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Gender-neutral insurance pricing

Today (1st March 2011), the European Court of Justice (ECJ) ruled that insurers will no longer be able to use a person’s gender as a factor in calculating the cost and benefits of their insurance.

There is a transition period before this change in law takes effect on 21 December 2012.

We will now work through the detail of this ruling and assess what this means for our customers. The impact will depend on each customers’ individual circumstances but given the transition period to 21 December 2012, there is no immediate change to customers’ current insurance cover with us.

We will make changes to our systems so that we can provide unisex pricing for our customers in the EU as required by the ruling and make this transition as smooth as possible. Gender is only one of many rating factors that we use to assess a customer’s risk. We’ll continue to invest in ways to reflect differences in the risk that individuals bring, to ensure we can charge the most appropriate premium for each individual customer.

Fundamentally, we believe that insurance remains good value and will continue to play a vital role in helping people to protect what they have today and to plan, invest and save for their futures.

We already have experience of underwriting without taking gender into account (eg in our businesses in Italy, Ireland and France) – so our customers will benefit from the fact that we can share that expertise across Aviva.

Background

The origin of this is a legal challenge from Test Achats (the Belgian Consumer Association) questioning Belgium’s implementation of the 2004 Gender Directive. This was referred to the European Court of Justice (ECJ) where the Court argued that the opt-out contained in the Gender Directive allowing the use of gender in risk pricing was not compatible with the principles of equality guaranteed in European legislation. The UK insurance industry argued against this through the UK Government, however, in September 2010 the Advocate General issued an opinion in favour of this approach, agreeing that the principles of the opt-out were not compatible.