Cheap pet insurance under threat by EU Gender Ban after Austrian test case


Four months after gender was banned as a factor in setting premiums for motor insurance, Post understands its remit could soon be extended to impact pet owners.

It is understood European decision makers are poised to broaden the scope of the Gender Directive - which has also impacted the setting of premiums in the life and annuities markets - to cover cats and dogs.

Historically, young women had been able to buy cheaper car insurance than young men because they are statistically less likely to have an accident.

Meanwhile, because they have a shorter life expectancy, men could previously buy cheaper life insurance and higher annuity rates.

This changed on the 21 December when the ban was introduced with fears young female drivers under the age of 25 would the most impacted group with premiums expected to rise by as much as 38% in some cases.

The origins of the widely reviled move was the Test Achats test case where the Belgian Consumer Association challenged Article 5(2) of the Gender Directive, which allowed member states to permit proportionate differences in individuals' premiums and benefits where the use of gender is a determining factor in the assessment of risk, based on relevant and accurate actuarial and statistical data.

This was ultimately referred to the European Court of Justice, where the legality of Article 5 (2) was considered non compatible with the EU fundamental rights.

Now another test case - this time emanating from Austria - could see pet insurance fall under the auspices of the Gender Directive. The Pelzartige Freunddecke test case has seen the largest Austria pet insurance company's  rating methodology challenged by a disgruntled policyholder.

Franz Musil took exception last year when he tried to insure a litter of labrador pups and was quoted cheaper premiums for male dogs than the female ones. He is now challenging this as a rating factor, in the local courts with the expectation it will end up at the European Court of Justice within 18 months to two years.

A spokesman for Pelzartige Freunddecke cited research from the University of Texas Health Science Center in San Antonio, which has found that as female dogs live longer they are likely to require more medical attention than their male counterparts, adding: "The sex of a dog, or for that matter, cat, is a valid rating factor in pet insurance. As far as we are aware animals fall outside the Gender Directive remit, and we will continue to fight our corner."

The UK pet insurers Post approached for comment, all conceded that they were aware of the Austrian case and that they were watching developments with interest.

One senior executive, who preferred to remain anonymous, said: "To be honest nothing surprises me with regards the lengths these European bureaucrats go into meddling with minor and trivial matters, when there are much more important issues to think about like the economic turmoil throughout the continent."

The Association of British Insurers pet committee is already planning its lobbying moves should the case reach the ECJ, having learnt from its mistakes previously when it failed to overturn the ban on motor, annuities and life insurance.

Click here for Catmap

Pre-empting the ban on gender as a factor in motor insurance, telematics was touted as a potential tool that could help reduce premiums for the groups most impacted.

Interestingly in a similar move aggregator Go Compare has added a new pet insurance product to its panel which it claims could revolutionise the pet insurance market and reduce premiums for some cat owners by up to 50%.

The new product, known as Cat Map, utilises similar technology to that used by ‘telematics' car insurance policies, where driver behaviour is monitored by sophisticated GPS transponders fitted to the car with the information uploaded in real-time to the insurer.

CatMap, which has been jointly developed by and American company Feline Technologies Incorporated, uses a micro-tracking device small enough to be attached to a cat's collar and powered by a tiny lithium battery, giving a working life of approximately nine years.

The whole unit is enclosed in a titanium ‘black-box recorder' type capsule designed to withstand a serious accident.

Ben Wilson, pet insurance expert from Go Compare, commented on the new product: "If you own a certain kind of cat this new policy could be a revelation both in terms of saving on your pet insurance premiums but also finding out what your cat gets up to.

"For too long owners of responsible, home-loving cats have been subsidising the insurance premiums of more reckless felines with lifestyles that really test the ‘nine lives' adage to the limit. ‘Telecatics' policies are much fairer for everyone.

"Although in its infancy for use in a pet insurance application, the technology for these new ‘telecatics' policies will certainly develop further. We listened to concerns about CatMap possibly being an invasion of the pet's privacy, but we decided on balance that the benefits of potentially lower premiums and knowing much more about your cat's activities far outweighed any downside. We believe owners will increasingly consider products like CatMap to help them bring down the cost of protecting their pet."

More to follow... 

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