Judgment of the European Court of Justice unfavorable to clients

The European Court of Justice has decided that from 21st December 2012 there will be no possibility to calculate different premiums on account of client gender.

In the opinion of the Polish Insurance Association, the decision of the European Court of Justice violates the chief principle used in insurance for several hundred years: risk must be calculated in accordance with all the information which is essential from the insurance point of view. The entire insurance environment objects to the decision of the ECJ – insurers, reinsurers, brokers and self-government organizations.

Contrary to the justification of the ECJ judgment, calculating different premiums on account of client gender is not an indication of discrimination, but only an expression of insurers’ concern about the best risk evaluation, which allows offering products which are best adjusted to client needs. Insurers calculate different premiums only when the actuarial calculations prove beyond reasonable doubt that there is a relation between an insurance event and the gender or other features.

The ECJ judgment deprives clients of the possibility to purchase insurance products where the risk (and its evaluation) is precisely tailored to their individual needs. One example may be motor vehicle insurance where women pay lower premiums because they are involved in a smaller number of accidents.

In the opinion of the Polish Insurance Association, there is a genuine danger that the ECJ judgment will trigger an increase in average rates of all businesses where the gender criterion is used. Apart from motor vehicle insurance, this will also affect individual life insurance.

According to the official position of the European Insurance and Reinsurance Federation (CEA), gender has statistically been proven as a factor influencing the insurance risk, and the ECJ decision will have a major impact on the increase in insurance prices all over Europe.
The Polish Insurance Association emphasizes that all the insurance contracts concluded so far on the basis of the gender criterion are valid and the clients are guaranteed full insurance protection.