EU car insurance ruling could cost women Ј9k

They are poised to make it illegal to assess insurance premiums and pension payouts on the basis of a policyholder's sex.

Research shows this will make car insurance much more costly for young women, and cut retirement annuities for men by up to 8 per cent.

The Open Europe think-tank estimates insurance firms will have to raise £936m more capital to cover themselves against the 'uncertainty' caused by the ruling. Insurers say these costs will be passed on to customers.

Open Europe estimates that, on average, a 17-year-old woman driver will have to pay £4,300 more in premiums by the age of 26. In a worst-case scenario, the figure could hit £9,300.

Stephen Booth of Open Europe said: 'Giving EU judges free rein to rewrite laws that the UK government has signed up to in good faith can cause hugely damaging and unforeseen consequences.

'That these judges would magically rule that young women should pay more in the name of equality is simply perverse.

'Instead of making prices fairer between men and women, this ruling would increase costs for consumers taken as a whole.

'It is a perfect illustration of how giving ever greater powers to unaccountable EU judges does not only come with a democratic cost, but can also have massive economic costs for individual consumers and the wider UK economy.'

A 2004 EU directive allowed insurers to use gender-based prices as long as these were backed by statistics.

Young male drivers, for example, pay more for cover because they are more likely to be involved in accidents.

But last September Juliane Kokott, an advocate-general at the European Court of Justice, delivered the opinion that sex discrimination in underwriting was incompatible with EU law.

Tomorrow, judges at the court will pass their own verdict. They are not bound by the opinion of Dr Kobott, who is the chief legal adviser to the court, but fall in to line in 80% of cases.

The most dramatic impact of ensuring premiums cost roughly the same for both sexes will be in car insurance, according to the Open Europe study based on figures from the Association of British Insurers.

Female drivers under 26 would be the big losers, with some seeing premiums rise by 25% at renewal. The premiums paid by young men will fall by around 10%.

In middle age – where the sex of the driver is not considered an issue – the majority of premiums will be unchanged.

On annuities, analysts forecast that under a unisex rate, men would get 3 to 8% less income for their money, while women might get up to 6% more.

The latter have lost out so far because they live longer.

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