Motor Insurers and the Gender Directive (Part 3 of our Gender Directive Series)

According to research carried out by Barnett Waddingham, motor insurance premiums have gone up despite your gender!     Many thought that men would benefit from cheaper premiums due to the Gender Directive which came in force on 21 December 2012.  Surprisingly, the premiums for men are increasing as well, albeit not as much as women.  This may be due to the increasing claims costs of third party bodily injury claims, fraudulent claims...etc.  So it seems like men and women are in the same boat!

So the question is:  what are insurers doing to attract lower risk drivers, in order to maximise their profit (or minimise their losses).

There is a vast amount of statistical evidence to show that women have lower claim costs than their male counterparts.  So it makes sense to charge women lower premiums than men as they are lower risks (arguably better drivers) but now unisex rates have to be used.  As a result it has become more important than ever that insurers attract lower risk drivers so they can afford to lower their premiums, on average, and also hopefully maximise their profits. In the hope of offering competitive premiums, some insurance companies are trying to create a pool of women drivers in their portfolio by marketing their products to them.

It is not new that some motor insurers target their business to women only but now they have to step up their marketing campaign to ''deter'' men.  Whether it is to attract women or to deter men, there are some so called 'non-neutral' marketing strategies.

Below are some of the tactics used by well-known insurers such as ""Diamond" and "Sheila's Wheels":

  • offering a £50 clothes shopping voucher
  • offering free handbag insurance
  • having love hearts scribbled across their website, images of young girls and links to ‘girly lunches’
  • advertising  through women’s magazines only
  • continuously refer to their insurance as ‘women’s car insurance’
  • offering a prize of year’s supply of shoes
  • stating on their website that their “car insurance is designed with women in mind”

We also noticed a new generation of insurance companies popping up recently – ‘Drive like a girl’ is a very good example, it has a very similar “girly” marketing strategy but instead it relies on telematics. A black box (telematics box) is fitted in to the car which monitors and records various aspects of driving such as the speed, breaking, and acceleration. A ‘good’ (lower risk) driver who  drives safely will pay lower premiums than a ‘bad’ driver who exhibits risky driving behaviours like speeding or brake harshly. By fitting a telematics box, better (women) drivers can receive cheaper premiums and save money on their car insurance.  Men who ‘drive like a girl’ can also benefit from these discounts!

Men are not excluded from buying insurance from these insurers. There is nothing stopping them from passing on the shopping vouchers, shoes and other womanly perks to their female friends, or indeed using them themselves.  A cheaper insurance premium plus a new pair of girly shoes for the other half or their mother – happy days!