The Gender Directive

1
The Gender Directive

• Implementation of data publication requirements
  in the United Kingdom
• Presentation to EC Forum on the implementation of
  Article 5 of Directive 2004/113/EC
• Heather Miller 9 September 2009

2
Background

• Gender Directive was implemented in the UK by
  means of the Sex Discrimination (Amendment of
  Legislation) Regulations 2008 amending the Sex
  Discrimination Act 1975.
• From 6 April 2008, these regulations specify the
  conditions under which insurance companies are
  allowed to differentiate based on gender
  differences when pricing insurance policies. 
• One condition is that the use of gender as a
  factor in the assessment of risk is based on
  relevant and accurate statistical data. 
• A second condition is that this data must be
  compiled, published and regularly updated in
  accordance with guidance issued by HM Treasury.

3
Treasury guidance on data publication

• Published March 2008
• Available on HM Treasury website
• Produced on the basis of discussion with industry
• Data is published by the Association of British
  Insurers and the Continuous Mortality
  Investigation organised by the UK actuarial
  profession

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Data Publication Requirements

• Only apply to products where gender is a factor
  in the calculation of premiums and benefits
• Data must be published in a form that is
  intelligible to a non-expert
• The publication must identify the source of the
  data and the period to which it relates.
• Technical terms must be explained
• Data requirements are set out in more detail in
  guidance for each main policy type

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Products for which data publication is required
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Nature of data publication

• In single year age points or five year age bands
• Longer age bands are permitted where populations
  are small e.g. critical illness policyholders
  lt30 years old or motor insurance policyholders gt
  80 years old
• In some cases publish ratio of male to female
  outcomes (e.g. mortality rates), in some cases
  publish ratio of average costs per policy
• Data should be reviewed and, if necessary,
  updated at intervals not exceeding a set period
  (3-4 years for most products)

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Example 1 Motor insurance
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Example 2 Private medical insurance

• Average cost of a claim per policy for women as
  a percentage of average cost of a claim per
  policy for men for Private Medical Insurance,
  2005-
• 2007
• This data is based on an average cost of a claim
  per policy provided by four insurance companies.
  To protect the confidentiality of the data, this
  is unweighted.

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Considerations re publication schemes

• Who is the audience for the data?
• How will data be made publicly available?
• How will competition be protected?
• Who will collate the data?
• How often will the data be updated and who by?
• Are the cost and resources required worthwhile?

10
More information Guidance http//www.hm-treasury
.gov.uk/d/consult_insurance070308.pdf Published
data http//www.abi.org.uk/Facts_and_Figures/Data
_by_Age_and_Gender.aspx
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ANNEX Publication requirements for different
insurance products
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Life insurance and Annuities

• Publication may be by way of a table or chart
  illustrating the ratio of male to female
  mortality for insured risks in the United Kingdom
  or an appropriate region. The published data must
  illustrate recent differences in mortality by
  gender and by age. It may be based on graduated
  data using single year age points or raw data by
  age ranges not exceeding five years up to age 75
  and 10 year age ranges thereafter.
• The published data may aggregate different forms
  of annuity and life assurances. It should be
  reviewed and, if necessary, updated at intervals
  not exceeding four years.

13
Critical illness insurance

• Publication may be by way of a table or chart
  illustrating the ratio of male to female critical
  illness rates for insured risks in the United
  Kingdom or an appropriate region. The published
  data must illustrate recent differences in the
  incidence of critical illness by gender and by
  age. It may be based on graduated data using
  single year age points or raw data by age ranges
  not exceeding ten years for ages up to 30, five
  years up to age 80 and a single age range
  thereafter.
• The published data may aggregate different forms
  of critical illness insurance. It should be
  reviewed and, if necessary, updated at intervals
  not exceeding four years.

14
Income protection insurance

• Publication may be by way of a table or chart
  illustrating the ratio of male to female
  sickness, disability and unemployment for insured
  risks in the United Kingdom or an appropriate
  region. The published data must illustrate recent
  differences in the incidence and cost of claims
  by gender and by age. It may be based on
  graduated data using single year age points or
  raw data by age ranges not exceeding five years
  up to age 80 and a single age range thereafter.
• The published data may aggregate different forms
  of income protection insurance. It should be
  reviewed and, if necessary, updated at intervals
  not exceeding four years.

15
Motor insurance

• Publication may be by way of a table or chart
  illustrating the ratio of male to female average
  costs per policy. The data should be broken down
  by age ranges not exceeding five years, with a
  single age range for ages 80 and above.
• Data may aggregate all forms of cover and for all
  relevant motor vehicles. It should indicate the
  accident years reported. It should be reviewed
  and, if necessary, updated at intervals not
  exceeding three years.

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Private medical insurance

• Publication may be way of a table or chart
  illustrating the ratio of male to female average
  claims costs in 5 year age bands, with all short
  term (up to five years) medical insurance
  products combined.
• The published data should be reviewed and, if
  necessary, updated at intervals not exceeding
  three years.

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Other types of policies

• For other types of policy not covered by the
  categories above, and for new types of policy
  outside the categories above, publication may be
  by way of a table or chart illustrating the
  proportionate differences in risk between males
  and females. Where relevant, the data may reflect
  evidence from non-UK sources on which it is
  reasonable to rely.
• The published data should be reviewed and, if
  necessary, updated at intervals not exceeding two
  years.