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Women’s Insurance Market Represents Trillion-Dollar Opportunity, Report Finds

September 16, 2015

© Mariana Ceratti / World Bank

WASHINGTON, September 16, 2015 — The insurance industry is expected to earn up to US$1.7 trillion from women alone by 2030, presenting a major new opportunity for sustainable and inclusive growth, a new report released today by IFC, a member of the World Group, finds.

She for Shield: Insure Women to Better Protect All was co-developed by IFC, AXAGroup, and Accenture. It presents a first-of-its-kind study of the women’s insurance market in the emerging economies of Brazil, China, Colombia, India, Indonesia, Mexico, Morocco, Nigeria, Thailand, and Turkey.

The insurance industry has largely overlooked women as a consumer segment—despite significant market growth potential, the study finds. By more 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 for 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.

"At IFC, we believe strongly in leveraging the opportunities that women present as a force for development—as consumers, employees, leaders, and entrepreneurs," said IFC CEO Jin-Yong Cai. "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."

The report is based on a series of in-depth interviews with industry representatives and associations, brokers, agents, customers, and regulators in the 10 markets, desk research, and econometric modeling.

It shows how women’s increased income, improved socioeconomic 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.

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.

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 in the 10 markets: 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 US$9.8 trillion in 2007 to US$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 EY 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 8 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.

"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," Denis Duverne, Deputy CEO of the AXA Group, said. "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."

"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.