Quantification of the Impact of a Ban on the Use of Gender in Life Insurance

The paper explains the impact of insurance regulation to the pricing after ban of using sex life tables. On 1st March 2011, the Court of Justice decided that it is not possible for pricing to use lifetables based on sex differentiation. There would be a contradiction with the Directive 2004/113/ES that sets a principle of equal treatment between men and women in the access to and supply of goods and services. This conclusion forced the insurers all over the Europe to create new prices and made an information asymmetry in favour of the clients. According to the theory, the market participants’ behaviour in imperfect information leads to a creation of a new market equilibrium. In practice, it results into the product designs adjustments. The impact of regulation into the fi nal price of insurance is quantified on the case of European insurers group. The other impact is the change in the structure of the insurance class in terms of representation of men and women in the new business.