Women drivers face 30% rise

FEMALE car drivers could see the cost of insurance soar by up to 30% under EU proposals, experts have warned. The Financial Services Authority (FSA), has added its voice to fears that the directive from Europe will change the face of insurance, making it far more expensive and less competitive.

Under the 'gender equality' plans, insurers would no longer be able to take gender into account when calculating the cost of premiums.

Typically women pay less for cover than men because they are seen as safer drivers, who are less likely to have an accident. People taking out an annuity with their pension fund or life insurance, where the premium is based partly on gender, could also be affected.

FSA chairman Callum McCarthy believes the proposals would hit policyholders hard, by forcing insurers to put up premiums for many types of insurance, by removing the one of the key factors of assessing risk.

'Under the proposals, in future it would not be possible for insurance firms to differentiate by price between men and women. This will in particular affect annuities, life insurance, income protection insurance and motor insurance. The effects will be, in all cases, to require insurers to depart from realistic assessment of risk – a principle which runs counter to good sense.'

Figures published by the FSA show premiums for female car drivers could rise by an estimated 10% to 30% if the proposals became law.