Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
Quick links:
  • Home
  • The Actuary Issues
  • June 2016
06

Brexit could affect gender pricing on insurance premiums and annuities

Open-access content 7th June 2016

Prices of insurance products and annuities could be different for men and women in the event of a Brexit due to a possible removal of the EU Gender Directive, according to Aegon.

2


Under "gender-neutral pricing", which forms part of the directive, insurers across the EU must charge the same price to men and women for the same products. 

The insurer said: "This applies even if there is statistical evidence of a difference in life expectancy. In practice this means everyone gets terms somewhere in between what a man and a woman of the same age would have received had there been no gender ruling."

However, it added firms could still differentiate pricing based on other factors that affect life span such as health, smoker status and even postcode.

Aegon said men benefited from gender-neutral pricing for certain products, while women also enjoyed benefits for other types of cover. 

The firm explained that before the rule was introduced in December 2012, women had cheaper life cover and car insurance than their male counterparts, but lost out on annuities. 

Since women live longer than men on average, they receive annuity installments for a lower amount but for a longer period of time, according to the firm. However, with gender-neutral pricing, "women benefit from the gender ruling and men lose out".

Aegon's pensions director Steven Cameron said: "Different life expectancies between men and women mean gender neutral life insurance and annuity rates create winners and losers between the sexes."

For a secondary annuity market, which will be implemented April next year, Cameron said it was not clear if buyers would be allowed to know the gender of the annuitant and factor it in to calculate their price offer. 

Aegon said any buyer would want to make an accurate assessment of how long the seller might live. On their death, the buyer will stop being entitled to future payments. 

The firm predicted that women could attract higher offers than men of the same age unless the gender ruling stops this.

Cameron said: "The government's intention to allow individuals to sell their annuities on a secondary annuity market from next April will create many new challenges, not least around interpreting the gender ruling. 

"We need urgent clarity on whether or not those buying second-hand annuities will be allowed to offer women more than men of the same age."

In the event of a Brexit, Aegon said the UK government would have a choice to make as to whether to revert the rules, but Cameron said this would be unlikely, since the public would need to support gender-specific pricing.

He said: "The gender ruling originated in the EU. However, even if the UK voted to leave the EU, it would be highly contentious for any politician to consider reintroducing gender discrimination in any area."

This article appeared in our June 2016 issue of The Actuary.
Click here to view this issue
Filed in:
06
Topics:
General Insurance
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Longevity Proposition Development Actuary

London (Central)
£90,000 - £110,000 depending on experience
Reference
118704

Senior Financial Risk Actuary

London, England
£55000 - £100000 per annum
Reference
118752

Senior Reserving Analyst

England, London
£45000 - £60000 per annum
Reference
118751
See all jobs »
 
 

Most-Popular

 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2020 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, Level 5, 78 Chamber Street, London, E1 8BL. Tel: 020 7880 6200