Unisex Insurance Pricing: Consumers’ Perception and Market Implications

Hato Schmeiser, Tina Störmer and Joël Wagner
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Hato Schmeiser: Institute of Insurance Economics, University of St. Gallen, Kirchlistrasse 2, 9010 St. Gallen, Switzerland. E-mails: hato.schmeiser@unisg.ch; tina.stoermer@unisg.ch; joel.wagner@unisg.ch
Tina Störmer: Institute of Insurance Economics, University of St. Gallen, Kirchlistrasse 2, 9010 St. Gallen, Switzerland. E-mails: hato.schmeiser@unisg.ch; tina.stoermer@unisg.ch; joel.wagner@unisg.ch
Joël Wagner: Institute of Insurance Economics, University of St. Gallen, Kirchlistrasse 2, 9010 St. Gallen, Switzerland. E-mails: hato.schmeiser@unisg.ch; tina.stoermer@unisg.ch; joel.wagner@unisg.ch

The Geneva Papers on Risk and Insurance - Issues and Practice, 2014, vol. 39, issue 2, 322-350

Abstract: The main reason for different insurance premiums and benefits is the use of different statistically proven risk factors in actuarial calculations for individuals. Basing its ruling on European Union Directive 2004/113/EC, the European Court of Justice on 1 March 2011 concluded that any gender-based discrimination is prohibited, so gender equality in the European Union (EU) must be ensured from 21 December 2012. Until then, gender-specific premium differentiation was allowed in most EU Member States for risks that are strongly linked to gender. We discuss the relevance of price differentiation criteria from the point of view of insurers, regulators and ethicists, and reflect on the degree of acceptance of such price differentiation by consumers, which is assessed empirically through an international consumer survey conducted in the United Kingdom, Germany, France, Italy and Switzerland. The perception of risk factors and of effective gender-related price differences is considered with respect to motor, annuity, term life and health insurance. Finally, we discuss possible consequences of the new regulation for the insurance industry.

Date: 2014
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