The month of March is a time to not only recognise the progress that has been made towards gender equality, but also to reflect on what still needs to be done to achieve it fully. Whilst there is much to celebrate in terms of success globally, there are some concerning facts which show that we cannot be complacent if we are to continue supporting and empowering women, particularly when it comes to financial independence.
This has become more evident since the COVID-19 pandemic which, according to the UN, has set the timeline for closing the global gender gap back a generation. World Economic Forum figures show that it will now take 135.6 years to close the gender gap worldwide – an increase of 36 years – and more than 260 years to close the economic participation and opportunity gap. This is crucial for the insurance sector to tackle if it is to unlock the massive potential of this market which is predicted to bring in more than USD 1 trillion by 2030. But before this opportunity can be realised, there are several hurdles to overcome.
Many women globally - both in developed and developing countries – are still striving for financial independence, a crucial element of gender parity. As Mathilda Ström, Deputy CEO of Milvik AB BIMA explained during the Microinsurance Network’s Expert Forum on Developing digital insurance products that do not exclude low-income women, “until there is financial independence and digital inclusion amongst the mass market of women, it will be difficult to change materially the landscape.” But to achieve this, there are several barriers to overcome, including physical ones, particularly in low-income countries. For example, women are less likely to have ID documents or asset ownership than men, which often excludes them from traditional financial products, such as bank accounts and credit lines. They are also less likely to own mobile phones, so digital financial products are also out of reach. And for those living in rural regions, a lack of internet access creates a further barrier to access.
There are ways around this though. For example, agricultural insurance and technology provider, Pula, offers parametric crop insurance through yield and weather index insurance which covers farmers across Africa, South Asia and Central America against drought, floods, locusts, cyclones, diseases. One way Pula has been able to overcome challenges around mobile and internet access, is to provide a 'phygital' approach to raising awareness about their products which target women – through both digital channels (e.g., SMS) and physical channels (e.g., members of the community selling the product in-person). Since offering this approach in Zambia, they have seen a 24% increase in spontaneous awareness around insurance among women.
Affordability and access are also key challenges women face. In general, women are more likely to participate in the informal labour market, so are more likely to face financial precarity and often cannot afford standard insurance products. They are also more likely to take on the burden of unpaid labour, including housework and childcare, which reduces their opportunities to earn more. The pandemic has emphasised this precarity as many women were either unable to work or were forced to give up working to take on additional care duties. And even for those women who were employed formally, female-dominated sectors – for example, hospitality – were often the worst affected by COVID lockdowns. In the US, 75% of women say the crisis had a negative impact on how long they could live off their retirement savings which highlights how the pandemic has disproportionately affected women and their long-term financial independence.
From an access perspective, many women lack the financial knowledge – or, more often, confidence – to make money decisions. As a result, financial education that targets women, and builds confidence is important. There are several projects around the world that tackle this. For example, in Mexico, the Minerva Project provides online courses and digital teaching guides that help women strengthen their financial capabilities and make informed decisions. Within the first ten months of launching the project, 9,500 women had enrolled. In Bolivia, Banco FIE, provides financial education alongside offering financial products tailored to women and to date more than 110,000 women have benefited.
Women also face cultural barriers to achieving financial independence. In many parts of the developing world, they have less social and political capital, even within their own household, which makes gaining financial independence particularly hard. According to data collected by BIMA, in countries such as Bangladesh and Pakistan very few women are policyholders, partly because they have little control over money decisions. Despite a targeted communication strategy that spoke to the needs and concerns of women in these regions, those who were interested in insurance still had to discuss the decision with their husbands. Interestingly, although sales to women did not increase following this campaign, there was a 28% productivity uplift in general as men were interested in buying the products for their wives. Additionally, despite the low percentage of women BIMA policy owners, the percentage of doctor utilisation by women was comparatively high, and the proportion of accounts where the beneficiaries were women was also high. In Bangladesh whilst only 13% of active BIMA policies were held by women, 66% of beneficiaries were women. This shows that whilst women may not have financial decision-making power in these regions, they do have the power to influence their husbands into making financial decisions that benefit them. So, as Wangeci Mathenge of Inclusivity Solutions highlights, “with inclusive insurance you often have to work with what is actually happening.” This can mean appealing to men to support the financial wellbeing of their wives.
BIMA were able to make these observations because they had been collecting gender -disaggregated data. However, for much of the insurance sector this is not the case. According to the Microinsurance Network’s Landscape of Microinsurance 2021 report, for more than half of the products identified, providers did not have information on the proportion of women covered. This is a major barrier for companies to unlock opportunities within the women’s insurance market, because until they understand how women are accessing and using insurance – or how they are not – it will be almost impossible to develop products and services that cater to their specific needs. To truly understand the challenges women face, companies need to include them in the development of insurance products. As Katharine Pulvermacher, Executive Director of the Microinsurance Network explains, “the starting point has to be with the women themselves. Engaging with women can be done in many ways. You could ask women directly what their financial service needs are, try to understand their customer journey – the things that worry them...You can also harness technology through big data analysis that's available from network operators where transactions are taking place, [and assess] the value of those transactions.”
And on the supply side, insurance providers need to include more women in leadership positions and decision-making roles, to ensure the development of women-focused products are prioritised. Companies are taking steps in this direction. Generali, for example, have introduced two initiatives to support women’s career development within the company – the Lioness acceleration programme to support senior female managers to move up to leadership positions at the group level, and the Elevate programme which supports women managers. The Alliance for Financial Inclusion (AFI) in partnership with Women’s World Banking and Oxford University’s Saïd Business School have also developed a leadership and diversity programme for regulators which teaches senior officials from central banks and other regulatory agencies in emerging markets skills to create an enabling environment for women’s financial inclusion. More broadly, initiatives such as the B20 Women Empowerment Taskforce are bringing the issue of gender balance in leadership to the global level and recommends that countries need to focus on: including women within the workforce, reimagining our current social and cultural expectation, and understanding the potential economic growth that including women can bring.
Ultimately, the challenges that women face when it comes to financial inclusion and independence will not go away, and could even worsen, unless proactive steps are taken to close the gender gap. However, given the size of the market insurance companies should not consider it an imposition to have to develop inclusive insurance products. If anything, it makes good business sense and for companies who are willing to invest in making this change, the rewards are likely to be great.