Published by Cherry Chan on
We’ve been collecting data from money supermarket over the last couple of years based on a 25 year old living in central London driving a VW Golf. Our previous blog stated that women’s premium rates will increase and men’s premiums will decrease, whether or not they would offset each other was in question, but now we can look in to some recent premiums since 21st December 2012.
Graph 1 above shows the average premiums for men and women from March 2011 to January 2013. (Note no readings were taking between March and July 2012). Clearly the premium rates have converged to an equalised rate since the gender ruling as expected. On average the premium rates for men and women have gradually increased over the last two years.
Since G-day the difference between the average male and female premium rates have unified at a value of zero as we would expect. However our analysis briefly found premium rates from two insurers that were different for men and women, although these have since converged. This is highlighted in Graph 2 where the difference in premiums is not zero after 21/12/2012. For this reading there were exact differences of £247, and £246 in premiums between men and women from 2 different insurers for the policies quoted. The issue had been rectified and the premium rates were equalised from the insurers, just as they were before. This data does pose the question of why this had occurred. Perhaps it is as simple as a system error, as the introduction of the gender ruling means that insurers have had to change models and databases to calculate the new premiums rates.
By analysing our data at different points – see Graph 3 below, we have calculated the percentage increase in premium rates for men and women. Female premiums have risen 53% since March 2011, whereas male premiums have risen by only 22%.
The vast majority of this increase, for both women and men has occurred in the last year; with rates rising 46% and 23%, respectively. Retrospectively looking at the data it seems as though insurers started to inflict the premiums hikes for women from October 2012, and since then the premiums have escalated, making them nearly one and a half times what they were a year ago for women. This sharp rise can be seen in Graph 3 below. One must bear in mind that the Gender ruling may not be the only driver causing premiums to rise, as bodily injury claims may also be a contributing factor.
Even in the last days leading up to G-day, female premiums have risen by 13% since the beginning of December 2012, and male premiums have risen only 3%. This confirms that female have been impacted significantly more than male at the younger age group by the gender ruling. Male premium rates certainly haven’t offset the increase in female premiums as both have risen, but one thing for sure is that younger women are paying a lot more than they were a year ago. And to be honest not much has changed for younger men as they continue to see their premiums rise gradually, and any thoughts of smaller premiums for younger men have vanished.
The regulations may have served its intended purpose of fairness by unifying the female and male premium rates but it seems like the customers of both gender are not better off because of it.
Look out for our next blog which will monitor what is currently out in the motor insurance market.