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ABI Publishes Key Consideration Points For Consumers With One Month To Go Until Genderneutral Insurance Pricing

With one month to go until gender-neutral pricing, the Association of British Insurers (ABI) has today stressed that the insurance market will remain competitive despite the ruling and has published key consideration points for consumers set to be affected by the changes.

Adeola Ajayi, spokesperson at the Association of British Insurers, said:

“We lobbied against this ruling for nearly a decade. Insurance is all about matching price to risk and we wanted to retain the right to offer customers fair premiums and benefits based on risks linked to different genders.

“Insurers are now busy working hard to adjust their systems and remain committed to offering premiums and benefits that reflect risk as accurately as possible, despite having to ignore decades worth of data. The UK insurance market is competitive, with customers able to shop around many insurers, and it will remain competitive, gender or no gender.”

The ABI has produced guidance for consumers at www.abi.org.uk/genderruling

Key consumer consideration points

· Policies set to be affected are motor insurance, life, critical illness and income protection insurance and retirement products, such as annuities.

· Remember, gender is only one factor of many that insurers use to price premiums and benefits.

· Customers, should not focus on price alone, but make sure they take out policies that are suitable for their needs.

· It is important to shop around. Shopping around for an annuity, including seeing whether you qualify for an enhanced annuity for example, could have a much bigger difference on your benefit. An ABI initiative will make it much easier for customers to do this.

· Seek advice from your insurer, broker or an independent financial adviser to better understand your options.

· Customers considering cancelling current policies to renew early should consider this carefully as it may well become a false economy once cancellation and other transactional costs are factored in.

· The purchase of insurance products, especially retirement products, which are a once in a lifetime purchase, should never be rushed. Speak to a broker or independent financial adviser to fully understand your options.

Gender has always been one factor in assessing risk in insurance, with different risks linked to gender being taken into consideration to calculate premiums and benefits. Women, for example, have typically benefited from lower car insurance premiums because of their lower accident rates, and men have tended to receive higher annuity rates because of their shorter life expectancy. But a ruling from the European Court of Justice in March 2011 means this will all change by 21st December 2012 as insurance pricing becomes 'gender-neutral'.

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Notes for Editors

1. Enquiries to:

Adeola Ajayi 020 7 216 7521 Mobile: 07725 245 284

Kelly Ostler-Coyle 020 7216 7375 Mobile: 07968 364 302

Linsey White 020 7216 7415 Mobile: 07885 998 011

Malcolm Tarling 020 7216 7410 Mobile: 07776 147 667

2. The ABI is the voice of the UK’s insurance, investment and long-term savings industry. It has over 300 members, which together account for around 90% of premiums in the UK domestic market.

The ABI’s role is to:

- Be the voice of the UK insurance industry, leading debate and speaking up for insurers.

- Represent the UK insurance industry to government, regulators and policy makers in the UK, EU and internationally, driving effective public policy and regulation.

- Advocate high standards of customer service within the industry and provide useful information to the public about insurance.

- Promote the benefits of insurance to the government, regulators, policy makers and the public.

The UK insurance industry is the third largest in the world and the largest in Europe. It is a vital part of the UK economy, managing investments amounting to 26% of the UK’s net worth and contributing the fourth highest corporation tax of any sector. Employing over 290,000 people in the UK alone, the insurance industry is also one of this country’s major exporters, with 28% of its net premium income coming from overseas business.

Insurance and businesses protect themselves against the everyday risks they face, enabling people to own their own homes, travel overseas, provide for a financially secure future and run businesses. Insurance underpins a healthy and prosperous society, enabling businesses and individuals to thrive, safe in the knowledge that problems can be handled and risks carefully managed. Every day, our members pay out £147 million in benefits to pensioners and long-term savers as well as £60 million in general insurance claims.

3. An ISDN line is available for broadcasts.

4. More news and information from the ABI is available on our web site, www.abi.org.uk.

Last updated 01/07/2016