A simple fact that the insurance industry should be alive to is that women are central to increasing the market growth of insurance products and services in both local and global markets, as they still have considerably less financial protection than men.
Tangible evidence that women are the key to unlocking the next level in insurance market expansion across global markets does indeed exist. According to the She for Shield report, published by the International Finance Corporation (IFC), Axa and Accenture as far back as 2015, it is estimated that by 2030 the global market for insurance for women could be $1.45-1.7 billion (R26-30 billion at today’s exchange rage).
The same report also found that in emerging markets the potential growth for insurance remains exponential, with estimates that the overall market could grow to between $570- $890 billion (R10.2-R16 trillion) – a staggering figure by any account.
At the same time, research conducted by the IFC reveals that even low to middle income women are prepared to spend 10-15% of their monthly incomes on insurance, which is consistent with the experience in microcredit and suggests that women are more risk-aware and default less often than men.
Realistic goal
Considering these findings, the IFC claims that it is indeed a realistic and achievable goal to increase the market size of insurance for women. The organisation concludes that if this is done successfully, there would also be important secondary benefits, including that women would be able to up their economic participation, children whose parents are insured could continue their education despite natural disasters or accidents and that women could find more employment opportunities in the insurance industry.
However, despite this obvious potential for the insurance industry, there has yet been little evidence of the largescale adoption of a planned and deliberate approach to boost women’s uptake of insurance products and services. Arguably, this is partly due to the specific circumstances that many women find themselves in, with insurance policies often being provided and subsidised by employers and thus not tailored to the specific needs of women.
Yet, it is abundantly clear that a range of solutions – on both the supply and demand side – are needed to enable women to take better advantage of risk management mechanisms, including business insurance products targeted at women-led enterprises.
On this note, the World Bank has previously published data that shows that women entrepreneurs represent a large and growing market, with emerging markets comprising about eight million to 10 million small and medium enterprises (SMEs) that have at least one female owner and generate substantial income and drive job creation.
Insufficient understanding
Unfortunately, the current choice of insurance products available to these entrepreneurs does not have a sufficient understanding of their specific risk and protection needs and – unsurprisingly – this one-size-fits-all approach makes insurance products unattractive to this segment.
It is thus incumbent on insurance industry players to recognise that women have different needs to men, many of which are not met by standard policies available in the market today. Furthermore, insurance providers need to have an accurate picture and understanding of the gender demographics of their clients, especially across different product lines.
What is extremely important is that insurance providers take a strategic approach to marketing their products to women customers, which must include putting in place incentives specifically tailored for women, as well as definite targets designed to drive the growth of a female customer base.
At the same time, it is also key to acknowledge that women must play a central role as a distribution force in order to better reach female customers, as well as leaders within the insurance companies that provide essential insights into the lives and needs of women.
It is only by adopting a targeted approach to better serve women as customers and employees, that insurance providers will be able to differentiate themselves and become the insurer and/or employer of choice for women in their respective markets.
Leverage women’s role
Insurers must leverage women’s role as influencers to increase their communities’ knowledge and use of insurance, while at the same time enhancing the market’s overall trust level in insurance products and services. Forming key partnerships with other stakeholders, such as governments, schools, hospitals, non-profit organisations and religious institution, can go a long way to help educate consumers about risks and the need for protection.
Female representation in Professional membership
The challenges of female representation can also be noted in the demographics of the Insurance Institute of South Africa membership base. On lower membership levels such as the Student category(52%), General (63%) members and Licentiate(63%) members there is higher female representation. However, on the higher membership level ie Associate (48) and the highest level ie Fellow (42%), the female representation is lower than males. Being a professional member accredited by IISA denotes a high level of expertise and accomplishment in the profession, it also indicates ones commitment to continuing professional development.
Professionals that eligible for professional membership include those in sales/advisory roles, underwriting, claims, risk management, compliance or legal, auditing, actuarial, accounting, reinsurance management, just to mention a few.
Let’s change the demographics ... become a professional member today!
Contact us at tumisang@iisa.co.za.
Thokozile Mahlangu
Chief Executive Officer
Insurance Institute of South Africa