EU Gender Directive

Men and women of the same age are often charged different premiums for identical insurance contracts or offered different benefits under identical pension plans. The reasons for this are related to the likelihood of a man and a woman making a claim being different and the fact that the average lifespan of men and women are expected to be different.

The Sex Discrimination (Amendment of Legislation) Regulations 2008 specify the circumstances in which insurance companies can charge different premiums or offer different benefits to men and women under individual insurance and pension contracts.

In particular, the Regulations permit insurance companies to charge different premiums provided that data relevant to the use of gender as a risk factor is compiled, published and regularly updated in accordance with guidance issued by the Treasury. The latest Treasury guidance was published on 7 March 2008 and governs insurance contracts which commenced on or after 6 April 2008.

Scottish Widows is therefore obliged by law to share with you data which justifies why we differentiate between males and females. The data we share with you will vary according to the type of contract you are interested in:

It is not possible to draw conclusions from the information in these tables about an individual customer’s premium or annuity rates for a number of reasons, eg:

In some cases the data we have published represents an industry average (i.e. for life cover and annuities) whereas we are allowed to use our own data in setting our premium and annuity rates.
There are other factors that are taken into account in calculating premium rates, such as expenses and investment returns which do not vary by gender.

Indeed the Treasury’s guidance states: "This data must demonstrate the case for differing treatment based on gender, but it is highly unlikely to present a direct correlation with the premiums charged or the benefits obtained in individual cases."

It is also important to note that premiums will depend on differentials by age throughout the term of the policy, not just the age at the start.

The data for Life Cover & Annuities and Income Protection is supplied by the Continuous Mortality Investigation, which carries out research into mortality and morbidity experience on behalf of the UK Actuarial Profession. This research covers people who have long term insurance policies issued by life insurance companies in the United Kingdom and the Republic of Ireland. These investigations cover all the main types of life cover, annuitant, pensioner and income protection insurance contracts offered by the market. The base data is supplied by life insurance companies covering a large proportion of the market.

The data for Critical Illness is based on an analysis of the incidence of critical illnesses and deaths in the population of England during the year 1993. The data has subsequently been adjusted by us to reflect the differences between the population upon which the analysis is based and the population of insured lives who have taken out policies with Scottish Widows.

The table below shows the ratio of male to female critical illness rates based on an analysis of the incidence of critical illnesses and deaths in the population of England during the year 1993.

Critical Illness Cover

Age band	Ratio of male to female critical illness rate
21–30	130%
31–35	102%
36–40	104%
41–45	113%
46–50	119%
51–55	131%
56–60	141%
61–65	147%
66–70	160%

Important notes:

This table demonstrates a difference in male and female critical illness experience: females are less likely to claim under their policy than males in each of the age bands shown. This will normally mean that women are charged lower premiums for critical illness cover than men of the same age.
The data shown in the table are based on policies where the benefit is paid on either death or earlier critical illness. Different figures may apply for policies where the benefit is only paid on survival of a specified period after the diagnosis of a specified critical illness