During the final Expert Forum of 2019, Leapfrog’s Raimund Snyders posed the following question to insurance companies: “Do you actually get what it means to put the customer at the centre?”
Customer centricity isn’t a new idea, but it is increasingly important for insurance companies seeking to take advantage of emerging markets. The CGAP customer-centric guide makes this clear: “Customer-focused organisations gain competitive advantage over the long term by remaining agile and giving customers what they need. In return, customers remain loyal, actively use products and services, and provide referrals.”
As participants at last year's JMM learned, design thinking puts people at the centre by constantly trying to understand the users’ needs and behaviours - and this increasingly includes gender sensitivity. A recent article from the Swiss Re Institute noted that “insurers need to recognise gender differences in preferences, and understand what solutions to offer how and where…insurers can help more female consumers improve their understanding of the benefit of insurance and the specifics of risk protection products.”
“A good starting point would be to target insurance products at women in ways that resonate with their preferences and behaviours, and that reflect women's ever-expanding role in financial decision making around the world,” says Swiss Re’s Marianne Gilchrist. “By focusing on solutions to achieve gender parity, insurers and reinsurers can address a key driver of the widening protection gaps facing individuals, families and societies.”
For example, Madji Sock, Co-founder and President of the Women’s Investment Club in Senegal, told a conference in Luxembourg last year that the rise of mobile money in remote rural areas is helping women to access inclusive finance. However, significant barriers which can exclude women still remain and there are marked gender differences between men and women on smartphone ownership, financial literacy, having a bank or mobile money account. This, in turn, means women are less able access insurance which could mitigate risk.
In a joint report with GIZ and the IFC, Women’s World Banking (WWB) noted the clear business and social case for mainstreaming gender and targeting women in inclusive insurance. Women’s and men’s insurance needs are different, and tailored inclusive insurance for women can meet their gender-specific needs whilst still being commercially viable. Despite this, women-centric insurance - designed by women for women - remains the exception.
According to the ILO’s Impact Insurance Facility, the women’s insurance sector could be worth up to $1.7 trillion by 2030, with half that coming from emerging markets. Insurance can help women better protect themselves and their families and expand their businesses, but they have gender specific risks, needs, and behaviours. However, the gender work group at the 2019 JMM concluded that microfinance institutions tend to focus on women only as potential clients, rather than understanding their needs. Gender-sensitive product design could help convince women about the need for insurance, but in many markets where women make up a low percentage of the formal labour force, awareness of insurance is low, women don’t have financial independence, and tend to put the health needs of their husbands and children first.
Health is perhaps the most obvious area where gender-specific insurance products are essential. WWB are pioneers in developing health insurance products specifically for women, including a recently-announced new technology platform to accelerate scaling up of their leading health microinsurance product, ‘Caregiver’. It is hoped the new platform will enable simple, affordable cover providing life protection and a cash benefit after hospitalisation (including for maternal health), to massively scale up reach to uninsured and underinsured women in emerging markets.
“Decreasing the financial burden of catastrophic health expenditure problems, for example, in cases of hospitalisation and in-patient care, can help decrease gender disparity in health-care utilisation,” writes Nandita Saikia, a PhD Scholar at Jawaharlal Nehru University, New Delhi. “To reduce the gender gap in health care access and expenditure, there is a need to introduce gender-inclusive social health security and micro-insurance schemes in India.”
However, Daryl Collins, author of Portfolios of the Poor, says providing health microinsurance for women is probably the most difficult financial service to get right. “Women don’t know how long their health issue might go on for and what impact it will have on their lives,” said Collins during a 2019 Expert Forum. “Most women on the lower income spectrum are in the vulnerable space, because women will forego medical diagnoses or treatment compared to prioritising others in the household, especially children.”
Health is not the only area where insurers need to offer women-centric products. Climate risk insurance (CRI) could help them manage disasters and build resilience - a report from ActionAid finds women and girls are more vulnerable to the effects of climate change because they are more dependent for their food and income on the land, are less likely to be in positions of power or decision-making roles, and they are more responsible for securing water, food and fuel for cooking and heating. It is often women and girls, for example, who have to walk long distances to find water when local sources dry up.
According to InsuResilience Global Partnership, “gender-sensitive CRI acknowledges the gender differential vulnerabilities to climate change between men and women due to the dynamics of socially constructed behaviours, norms and relationships.” Gender-responsive CRI schemes can provide risk protection that addresses differences in women and men’s vulnerability to climate shocks and disaster-induced loss of wellbeing.
Dr. Helen Greatrex of the International Research Institute for Climate and Society at Columbia University believes that access to inclusive insurance is essential to realise the Sustainable Development Goals (SDGs). Financial inclusion, social inclusion and gender equality will only happen if insurance companies get serious about making a social impact. That means asking how customers can access products, how they can participate in product design and marketing, and how they can have their knowledge and values taken into account.