A leaked European Directive proposal indicates that women drivers may start to pay higher premiums, reports datamonitor the premium business information company.

The proposed EU legislation banning sex discrimination could force insurers to adopt a single pricing policy for car insurance, meaning that women will have to pay higher premiums.

The implications are that factors such as age and postcode could also be seen as discriminatory in the pricing process, leaving insurers in a difficult situation, says datamonitor.

The European Commission's proposed directive to introduce a single pricing policy for car insurance regardless of gender is at an early stage and could take at least two years to implement. However, European insurers are already worried about the implications of such a move after copies of a draft proposal have been leaked.

This document suggests that insurers would no longer be allowed to take gender into consideration when pricing products. In a market like motor insurance, where gender plays a significant role in determining premiums, this is likely to result in large increases in the premiums paid by women.

Traditionally women have benefited from cheaper premiums than their male counterparts as they cost insurers less in claims costs. As women are generally more cautious drivers, when they are involved in accidents the resultant claims costs tend to be lower, as the accidents are less catastrophic. Insurers have passed this on to women in the form of cheaper premiums.

The new directive could affect insurers' ability to take other discriminating factors into account when pricing, thus leaving insurers in a very difficult situation. An AA representative said the key issue was whether or not using gender as part of the pricing process was seen as discrimination under the directive's wording.

If basing insurance premiums on gender is seen as discriminatory, then this argument could also be applied to other areas such as age, occupation and postcode. The problem is that insurers use these category boundaries as a foundation when giving a quote, if they are removed what can insurers then base their decision on? The likely outcome will be that everyone will have to pay higher premiums in order to compensate for those drivers that make expensive claims.

AA research shows that for a standard Ford Focus, women are consistently seen as better risks on the road than men until they reach the age of 55 but for the next 20 years, their premiums are slightly more than men’s, then at 75, women are back in the driving seat for cheaper cover.