What future for auto insurance premiums?

Following the judgment of the European Court of Justice of 1 March 2011, insurers are no longer allowed to take into account the sex of the insured to establish insurance premiums. A senator would like to know the practical consequences on automobile insurance.

The European Court of Justice (ECJ), in its decision of 1 March 2011 (see JA, No. 827, March 2011, p.12) retained, based on the directive of 13 December 2004, that “take into account the sex of insured individuals as a risk factor in insurance contracts constitutes discrimination “and asked insurers to no longer take into account, from 21 December 2012, gender differentiation in setting premiums.

The Minister of the Economy and Finance was questioned about the increase in the price of car insurance for female drivers by Senator Catherine Procaccia, following the decision of the ECJ, while recalling that this decision should theoretically result in a decrease Rates for men. The senator would like to know if controls will be put in place to verify the application of this provision.

ACCIDENT FREQUENCY AND LOSS RATIO

As a first step, the Minister wanted to make a concrete point on the reality of the frequency of accidents and loss experience. Available statistics relating to tariff differences between men and women for motor insurance were carried out by the French Association of Insurance, which includes the French Federation of Insurance Companies (FFSA) and the grouping of mutual insurance companies. insurance (GEMA).

In 2011, statistics show that the insured population is becoming more feminized for automobile insurance: in 1989, women accounted for less than a quarter of car insurance underwriters, whereas in 2011 they represented third of all contracts. Moreover, in 2011, the frequency of accidents caused by female drivers exceeds that of accidents attributable to drivers by 8%. However, although accidents caused by female drivers are slightly more frequent, they are less severe, with an average cost of claims of less than 8%.

Thus, according to the Minister of the Economy and Finance, “these two effects are more and more offset and there is a tendency to convergence between men and women of the theoretical premiums necessary to cover the material and physical damage suffered during of the accident of a vehicle “.

However, the minister notes a persistent gap in claims experience between men and women on the novice driver population. Indeed, for drivers with less than two years of license, the total cost of claims caused by men is still 36% higher than that of women – the differential was 88% in 2009. This difference is narrowing. very significantly after two years of license, with a difference of 16% between two and five years of license and, beyond, a near-equilibrium.

According to these statistics, after five years of license, the sex of the driver no longer affects technical pricing.

TAKING INTO ACCOUNT “REAL RISK FACTORS”

The Minister of the Economy and Finance recalls that, according to the ECJ, “insurers remain authorized to use other risk factors related to sex to determine their rates, since these are indeed risk factors real “. As a result, “insurers continue to be allowed to use other rating criteria depending on the profiles of the insured, in particular young drivers, even indirectly related to sex, such as the type of vehicle, its age, the frequency and nature of the vehicle. its use “. In addition, the evolution of the pricing according to the coefficient of reduction-mark-up – the bonus-malus automobile – makes it possible to adapt the amount of the premium to the actual loss experience of the holder of the contract.

The Prudential Control and Resolution Authority’s Business Practices Control Department will ensure that automobile insurance rates comply with regulations and do not discriminate against a category of insured.