Opinion: Addressing the gender disparity in insurance
The pandemic thrust many into a state of unknown - furlough schemes, job losses, and drained savings became part of the new normal. Many will agree they were shaken to their financial core, yet statistics have shown that women were the hardest hit during this difficult time.
A report from the Institute for Fiscal Studies found that women were about one-third more likely to work in a sector that is now shut down than men, such as retail and hospitality, and those that were still employed were left disproportionately juggling child care responsibilities.
All of a sudden women were opting out of work, with research from McKinsey finding that one in four women were considering leaving the workforce or downgrading their career, versus one in five men, with working mothers, women in senior positions, and Black women amongst the most affected.
It’s also true that women are more likely to come up financially short each month than men, with women more aware than ever before of the need to safeguard their financial futures.
However, despite knowing they need to shore up their finances, many women are not taking advantage of products such as life insurance or income protection. Through speaking to our customers, we found that a lack of knowledge of these products was one of the biggest barriers women faced, with nearly half (47%) admitting to not understanding what income protection was.
In order to help women safeguard their finances, advisers should take note of what’s happening to women and question whether they’re meeting their needs in the services they provide.
Understanding the differences
Insurance offerings have typically been geared towards male-orientated milestones, as advisers adhere to stereotypes that place men in the driving seat, with a recent study from Merrill Lynch Wealth Management finding that both male and female financial advisers spent 60% of their time on the man without realising. Advisers may assume female needs neatly slot into an existing framework, however, this viewpoint is outdated and in need of shaking up.
Our latest research identifies the key ways in which female financial planning differs from the average man’s - important milestones such as becoming a parent, buying a first home, or having someone close to them become ill without cover, were amongst the top motivators. 53% of women were also motivated by the pandemic to take out life insurance, compared to just 40% of men, showing that they were harder hit by Covid-19. Clearly, women have different motivations behind taking out insurance and their wants and needs should not be boxed into a pre-existing narrative that currently holds men at the forefront.
Beyond their motivations, it is also worth considering the type of access they have to financial advice. Having an acute sense of personal finance is obviously an important life hack, but one of the biggest challenges women face is finding truly impartial advice. Our research found that being unsure of how to buy income protection was the main reason (23%) women don’t take out income protection, as opposed to only 14% of men.
Levelling the playing field
The advice world has been slow to distance itself from old-fashioned stereotypes, often casting women as passive observers rather than financial decision-makers. To change this, advisers must question whether the service they provide is truly reflective of modern households and, if not, how they can improve their relevance to everyone with a protection need.
In an era of personalisation, people expect to use services that chime with their own experiences, preferences, and needs. Naturally, women are no exception. If advisers want to engage a more diverse customer base, they should focus on providing easy access to bespoke, unbiased advice that genuinely caters to everyone who needs protection.
Marketing your services in the right place, in the right way, plays a part in this. By making sure your voice and messaging are engaging and relevant to everyone, on social media for example, you’ll reach a wider audience. Understanding the real barriers to getting protected in a modern setting (not an outdated, male-focused one) will also make a difference.
It’s clear there are discrepancies between the male and female experience of personal finance, especially within the protection space. Advisers proactively taking an inclusive, unbiased approach to the way they offer and deliver financial advice is the way forward.
About the author: Tiina Björk, Chief Design Officer at Anorak, is a Design Director with nearly 20 years of experience in leading and mentoring multi-disciplinary teams and making useful, meaningful, and beautiful digital products and services.
