Men pay 10% more than women	+3%	+22%
Underwritten Whole of Life	Men pay 20% more than women	-5%	+15%

As all tables come with a caveat or two…..”There are so many factors affecting premiums that it is impossible to give a single definitive figure that will apply to everyone. The extent of change will vary by provider, will differ by product class and be determined by the individual circumstances of the client. Added to this, we expect to witness a fair amount of re-pricing activity in early 2013 as providers attempt to get to grips with the new gender neutral world.”

More Unintended Consequences

You will quickly gather, that women will be paying more for most insurance. I’m going to stick my neck out and guess that this probably was not the Eurocrats intention. What it does mean is that you will probably need to review your protection arrangements if you are a woman with income protection. Admittedly this is one insurers take on life, but LV are generally pretty competitive. They also have a dedicated website called “no more guesswork“.

Early Christmas for commission hungry insurance salespeople? surely not!

I may have bored you senseless about the new adviser charging regime starting on 1st January 2012. Ironically this does not apply to insurance, so I’m guessing that commission based advisers will be fairly eager to get people to switch their cover (generating new commission) so be warned. There will will be some advisers (like ourselves) who simply charge a fee for the work and remove the commission entirely. I write this as yet another email arrives telling me that a very well known company can offer me even more commission with their new charging structures (note it wasn’t LV).