The EU Gender Directive came into play on Dec 21st. So what impact has it had for consumers and road risk only motor trade insurance premiums?
The consensus was that male motor trade insurance premiums would fall whilst premiums for females would increase when rating models were combined. There were also concerns that the directive would steer premiums upwards by as much as 25% and force many female motorists off the road.
What will the impact on motor trade insurance premiums be?
The market for motor trade road risk insurance premiums (road risk only) is estimated to be up to 140 million GWP. So female motor trade insurance premiums could have been set to rise following the ruling, like their private car counterparts.
However there is good news for female motor trade insurance premiums. The base rates used to calculate the motor trade insurance premiums have always been set on a gender neutral basis. The leading road risk only insurers’ motor trade insurance premiums have never differentiated between the sexes. Perhaps they were early trail blazers in the quest for sexual equality in the field of insurance underwriting?
It is more likely that there was a fairly low number of female motor traders. Therefore underwriters probably judged the rates didn’t warrant special attention in their already relatively complex rating models. So the outcome is that there will be no windfall for male motor traders. Female motor trade insurance premiums will carry on as was. The impact of the directive should be null and void.
Yet, with or without an equal base rating, cynical commentators might speculate that insurance underwriters would see the ruling as an opportune moment to introduce motor trade insurance premium rate increases.
However at Trade Plan we are actually seeing that average new business motor trade insurance premiums across the board are down by 2.3% compared to the last quarter of 2012. Find more details on the Eu Gender Directive ruling here.
*NB – Since this post date we have undergone a re-brand. The various sub-brand departments that were within Plan Insurance such as Taxi Plan, Commercial Plan, Trade plan etc. were brought together under the one name of Plan Insurance Brokers in July 2015. Read more about our re-brand here.