Unleashing the potential of women’s buying power in insurance

As South African women embrace their expanding roles as business owners and breadwinners, it is important for insurance companies to adjust their business practices to adapt to their specific needs, suggests Petunia Makgoro Executive Head: Partnerships for Hollard Life Solutions.

22 August 2023: Insurance – South African insurance companies can better support women looking to purchase insurance policies by developing products specifically tailored to their needs, ensuring accessibility, flexibility, supportive customer care, and competitive pricing.

While both men and women buy insurance products, there is a significant difference between the genders. According to findings from the Association for Saving and Investments South Africa (ASISA)’s 2022 Gap Study, out of the 14.3 million income-earning population, 58% were male and 42% were female.

This shows a prevailing male dominance in the insurance sector, and it underscores the pressing need for change to promote gender equality in insurance buying trends.

To drive growth in the female market segment, insurance companies should recognise that women – as consumers – approach insurance products and make choices differently from men. While men tend to be transaction-oriented, women are more relationship-oriented.

According to research conducted by reinsurance giant Swiss Re, women’s purchasing patterns were found to be “more altruistic, reciprocal, and cooperative than men.” In addition, women display a higher level of loss aversion and are less confident when making insurance-related decisions. Understanding these distinctions can help insurers tailor their strategies to better meet the needs and preferences of female consumers and bridge any gaps that may exist in the market.
Furthermore, women have distinct behavioural preferences that shape their individuality and consumer behaviour, and these preferences have a significant impact on their insurance purchasing decisions.
It’s important for insurance companies to tailor their solutions to align with these preferences. It’s not just about presenting different benefits and exclusions, but also about crafting the distribution of products in a way that resonates with female buyers.

While women business owners need to insure for the same risks that men do, their caregiving roles tend to see them allocate more resources to health insurance and coverage for their families. They are less likely to prioritise life insurance, they often prefer safer investment options, and are less likely to save for retirement compared with men.

For example, in South Africa, many women have chosen to invest in funeral cover, extending its protection not only to themselves but also to their immediate and extended family members. Remarkably, approximately 60% of people purchasing funeral are women.

While there is an increase in insurance coverage for disability and dread diseases bought by women, their focus is generally on the here and now rather than on long-term coverage. Within this context, there is an opportunity for insurance companies to adopt a more creative approach to making their products more easily accessible to women. When a broker or agent reaches out to a woman, she may not have the luxury of time to thoroughly review multiple product offerings, consider various benefits, or update her information. Therefore, there is a need to find ways to streamline the process.

Making products accessible

The Swiss Re research found that women are generally receptive to recommendations from family, friends, and neighbours, which significantly impacts their decision-making process. We generally value the experiences shared by those we trust, as it helps shape the decisions we make.

More than that, women tend to have a strong inclination toward brands that promote sustainability, charity, and social and environmental responsibility. The Swiss Re research noted that women want to be able to associate themselves and the things that they buy with the brands they feel do good.

When it comes to short-term insurance, for instance, women choose car insurance that answers their need to be safe on the road and that offers benefits that enhance a sense of security and promises to help them in emergencies. Men, on the other hand, tend to primarily base their car insurance decisions on the extent of the coverage and its cost.

When considering an insurance policy, there are several crucial factors specific to women that should be taken into account. Firstly, research shows that women have a longer life expectancy than men, which necessitates careful attention to post-retirement financial planning. Secondly, their salaries may fluctuate during maternity leave, highlighting the need for meticulous financial planning to accommodate such life changes.

A critical aspect that should not be overlooked is ensuring adequate coverage in case of disability or the onset of a serious illness. As breadwinners, women often support multiple loved ones within their extended family, so sufficient coverage is vital. These considerations carry significant weight, not only in terms of benefiting from insurance but also in effectively managing premium payments.

Insurance companies are well placed to highlight the importance of coverage that women may not focus on, such as saving for retirement or purchasing life cover so that loved ones are financially cared for in the event of death.

Insurance companies can also play an educational role, helping women make informed decisions – showing them the various appropriate policies like educational insurance for the children’s future, helping identify what cover is necessary to provide peace of mind, and advising on how to budget to cope with the monthly premiums.

Insurance companies have a unique opportunity to bridge some of the gaps that exist, especially around awareness of the different policies available to comprehensively cover the female consumer group. And they are well-positioned to review and adapt policies to fully meet the specific needs of the female target market.