‘Equality wins over fairness’ in European Court Insurance Decisions – AA Insurance

AA Insurance is very disappointed with the decision by the European Court of Justice today that the Irish insurance industry can no longer use gender as a risk factor when calculating premiums.

However the AA is pleased that the ruling will not take effect until 21st December 2012, which allows insurance companies a period of time to develop alternative mechanisms for measuring risk. This at least means that there should not be an immediate increase in motor insurance costs generally, which would have happened had the ruling taken immediate effect.

Do you think this ruling is fair? Click here to take part in our instant poll

John Farrell, Director of AA Insurance, says: 

“The use of gender in calculating insurance risk has been a fundamental principle of Ireland’s risk-based motor insurance structure for decades.

“The Court has now agreed with EU Advocate General Juliane Kokott’s view that the opt-out enjoyed by Ireland and some other countries is not compatible with the principles of equality guaranteed in European legislation.

“However, there is a fundamental difference between equality and fairness.  The calculation of car insurance premiums based on risk is by definition fair, but is incompatible with gender equality,” he says.

“Young women crash their cars far less often than young men, a fact that is beyond dispute. This has been the basis for lower insurance premiums for females. 

“This is a bad day not just for Ireland’s female drivers but for all motorists. We will see premiums rise across the board as insurers struggle to find new ways of pricing accurately based on risk. In the long run insurers will be compelled to systematically overcharge all women, especially young women, in order to subsidise the under-charging of young men.”

“Young women have until now paid car insurance premiums that are typically up to 50% cheaper than men.  In the short term, they will see their premiums rise significantly while those for young men are likely to fall a little.” 

The transition period until 21st December 2012, giving the industry time to revise its rating structure.  This should minimise the risk of sharp premium increases, especially for young women.

Mr Farrell believes that insurers will quickly start to adjust their pricing in a way that puts greater emphasis on the individual risk presented by motorists and that premiums will start to settle down.

“This is a very competitive market,” Mr Farrell points out. “We are likely to find that the initial increase will start to be eroded as insurers begin to develop a more sophisticated response to the loss of gender for rating purposes.

“But following the Court’s judgement, I fear that many insurers will find the young driver market too risky and pull out altogether.  That would reduce competition, leading to higher prices.”

“It’s vital that the industry, road safety organisations, the education sector and the government focus on helping young people start their driving careers safely and responsibly which, in turn, will help to make car insurance more affordable.”


The issue came to the attention of the European Court of Justice in 2009 after Test Achets (the Belgian consumer association) launched a legal challenge in 2008, questioning Belgium’s implementation of the 2004 Gender Directive.  The Court argued that the opt-out of the Gender Directive, enjoyed by Ireland and some other countries, was not compatible with the principles of equality guaranteed in European legislation.  In September 2010, Advocate General Kokott issued an opinion in favour of this challenge.  Today’s ruling makes the use of gender as a risk factor in insurance illegal. 



  1. Motor insurance in Ireland is a rip off and this ruling will just be used as a smoke screen to raise premiums again.
    Insurance companies are in business to make profit and create dividends for share holders. That business model contributes to high prices for compulsory premiums.
    There is not enough competition in the market in Ireland.
    The basic compulsory premium should be applied to the vehicle and all qualified drivers should be covered to drive that vehicle.
    Basic compulsory premium should be a flat rate.
    Premiums for basic compulsory cover should be collected by the government, profits from which should be used to fund rehab facilities etc to care for victims of road trauma.

  2. I did a quick check to see what my premium is versus my girlfriends. I have more experience than her on the road (3 years 8 months) to her 10 months and I have never had a claim or points. We are both the same age and she is 3 months older (22) my quote with all the same info as her was 1450 and hers was 380.

    Her brother is 32 and has many points on his licence on a provisional and he has been done for no tax and insurance and he pays less than me.

    The first one is my complaint. I will quickly raise a point that you cant judge on race or country of origin and that is fair because people deserve to be treated equally and given a fair chance (even though they dont often drive on the other side of the road as us and have different road rules and questionable testing) It is absolutely ridicules to judge on gender and goes against many equality laws in other sectors.

    You guys are milking the young males of this country as far as I am concerned and its about time this stopped. You should really remove this sexist article because morally you guys are completely wrong and no one will agree with your rhetoric anyway.

    Insurance is always about subsidizing people. It’s about a community pooling its resources so when an individual is in trouble the whole community has a way of helping them out.

    Also I have found in many cases when I was younger and I knew people who crashed my age, even if it wasn’t there fault, the prejudice that is there led to them being blamed in 50/50 cases and it was quiet frustrating. This goes some of the way towards mending this.

    I DO believe young males cause more crashes and im not delusional to that but regardless its not fair in a society that aims for equality AND FAIRNESS

Comments are closed.