Women empower global insurance industry

MANILA, Philippines - The global insurance industry is expected to earn up to $1.7 trillion from women alone by 2030, presenting a major new opportunity for sustainable and inclusive growth, a joint report said.

The report titled, “She for Shield: Insure Women to Better Protect All,” is a collaboration among the International Finance Corp. (IFC), the AXA Group, and Accenture.

IFC is the private investment arm of the World Group, AXA is a global insurance giant, and Accenture is one of the world’s leading professional services companies.

The insurance industry has largely overlooked women as a consumer segment – despite significant market growth potential, the report shows.

By effectively reaching out to women, the industry could significantly increase their economic participation, and further support social and economic development in emerging markets.

Exploring the impact of the women’s market on both the demand and supply of insurance, the report also highlights the contribution women can make as agents, marketing and sales leaders, and professionals who would expand coverage to clients in emerging markets.

IFC chief executive officer Jin-Yong Cai said that IFC believes women are a force for development – as consumers, employees, leaders, and entrepreneurs.

“We are confident that the findings of this report can help plant the seeds for a thriving, women-focused insurance market, enabling women to better protect themselves, their families, communities and societies.”

It shows how women’s increased income, improved socio-economic status, and greater need for protection create a significant opportunity for insurers.

It also describes how women’s preferences differ by country, income and lifecycle events, requiring insurers to tailor products and services.

AXA Group deputy chief executive officer Denis Duverne said that the rising share of women with tertiary education degrees, of women who work, who own or run businesses, of women who earn growing levels of income is leading to a changing and expanding landscape of protection needs.

“We are convinced that the findings outlined in the report will be a key building block towards more concrete initiatives to better cater to women’s evolving needs – serving half of humanity to better protect the whole,” Duverne said.

Inheritance and property rights are often applied differently to men and women, especially in the developing world, the landmark 2012 World Development Report noted. Insurance can help protect assets that women are able to accumulate.

She for Shield identifies two main drivers for growth. These are: improvements in women’s socioeconomic conditions, including increased participation in the workforce, enabling them to make spending decisions; and an increase in women’s willingness to invest in safety, protection, and security for themselves and their dependents, notably on insurance.

Despite persistent gender gaps, women globally earn and own more than ever: Their income is projected to increase globally from $9.8 trillion in 2007 to $15.6 trillion by 2017.

Women’s incomes are also expected to grow faster than men’s, and women are expected to control nearly 75 percent of discretionary spending worldwide by 2028, a 2013 Ernest & Young report found.

Women’s risk-awareness translates directly into a willingness to prioritize expenditures to achieve peace of mind. Across demographic segments in China, Mexico, and Nigeria, women indicated they were willing to spend 10-20 percent of their income to protect against future risks, whereas men would only allocate 7-10 percent for similar objectives.

Women, particularly working mothers, seek to include their parents, spouses, and children in their insurance policies. As clients, insurance companies value them because they are less likely to inflate insurance claims, and show stronger loyalty for their current insurance providers, the study finds.

Female entrepreneurs also represent a large and growing market.

Research suggests emerging markets comprise some eight million to 10 million small and medium enterprises (SMEs) with at least one female owner, generating substantial income and driving job creation.

But without customized insurance, women entrepreneurs may prefer to choose low-risk business strategies to reduce downside potential, restricting their growth potential as well, the report finds.

Insurance can provide the safety net that allows entrepreneurs to anticipate and optimize risk, redirecting efforts and funds towards growth and sustainability.

“By expanding the role of women in the salesforce with proper training and providing a structure that enables them to sell effectively, insurers can foster economic growth while helping improve the lives of women around the world, and at the same time open up new avenues for profitable growth,” Thomas Meyer, managing director in Accenture’s insurance practice, said.

As a next step, the report recommends gathering more and better data, including how to customize products, services, marketing, and distribution to better reach the women’s market; leveraging mobile technology; and creating innovative partnerships to educate consumers on insurance options.