Three Cheers for UK Women Drivers, Shame on EU

My life fades, my vision dims. All that remains are memories. I remember a time of chaos, ruined dreams; this wasted land. Most of all, I remember the man we called Max, the Road Warrior. To understand who he was we have to go back to the other time...

While I am generally among the most pro-Europe of IPE commentators, I must admit that my patience is being tried here. While I usually roll my eyes at notions that supranational EU institutions are replacing UK policymaking efficacy--an idea so beloved by Euroskeptics--I may grudgingly make an exception here. Do I contradict myself? Very well then I contradict myself (I am large, I contain multitudes).

In essence, insurance premiums for female drivers in the UK--especially younger women--were lower because they are more careful when driving as opposed to shambolic displays of carmaggedon or carpocalypse now-style vehicular displays young males tend to exhibit. Too much Top Gear, methinks. Having been a driver in that age range, I regrettably understand all too well. However, the European Court of Justice has now ruled against the use of gender in determining insurance premiums, in effect ordering insurance firms to charge the same (read: higher) amount male drivers are usually asked to pay. Not very progressive, I believe:

Young women drivers buying car insurance and any man considering retirement will get a worse deal from the end of next year, following a ruling prohibiting the use of gender in insurance underwriting. The ruling, by the European Court of justice, means insurers will no longer be able to use sex as a factor to determine whether someone represents a bigger risk in insurance terms, even though historical evidence shows that being male or female has a bearing on frequency and size of claims.

Maggie Craig, acting director general for the Association of British Insurers, said: "This gender ban is disappointing news for UK consumers and something the UK insurance industry has fought against for the last decade. The judgment ignores the fact that taking a person's gender into account, where relevant to the risk, enables men and women alike to get a more accurate price for their insurance..."

Insurers have until now charged young men significantly more to reflect the fact they are more likely to have serious accidents: a male driver under 21 is twice as likely to have an accident than a woman under 21. But the insurance industry will now have to rip up its current pricing model, and young men under the age of 25 are now likely to see premiums decrease by an average of 10%, and in some cases 25%.

Adrian Webb of [online insurer] esure said the prohibitively high cost of car insurance for young men has previously helped discourage them from buying high performance vehicles, thus reducing the risk to themselves and others. "If young men's premiums are artificially reduced, this could lead to more opting to choose more powerful vehicles," he said. "It is particularly alarming given that the head of the Association of Police Officers in the UK in 2005 noted that the biggest killer of young women in Britain is their boyfriend's and male friends' driving" [!!!--and you thought the Road Warrior references were over the top.]

At the same time, car insurance premiums for women under the age of 25 are expected to rise by an average of 25% by the end of 2012, but by up to 60% for the youngest drivers, which could translate into an extra £500-£1,000 a year for some. Biba, the British Insurance Brokers' Association, said: "Effectively, females will now pay a cross-subsidy for males on their insurance premiums." The AA warned that many insurers will find the young driver market "too risky" and pull out altogether, thereby reducing competition and pushing up prices...

In my humble opinion, this misdirect attempt at political correctness violates principles of good social science: why would you choose to do away with a significant predictor variable in gender? It's mind boggling, to say the least, to penalize women for not driving like, well, a drunk Mel Gibson. Ah, the foibles of the European Union. It's great, but sometimes quite absurd as well. Perhaps the two go together in the mystery called European integration.

And the Road Warrior? That was the last we ever saw of him. He lives now only in my memories.