Women and Insurance – A Trillion Dollar Opportunity

Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is from Henriette Kolb, head of the Gender Secretariat at the International Finance Corporation (IFC), a member of the World Bank Group.

As documented in the World Bank Group’s World Development Report in 2012, inheritance and property rights are often applied differently to men and women. Access to insurance can help protect assets, in particular for women, who tend to face more legal restrictions. However, women—and specifically those in emerging markets—are often underserved by the insurance industry, despite being valuable and profitable customers.

In an effort to better understand the impact of this reality, IFC, AXAGroup, and Accenture teamed up to find out what the insurance industry is losing by not focusing on the women’s market, what women themselves want from insurance products, and what could be done differently to reach women with services that are tailored to their individual, family, and business needs. The result is the She for Shield: Insure Women To Better Protect All report, which we launched today in Washington, DC.

One participant in the new study noted, “It’s not about the probability of something happening. It’s about me sleeping better at night knowing that my children and family are protected. Accidents happen all the time.” Or in the words of another respondent, “In case of divorce, the woman will at least maintain her insurance policy under her name, as opposed to losing them to her husband like she would lose a home.”

The She for Shield study, which is the first-of-its-kind, focuses on the women’s insurance market in ten emerging economies: Brazil, China, Colombia, India, Indonesia, Mexico, Morocco, Nigeria, Thailand, and Turkey. The conclusions of the report are based on economic modeling to forecast the market opportunity for insurers, extensive desk research, and in-depth interviews with industry representatives, brokers, agents, customers, regulators, and insurance associations in those ten markets. What we found was astounding:

Women on the rise—from billions to trillions: From a market of nearly $800 billion in 2013, the global women’s market premium contribution is expected to represent between $1.45 and $1.7 trillion by 2030. This growth is rooted in women gaining ground despite persistent economic gender gaps. Women’s increased level of education, income, improved socioeconomic status, and their greater need for protection make them a big—and largely untapped—opportunity for insurers.

A valuable client: Women’s attitudes toward fraud, claims, loyalty, their roles as a trusted source of recommendations, and their relational rather than transactional approach to networks make them not only a valuable customer but also an informal brand ambassador.

It’s not only about money: Women want protection and peace of mind not only for themselves, but also for their husbands, children, and parents. They do not want to be a burden in old age; they want short-term simplicity and long-term stability, advice, and support.

Women are more willing to pay for peace of mind: Across different demographic groups in China and Mexico for example, women indicated they were willing to spend ten to twenty percent of their income to protect against future risks, as compared to seven to ten percent that men in China and Mexico were willing to spend.

It’s all about life’s big moments: There are five to six tipping points during a woman’s life cycle, at which they make a significant amount of insurance related decisions: marriage, entering the workforce, buying a house/car, having children, divorce/widowhood, and retirement.

The birth of a saleswoman: Women in the insurance industry are a high performing sales force. Women tend to develop long-term client relationships, thereby improving client retention and possibly influencing the iterative uptake of insurance products with existing clients.

Empower women entrepreneurs: One-third of the world’s entrepreneurs are women who want to grow their businesses and take more calculated risks, but who face often-insurmountable obstacles to accessing finance. By helping women entrepreneurs manage their risks, insurance increases their ability to access credit and limit business interruptions.

One size doesn’t fit every woman: Women are not a homogeneous group, but a diverse market with needs that are dependent on their income, location, employment, and status. Different women face different constraints in accessing and using insurance.

Digital channels: Insurers should leverage digital distribution channels to increase awareness and communicate with women clients, not only for the young, but also for the time-poor. Given women’s roles as conduits and the value they place on peer-to-peer recommendations, their lack of time and desire to save it, insurers should leverage social networks.

Stronger together: Partnerships with governments, non-governmental organizations, women’s associations, and other private sector players can help expand access to insurance

for women. Key obstacles to insurance such as lack of awareness and information, affordability of products, and lack of financial decision-making power in some cultural contexts can only be addressed through holistic interventions. The insurance industry alone cannot solve the access problem but needs to be part of the solution.

So what to do next? Smart insurance firms should gather data on women’s insurance preferences and needs, develop targeted products, and improve distribution channels to better reach women customers. They should recruit more women into the insurance business, and in particular, into leadership positions. The IFC will work with insurance clients across the world to help them better serve the women’s market. It is now indisputable that lifting constraints on women’s productivity is vital to ending poverty and building inclusive economies.