The issue of gender remains an important one in discussions around inclusive insurance. Women are among the most in need of insurance and other financial protection measures, as they make up a large proportion of the informal labour sector in developing countries, often placing them in some of the most precarious financial situations. Despite this, there are many challenges blocking women’s access to microinsurance products.
Earlier in the year, we highlighted that many women lack financial independence and face cultural barriers to take control of their own financial security. We also showed the lack of financial education targeted at this group and that, even when women are informed about financial mechanisms to improve resilience, there are few insurance products designed specifically to meet their needs. And this can, in large part, be attributed to the lack of gender-disaggregated data being collected.
While the insurance industry has struggled to tackle these issues to date, it’s important to give them far greater emphasis. At this year’s International Conference on Inclusive Insurance (ICII), which took place in Ghana in October, these recurring themes were discussed, and participants shared some of the initiatives that are being implemented to tackle them.
Cultural barriers still prevail
As highlighted in our International Women’s Day article earlier this year, one of the key challenges women in developing countries face is culture. In many instances, they have less social and political capital, even within their own household which prevents them making financial decisions on their own. There can be a fear of retribution from their families or communities for taking decisions about their financial well-being alone. Additionally, there is often unconscious bias within the insurance industry itself. Marketing efforts are rarely tailored to women and often use complicated jargon that can be intimidating, particularly for those who are lacking financial education and awareness. This current approach creates a sense of fear and mistrust among women, preventing them from accessing products that could benefit them.
Several strategies have been identified to help tackle this problem. For example, using technology, such as unstructured supplementary service data (USSD) on phones, and promoting jargon-free communication in local languages to facilitate accessible and clear interactions. Additionally, the implementation of small, informal education groups tailored for low-income women can offer an alternative pathway to understanding insurance concepts. This approach also helps to build trust and empower women, who might have previously been shy or hesitant, to navigate the insurance landscape independently.
This has been the case in Fiji, for example, where the Cane Farmers’ Co-operative Savings and Loans Association (CCSLA) have given women more confidence to make financial decisions. The CCLSA is a grassroots community-based co-operative that offers value-based basic financial services on a lower scale to approximately over 5,000 member shareholders and customers. Losana Kumar, manager and project lead of the CCSLA, noticed that many of the female members of the cooperative faced misconstrued opinions (by spouses, partners or families) of their capabilities, restrictions on independent decision-making, a lack of knowledge and awareness of financial services and options, and financial constraints. However, providing education through the cooperative and creating an environment to build trust has enabled women to access inclusive insurance.
One size does not fit all
Another major hurdle for women to access insurance is that product development usually takes a one-size-fits-all approach which often fails to account for the specific needs of women. Not only are women more likely to work in the informal sector, which comes with its own unique challenges (particularly around consistency of income), but they also have health requirements that are often not considered when designing insurance products. During a workshop at the ICII, Yizaso Musonda, manager of market development for insurance at the Pensions and Insurance Authority in Zambia, highlighted this with a personal story. On a business trip, she fell ill and, though she had travel insurance, it wouldn't cover her medical expenses due to her pregnancy being considered a pre-existing condition. This left her with no choice but to pay out of pocket. This experience highlighted the existing gaps in insurance offerings for women.
Gender-based data collection is key
Many of these challenges could be addressed if there was better collection of gender-disaggregated data, yet unconscious bias across the industry has held this back to date. According to one of the parallel sessions at the ICII, many insurers currently perceive little value in collecting this type of information. And most of the data that is used has been sourced from the insurers themselves, so offers little insight into the actual needs of the users. This further emphasises the limitations and biases of the data that exists and that is used to develop inclusive insurance products.
Some of this can be attributed to the fact that high-profile roles within the insurance industry have traditionally been held by men, and these are the people who are making the more strategic decisions around product offerings. And, when demand-side data is included, it often skews the real picture and further perpetuates inequality. For example, men tend to be the primary purchasers of property and theft insurance, whereas accident and health insurance are equally sought after by both genders. It’s therefore crucial to understand the different needs of both genders in these contexts to develop products that best serve each user. Yizaso Musondo shared another anecdote to demonstrate this point. When on a trip in South Africa, she and a friend had a minor traffic accident. Fortunately, her friend had a motor insurance policy tailored for women. When they contacted the insurer, they were promptly guided to a safe location, where the insurer arranged for the car to be towed for claims processing. This shows the value of gender-specific insurance coverage.
To encourage the development of products tailored to women, it’s important to promote gender diversity across the insurance industry itself. This includes bringing more women into senior and decision-making levels of the business and implementing policies that mandate gender-based data collection. This can be done at both a company-level and a country level. Governments can also help further gender equality in the industry by fostering an enabling environment through regulation and advocating for equal representation. Incentivising insurance companies through tax credits and low requirements for gender-specific products can also significantly enhance coverage for women.
Ultimately, one of the main reasons to break down gender barriers and develop products that target women’s needs specifically, is because it makes good business sense. Women are generally considered low risk and, as a result, hold significant value as policy holders. On top of this, they represent a huge, largely untapped market that has the potential to raise more than USD 1tn by 2030. Additionally, tackling gender equality as a Sustainable Development Goal is one that links to many others. By addressing this challenge through inclusive insurance, we will begin to see the impact it has on supporting good health and wellbeing, eradicating poverty, reaching zero hunger and more.
While it might be inconvenient in the short-term to change the mindset of the insurance industry - and to overhaul the way it collects data and designs products - these efforts will, in the long run, likely be rewarded.