Personal Finance

To expand, insurance industry must recognise women's evolving needs and preferences


Women hold significant financial power as household breadwinners and business owners globally. PHOTO | SHUTTERSTOCK

Women hold significant financial power as household breadwinners and business owners globally. Despite this, they often remain overlooked as the target audience for various insurance solutions. Recognising the distinct behavioural preferences of women is crucial in understanding their role as consumers of insurance.

Certainly, when examining the realm of insurance and financial decision-making, it becomes evident that there are notable differences in behavioural tendencies between women and men.

These distinctions have meaningful implications for the insurance industry and emphasize the necessity of customising insurance products to cater to the unique needs of women.

One of the primary distinguishing features of women's behaviour, in the context of insurance, is their heightened inclination towards risk aversion and loss prevention. This tendency can be attributed to various factors, including societal norms, financial responsibilities and care-giving roles often assumed by women.

As a result, they tend to prioritise the protection of their assets and financial stability, making them more cautious when it comes to making insurance-related choices.

They are more likely to seek comprehensive coverage that shields them from potential losses, whether it be in health, property, or life insurance.

These behavioural nuances have a significant impact on the financial choices made by women. They are more likely to engage in careful financial planning, seek advice from trusted sources and make well-informed decisions when purchasing insurance.

Additionally, women's longevity and lifetime earning potential have been increasing, making it crucial for the insurance industry to recognise their evolving needs and preferences.

The insurance industry needs to evolve in order to seize the expanding opportunity presented by women as a significant customer segment. Insurers must acknowledge the gender-related differences in preferences, discern the appropriate solutions to offer, refine communication strategies tailored to women and determine the most suitable channels for product distribution.

The rapid expansion of digital platforms, especially in the post-Covid-19 era, presents insurers with new avenues to connect with women and enhance their accessibility to insurance coverage.

Insurance companies that grasp these behavioural disparities between genders are better positioned to serve women effectively. This may necessitate the transformation of insurance value chains, encompassing everything from product design to distribution channels.

A notable trend is the increasing number of women entering the realm of entrepreneurship. For instance, in Kenya, women account for approximately 53 percent of the country's population and about 30 percent of registered businesses and this percentage is on the rise.

However, women entrepreneurs continue to grapple with a persistent funding gap, despite evidence demonstrating that female entrepreneurs generate higher revenue per dollar invested than men.

Similar to all business owners, women entrepreneurs face an array of risks while managing their enterprises. These risks encompass climate and natural catastrophe-related threats, property damages, cybersecurity concerns, liability issues, supply chain disruptions and various forms of business interruptions.

Insurance plays a pivotal role in safeguarding their employees, properties and income. A more tailored approach to insurance could offer women entrepreneurs enhanced protection and support in their business endeavours.

Here in Kenya, where numerous women run small enterprises, micro-insurance provides an affordable means for them to manage risks effectively. It is imperative that both the private sector and government enhance their collaboration efforts to promote greater gender inclusivity and equality within our economy and society.

However, insurance companies are evolving and innovating as they strive to better cater to the needs of women. This transformation is often driven by the utilisation of mobile technologies and the implementation of micro-payment systems.

For example, insurers are developing healthcare coverage and hospital cash insurance specifically designed to align with the healthcare profiles of women.

Recognising and addressing the unique behavioural preferences and financial needs of women is paramount for insurance firms seeking to tap into this influential and underserved customer segment.

By tailoring products, distribution channels and communication strategies, insurers can not only bridge the gender gap but also contribute to empowering women as both consumers and entrepreneurs in the world of insurance.

The writer is the Chief Executive Officer of APA Life Assurance Limited.