The ECJ has now, of course, made its decision and the use of gender in insurance pricing is to be discontinued. In the demographic most affected — drivers aged below 35 — the short-run price effect will be an increase for women drivers and a smaller (and less certain) reduction for men. Overall, the average motor insurance premiums will either slightly increase or stay about the same.
With gender out of the way, one of the key characteristics that will determine motor premiums are the age or experience of the driver. However, the experience effect tends to plateau (eventually) and can even reverse with the most experienced (i.e. the most elderly) drivers sometimes found to be a high risk group. This is strongly implied by the graphic below based on Finnish data. And, if the reduced involvement as other parties in fatal collisions is taken to be an indicator of reduced driving activity then the per mile driven risk once you hit 65 is, relatively speaking, even higher than that implied by the blue line below).
Chart 1: Fatal motor accidents in Finland, 2002–2006
Source: CEA Road Safety Compendium (the underlying data are from the Finnish Motor Insurer’s Compendium and the Finnish Motor Vehicle Administration).
The data are clear and could well be used to drive pricing decisions — but the data are pretty clear with respect to (young) male versus (young) female drivers: the ECJ had no interest in or view on the data only on the principle of EU law being against discrimination. Will someone now seek to challenge the use of age as a differentiating factor? If so, and if that challenge was to be successful, then this would result in a further step away from rational and efficient insurance pricing.