This is the third part of our feature series looking at women’s empowerment initiatives in insurance. Next week, Thursday, 30 September from 4-5pm CEST, we will be holding an Expert Forum on the topic – it will be exceptionally open to the public.
Women play a crucial role in economic development in emerging markets. According to UN Women, when more women work, economies grow. Women’s economic empowerment boosts productivity and increases economic diversification and income equality.
Yet still women face a host of obstacles which prevent them realising their economic potential. Women are less likely to participate in the formal workforce but are over-represented in informal economies. They are paid less, are less likely to be employed, have less access to social and employment protection, and are less likely to have a bank account. At the same time, they face greater risks, including health, poverty, and loss of income.
“Women face a variety of risks which are different to men’s, and which could be mitigated by insurance,” says Sarah Ebrahimi, an insurance and gender specialist at the International Finance Corporation (IFC). “For example, women are not a homogenous group and women’s risk profiles differ country-to-country and vary based on a women’s life stage. Women’s health risks, for example, are shaped by longer life expectancy, pregnancy, childbirth, and the tendency to delay care for herself in order to prioritise the needs of others. They are also more likely to be self-employed and to be in the informal economy, and they often do not have access to employer-sponsored insurance plans, have lower, more instable incomes, and own fewer assets because of lower education levels, inheritance laws, restrictions on land ownership, and divorce practices, which tend to favour men.”
Since the launch of the 2015 SheforShield Report, the IFC has supported a number of insurers to design women’s insurance programmes that develop and deliver insurance solutions aimed specifically at women in developing economies, while also sensitising insurers about the importance of a gender-aware salesforce through customised trainings. In April 2021, in an effort to optimise and accelerate insurance industry’s capacity to better serve women, the IFC partnered with the ILO’s Insurance Impact Facility to launch a global community of practice (CoP). The year-long initiative aims both to raise awareness about the insurance needs of women and to highlight the market opportunity for insurers if they target women as customers and employees. The CoP comprises 43 representatives from 21 organisations in 16 countries and will also encourage learning and knowledge-sharing.
“Insurance is critical for creating competitive, sustainable, inclusive and resilient economies,” says Ebrahimi, “but that won’t happen unless we actively target women as customers. Women around the globe are enjoying rising incomes and increased buying power, but they remain underserved by financial services. COVID-19 has shown us that gender sensitive approaches are even more important than before.”
According to a guidance noted developed by IFC, with the support of Women Entrepreneurs Finance Initiative, the pandemic has disproportionately increased the risk not only to women’s health but to their ability to earn a living and support their families economically. Women have experienced greater exposure to COVID-19 – because they comprise the majority of health and social sector workers – yet are less likely to have health insurance. The predominantly female workforce in the travel and hospitality industries have also been hit hard. And all that’s before you factor in complications from pregnancy and cuts to reproductive and female sexual health services. Women have also been more likely to drop out of the workforce during COVID-19 due to the closure of schools and daycare facilities, as well as to care for family members that are ill.
Even before the pandemic, according to the SME Finance Forum, women-owned small and medium enterprises (WSMEs) faced a US$1.5 trillion financing gap – and given they are less likely to have business interruption (BI) insurance, it’s not surprising that a survey found 38% feared they would be unable to pay their employees.
“Women tend to manage risks holistically – they want to know their families, homes, and businesses are protected,” adds Ebrahimi. “Regular insurance policies often don’t meet their needs, which change according to key life moments such as pregnancy. A one-size-fits-all policy is no good to them, especially if it was designed without women specifically in mind.”
The latest Landscape of Microinsurance – due to be published in October – underlines the gender protection gap in emerging economies. “Once again, as we saw in the 2020 Landscape, many insurers did not provide information on the proportion of female policyholders for their products,” says the MiN’s Knowledge Manager Mark Robertson. “This is a concern, as gender-focused tracking and interventions require this information as a first step. Furthermore, we noted that – on average – the median share of female policyholders per product has reduced since the 2020 Landscape – although direct comparisons are challenging due to slightly different data sets.”
The 2021 Landscape looks at this information in more detail, examining gender trends at product and regional levels. In this context, the session on Making insurance work for women at the upcoming International Conference on Inclusive Insurance (ICII) and the MiN Expert Forum on Women’s Economic Empowerment next week will provide fresh opportunities to explore solutions for gender-sensitive financial inclusion.
“Most insurers fail to see women as a key consumer segment and assume that since they are designing ‘genderless‘ products they are doing enough,” adds Ebrahimi, who will be facilitating the ICII session, “They neglect the fact that by 2030 women will represent a US$1.7 trillion opportunity for the insurance industry – with 50% of that growth in emerging economies. Post-pandemic, insurers need to get better at applying a gender lens and implementing solutions in a way that does not perpetuate the gender gap, especially with regard to digital distribution and customer service which have become the new normal.”
The IFC points out that insurers’ responses to COVID-19 have the potential to either increase or reduce public confidence in the industry. “Due to the key roles that women play in their households and communities, if insurers adopt a gender-sensitive approach, they can positively influence women’s perceptions of the industry, and increase women’s understanding and willingness to buy insurance products that improve the resilience of their families and their businesses.”
It’s not just down to insurers, though. As we reported in July’s Network Exchange, regulators have a key role in promoting and facilitating insurance products for women, and in breaking down legal barriers. According to the World Bank, “Discriminatory laws can affect women’s demand for financial services and impede their ability to save, borrow, pay, or insure themselves against risk. The B20 Special Initiative on Women Empowerment, which seeks to support the empowerment of women in the financial service sector, could also be significant, while donors and multilateral development agencies should focus on closing the gender gap not only within countries but between rich and poor nations. “The gender gap in financial inclusion actually differs a great deal between countries,” says Kyle Novist, a former policy analyst at the Centre for Global Development. “It varies from negative in a few – meaning more women than men have financial accounts – to as high as 30% in other countries where women lag far behind.”
It’s clear that – despite an increasing recognition of the need for women-specific inclusive insurance – much more needs to be done if the gender protection gap in emerging economies is to be closed. “Insurance can make a significant impact beyond women and their families,” says Ebrahimi. “It strengthens sustainable economic development around the world, and equally importantly, insurance for women protects gains made in many other development areas, such as poverty alleviation, employment generation, agricultural development, food security, health, and social protection.”