Women are a safer bet for insurers
This presents an opportunity for growth in a market that is generally risk-aware and driven by a desire for security and financial stability.
A 2015 IFC report, titled “She for shield: insure women to better protect all”, looked at the female market in 10 emerging economies: Brazil, China, Colombia, India, Indonesia, Mexico, Morocco, Nigeria, Thailand and Turkey.
In a projection to 2030, the report estimates that the global insurance industry will receive up to $1.7 trillion in premiums from women - half of that from the 10 economies.
Two of the main drivers for growth were improvements in women’s socio-economic conditions and more investment in their own safety, protection and security - as well as those of their dependants.
Notably, the study finds women’s risk-awareness translates into a willingness to prioritise expenditure for peace of mind.
It says that across demographic segments in China, Mexico and Nigeria, “women indicated they were willing to spend 10% to 20% of their income to protect against future risks, whereas men would only allocate 7% to 10% for similar objectives”.
The value of the women’s market in South Africa is not known, but companies such as 1st for Women have developed niche products geared towards women’s needs and preferences.
Casey Rousseau of 1st for Women Insurance says last month they took part in a World Bank Impact Insurance Academy panel discussion on the women’s market and opportunities for insurers.
“Women require a tailored insurance value proposition that responds to their gender-specific risks, needs and behaviours as individuals and business owners at different life stages, which differs from men,” Rousseau says.
“Women are the world’s most powerful consumers, and their impact on the economy is growing every year. They drive 70% to 80% of all consumer purchasing, through a combination of their buying power and influence.”
Women are also a lower insurance risk because they take fewer risks, make more careful decisions, usually stick to the speed limit and “frown upon road rage”.
In addition, the cost of repairs to vehicles crashed by women is, on average, lower than the cost of damage caused by men.
King Price spokesperson Wynand van Vuuren agrees, saying there are definite gender disparities.
“Women are an overall lower risk with vehicle insurance, specifically relating to accidents.”
Van Vuuren says women’s frequency of incidents is higher, but the damage caused is lower - incidents are mostly in parking lots, at low speed. Men might have a lower frequency, but they cause more calamitous damage and their claims are more expensive.
Precious Nduli, the head of technical marketing and Vitality Drive engagement at Discovery Insure, says although they haven’t tailored products for women, insurance companies use gender to determine premiums.
“This is because women are statistically safer drivers and are therefore less likely to claim. Women are therefore likely to pay lower insurance premiums than men, all else being equal.”
Nduli says Discovery Insure’s driving data from its telematics devices have shown women obtain a higher driver performance score and are thus better drivers (claims-wise) than men.
Katharine Liese, the head of marketing at 1Life, says while some of their products cover women and children specifically, they also focus on education.
“Our Truth About Money Initiative offers access to our financial education course, debt management services as well as estate and wills services at no charge. The platform strives to aid more, especially for women to take control of their finances and make more informed decisions that can change their lives to financial freedom.”
But life insurance gaps remain concerning. The Association for Savings and Investment South Africa (Asisa) says South African income earners are underinsured for death and disability by R28.8 trillion.
Asisa’s 2016 Gap Study (the latest findings of the three-year study will be released later this year) found that the families of the country’s 14 million income-earners face a combined insurance shortfall of R28.8 trillion if their breadwinners die or become disabled.
This amounts to an insurance gap of about R2.1 million for the average earner, which means many families would be forced to “drastically” cut living expenses if an earner died or became disabled. Those in higher-income brackets are the most critically underinsured.