Less Discrimination, More Gender Inequality: The Case of The Italian Motor-Vehicle Insurance

Keywords: Discrimination, Gender, Insurance Market, Risk Classification


For years, insurance companies have been utilizing gender as a classification variable, typically in the insurance sector of motor-vehicle coverage. However, after the European Court of Justice decision “Test-Achats” (C-236/09, 1 March 2011), the practice of pricing insurance product on the basis of the sex of the insureds were no longer been allowed. The question addressed by this article is: what is the effect of such a ban on the market price? In this direction we analyze, on a legal point of view, the relevance of the concept of equal treatment affirmed in the so called “gender Directive” (2004/113/EC) and, on an economic point of view, the efficiency advantage of the use of risk classification by the insurance companies. Then using data of the Italian motor-vehicle insurance sector, we measure the influence on the premiums of the gender variable and others variables such as age, type of vehicle, geolocation, for the period 2011-2014. The finding is that, after the ban, the price of the insurance for male and female shows a higher difference. So finally we discuss these results in terms of a kind of inequality effect in the market, that may determine a situation contrary to that pursued by the ban.