Do we need to be more discriminating when it comes to gender discrimination?

Legal judgments involving insurance tend not bother the middle pages, let alone the front pages of the nation's tabloids, yet the European Court of Justice's recent decision to demand gender equality in the insurance market has triggered a veritable media storm. But what is it all about?

The Court has essentially said that charging different insurance fees according to the client’s sex amounts to discrimination—a breach of the fundamental human right to equality between men and women that is enjoyed by EU citizens.

Protecting fundamental rights doesn't sound too controversial, so why the media backlash?  Well, the Court's decision made clear that the principle applies even in situations where statistical data used by the insurance industry actually demonstrates a strong correlation between gender differences and increased risk.  So it seems that insurers will now be required to charge the same price to all their customers—thus punishing people who are statistically less likely to claim on the insurance.

Inevitably, lots of commentators have focused on the apparent absurdity of ruling.  Where is the gender equality, the accusations go, in increasing a young woman's car insurance premium to the level demanded from a boy racer?  Eurosceptics across the country are revelling in what they think is yet another example of the EU's tendency to shoot itself in the foot, demanding fairness while creating only unfairness.

But amidst this, one thing is still clear, and the Court nailed it in its judgment. The insurance industry's methodology is only using gender as a proxy for how likely it is that someone will, say, cause a car accident. So it will only ever give a pretty rough indication of risk, which ultimately (the Court said) has nothing to do with biological differences between men and women.

The reply seems alarmingly simple. Insurance companies have to use rough estimates of risk to decide the prices they offer customers.  How else do you go about calculating such things amongst large groups of people?  And if there is no other way of doing it, doesn't that mean that if women as a whole are less likely to cause accidents then they should benefit from lower premiums?

Here we reach the real nub of the argument. The point about using statistics hinges entirely on whether it is legitimate in the first place to group people in the way that the industry has—that is, according to gender. It sounds logical enough, but what if you alter the scenario slightly? Say one ethnic minority is, according to the actuaries, statistically more likely to cause an accident than another. Why not price premiums differently on that basis? Answer: because that is clearly discriminatory. So why the difference in opinion here?

At the bottom of it, this ruling says that equal treatment of men and women is as fundamental as those other equality rights that people already take for granted.  So has the EU shot itself in the foot?  The rightly discriminating observer says not.