Sex Bomb Setting the Gender Directive record straight for protection A subject title that isn't intended to result in a deluge of underwear…
As G-day nears, we can expect Gender to become an everyday conversation point for dentists. The Gender Directive will have a massive impact on insurance cost, drawing inspiration from one of the most famous Welshmen, I'd like to set the record straight on several Gender Directive 'sex bombs'.
The Gender Directive is set to land on 21 December 2012.
Bomb 1 - It may be daft, but it's going to happen. We've got to get on with it.
A colleague makes a compelling and entertaining case for 'discrimination' by gender when assessing insurance risk. The fact is that females live longer than males, and so represent a different risk. We are different, even down to the cellular level (women have the Y chromosome… an extra bit!). In fact, with one exception, for every species on our beloved planet Earth females live longer than males. He's also got a great story about experimenting with beer and monkeys… However, the EU has seen it fit to adopt a different view. The Gender Directive comes in play on 21 December 2012. This has been gathering pace for some time now, but as ever, the devil is in the detail.
There is virtually no chance that it will be derailed, delayed or changed. From G-day, insurers will no longer be able to offer gender specific rates for many classes of protection.
Bomb 2 - Insurance will become more expensive (for most).
The table below gives you a flavour of how prices might change post G-day - due to the gender effect. It comes with caveats. It's not an exact science and will vary by provider and there are variations even within classes of business, but hopefully it serves as a useful rule of thumb.
The Gender effect: how prices might change post G-day
Income Protection +25% -30% Critical Illness -5% +10% Term -10% +20%
However, one other slab of legislation is set to drop from 31 December 2012 (effectively at the same time) and it's likely to wipe out most of the positive Gender pricing effects.
Even with the gender movements, we can expect to see life and critical illness rates increase overall, and some reckon by 10-15%.
Bomb 3 - Transitional arrangements. Forget it; there'll be a hard stop on 21 December.
The usual industry approach is to offer transitional arrangements for applications already being processed. We often see this as part of standard re-pricing and we enjoyed an extended period in the wake of pension term withdrawal several years back. This won't apply on G-day. There are no provisions for applications being processed or transitional arrangements within the EU law. Any cases that are not completed' by midnight on 20 December will need to be switched to gender neutral rates. A myriad of options face providers on how to manage applications in the run up to 21 December. The solution will be in the clients hands; don't wait until December to submit your applications..
Bomb 4 - We're doomed…
The UK is vastly under insured and financial advisers play a pivotal role in ensuring the financial security of clients. Whether they 'want' it or not, many dentists 'need' protection. For most, the price for protection will increase. There's 'never a better time to buy protection.
Not wishing to play the 'poor me' card, but providers have several massive chunks of legislation and regulation to contend with in the run up to another huge change within Financial Services which is RDR which commences at the end of 2012, so to avoid paying G-day prices, don't delay!