Past claims, not gender, are the cause of the differentiated premiums. In 2012, the European Court of Justice issued a gender directive, prohibiting insurance companies from using gender as a risk ranking factor when applying for an insurance policy.

According to Petrie Marx, an actuary at Sanlam, gender is still an important factor to take into account when determining premiums for an insurance policy in South Africa, especially for life covers. This criterion has particularly favoured women. Because of their longer life expectancy compared to men, South African women still pay lower premiums for life insurance.

“Insurance companies are not allowed to discriminate unfairly between genders or according to any criteria for that matter,” Marx said. “All distinctions made between clients must be actuarially justified, meaning that it must be justified by actuarial evidence. Therefore, it is rather a statistical evidence and not unfair discrimination or bias.”

Women may have a better advantage when applying for life insurance but not in other benefits. “One such an example is income protection at disability, where female claims experience is high, and hence premiums have traditionally been higher. On certain severe illness products, female rates can also be higher than those of males mainly due to higher cancer incidence,” said Marx.

Marx emphasised that even though gender is important, it is not the most important factor in determining premiums. “The main determining factor of premium rates is actual past claims experience,” he said. “Differentiated premiums are therefore the result of past claims that are either higher or lower on those benefits.”

What other factors affect your premiums? “If one wants to get technical age is still the most important of all,” Marx said. “After smoking, build as measured by body mass index is also an important factor that is increasingly used. Education level is another rating factor that is commonly used and that statistically is probably the more important than gender. Your past medical history, as assessed in the underwriting process, is also a major factor that will influence the final price of an insurance policy.”