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Increasing Women's Financial Protection


Expanding access to insurance for women entrepreneurs is key to improving their lives. © Maria Fleischmann / World Bank

Around the world, women are better educated and earn more than in the past. Their power to influence household spending is increasing. Yet, despite their growing clout, their ability to protect themselves from an array of financial risks remains low. They are more vulnerable to losing their income because of pregnancy, divorce or separation, and hurdles imposed by laws and society.

For insurance companies, these challenges present many opportunities.

A few years ago, IFC undertook a review of the state of the women’s insurance market in developing countries, leading to our 2015 groundbreaking SheforShield report. The study, conducted with AXA and Accenture, found that by 2030 insurance companies could earn up to $1.7 trillion—half of it in 10 emerging economies—by focusing their efforts on women.

We know from our experience working with banks that expanding access to finance for women entrepreneurs not only improves the lives of women but also boosts profits for banks. For example, under our Banking on Women program—where we work with financial institutions to increase access to finance for women entrepreneurs—our cumulative committed portfolio, as of March, has grown to a high of $1.4 billion, invested across 24 emerging markets. This shows banks are attracted to the program. We are now exploring the possibility of achieving similar impact in the insurance industry.

 

A Win-Win Situation for All

The insurance sector can design products that meet the needs of women across all income levels. With insurance, women may not be compelled to pull their children out of school during times of financial crises. With insurance, women will have the financial protection they need at critical moments in their lives such as divorce or hospitalization. By specifically targeting women, the insurance industry can help create markets where none existed before.

Moreover, if insurance companies were to hire more female agents, they would help create conditions for sustainable economic growth. Female agents will be better able to market insurance products to women, especially in regions where cultural barriers present a challenge for male agents. With increased financial protection and new jobs, more women will have disposable cash in hand. And cash in women’s hands has a beneficial impact: research shows that women reinvest up to 90 percent of their wages on household expenses such as children’s nutrition, health, and education.

Expanded financial protection for women will be a win-win situation for all—women, insurers, markets, and the communities in which the women live.

 

Follow the conversation: #InsureHERProtectALL

Published in April 2017