BRIGHT Grey and Scottish Provident, the protection insurance businesses of Royal London Group, are continuing to benefit from the Gender Directive, new legislation that bars insurers from considering gender when calculating premium prices.
The Edinburgh-based providers, which sell products ranging from life to critical illness cover, announced a 23% increase in new business for the 12 months to December 31, amid a "flurry of bookings" taken in December as the deadline for the new rule approached. The rise valued new business premiums (PVNBP) across both companies at £482 million for the year, up from £393m in 2011.
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The Gender Directive, which came into force on December 21, ended the traditional practice of young women paying lower premiums for car insurance than young men due to lower risk, and women receiving lower annuity rates based on their higher life expectancy.
A breakdown of December sales figures from the two providers showed a notable rise of women buying life policies, with Scottish Provident seeing a 95% increase year on year, and Bright Grey reporting a 52% rise in new life policies for women on the same basis. Thursday, December 20 was said to have seen the greatest number of applications as consumers took action before the Gender Directive deadline to secure cover at lower costs. More broadly, the number of Bright Grey and Scottish Provident policies that started in December 2012 was up 27% and 25% respectively compared with the same period in 2011, while the number of life policies increased by 58% for Scottish Provident and 19% for Bright Grey.
A spokesman for Bright Grey and Scottish Provident said the Gender Directive had caused the price women pay for premiums to rise, but added that prices had also been driven up by a new tax regime for the protection industry, which, since January 1, has seen providers taxed on their profits. Previously, insurance companies were able to offset the cost of their life assurance business from profits made on their investments.
Roger Edwards, managing director of Bright Grey and Scottish Provident, said the rush brought by the Gender Directive had come after the businesses had laid "strong foundations" in a "very positive first half of the year". He added: "This year, we expect to see a lot of pricing activity in the market before things settle down."