Major insurers are announcing how they will deal with gender neutral pricing which comes into effect in December.
As the EU gender directive deadline approaches, major insurers have begun to reveal their plans for managing business in the run up to the deadline. The gender directive comes into effect on 21 December 2012. It will prevent insurers from pricing protection plans differently for men and women.
Zurich, LV= and Aviva have all announced their plans for handling business in the lead up to the December deadline. LV= and Aviva have said they will honour gender specific pricing up to close of business on 20 December, providing applications meet certain criteria.
Zurich will switch to gender neutral pricing on 10 December for its whole of life Adaptable Plan and its income protection products. For level protection and decreasing mortgage cover plan the deadline will be 17 December. Applications submitted before this deadline will be treated on gender specific pricing up until 21 December.
AEGON opts for stricter policy
AEGON, a multinational life insurance provider based in the Netherlands, has opted for stricter policies regarding gender neutral pricing. Other providers are guaranteeing policies will still be processed under gender specific pricing if they are received before the deadline. AEGON, however, has confirmed that for client to receive gender specific prices they must have accepted the terms before the deadline.
This means payment must have been set-up and a start date agreed for the policy before the 21 December deadline. AEGON has announced the formation of the specific team to deal with pipeline business to ensure it is completed before the deadline to ensure customers gender specific pricing where possible.
Rod McKie, head of At Retirement proposition at AEGON, said, “We recognise that the run up to 21 December will be a busy time for advisers and we want to do all that we can to ensure that applications are processed as quickly as possible prior to the deadline.
“Working in partnership with advisers, this dedicated pipeline service team will ensure that we are proactively sourcing all information required to complete business.”
Consumers should still shop around
Women have benefitted from gender specific pricing in severals ways. For example, cheaper car insurance due to a lower accident rate. Men tend to receive higher annuity rates due to a shorter average life expectancy. Estimates suggest the gender directive could add up to 15 percent to the cost of life insurance for women.
ABI director general, Otto Thoresen said, “It is important to remember that gender is one factor of many used by insurers, and we hope our guidance will encourage customers not to focus on price alone, but to think about their needs and shop around for products that are most suitable for them.”