Mind the gendered insurance gap

South Africa has a progressive legal system, which has seen more women serving in high-ranking positions in government. Also, access to education has improved, and the adolescent birth has declined.

Owing to factors such as these, the country ranks moderately to well in international studies concerning gender parity, such as the World Economic Forum’s annual Global Gender Gap Report.

But there is still some way to go.

A report released in March this year by Equal Measures finds that global progress towards gender equality and the United Nations gendered Sustainable Development Goals (SDGs) has been “slow and marginal” over the last five years.

South Africa ranks as “fair”, while achieving some progress since 2015, according to the index data. The country ranks particularly well in terms of SDG, gender equality.

However, violence towards women and access to justice continue to be major causes of concern. While there has been progress in addressing economic inequality, the gender gap in the economic environment remains.

A lesser discussed domain where gendered disparity plays out is the insurance gap, which both reflects and entrenches gendered economic inequalities.

Despite progress, these inequalities are informing certain imbalances across product verticals, as highlighted by data released by Discovery Life.

Fortunately, opportunities exist to close the gap.

Women and the insurance gap

“Disparities in economic participation between men and women play out in the insurance industry, and have a direct impact on women’s abilities to access the right cover,” says Kashmeera Kanji, Head of Market Analytics and R&D at Discovery Life.

Personal and business insurance plays an important role in fostering financial mobility and equality by working to protect the income and wealth of individuals and their loved ones during times of unforeseen hardship.

While South Africans remain severely under-insured, according to the Association for Saving and Investments South Africa’s (ASISA), it is positive to note that the death cover adequacy ratio for males (39%) and females (35%) remains similar, albeit too low. This means that South Africans need to nearly triple their death cover to adequately cover their risk so that their household could maintain their pre-event standard of living.

However, while professional, middle-class South African women face a smaller insurance gap relative to their male-professional counterparts, in terms of having cover or not, Discovery Life data paints a picture of a large, gendered gap in terms of the amounts that they are insured for,” says Kanji.

“Although our client base is almost evenly split between men and women, when one looks at the sums assured, the disparities become apparent. While men and women have a similar insurance need according to ASISA’s South African Insurance Gap report, Discovery Life’s female clients have less than two thirds of the amount of cover that men purchase”.

Kanji notes that most of Discovery Life’s female clients take out the Severe Illness and Capital Disability Benefits, which is “encouraging, given the risks women face for cancers, heart and artery disease, and other severe illnesses”.

Breast and ovarian cancers accounted for more than half (51%) of the total paid out in female cancer claims over the past five years for the Severe Illness Benefit, highlighting the value of illness cover to women.

Women are also severely under-insured when it comes to protecting one of their most valuable assets: their income.

Discovery’s Income Continuation Benefit covers clients if they become unable to work due to sickness or injury, but only 12% of female clients have the benefit. Ensuring that one’s primary income-generating asset – oneself – is adequately covered is an important mechanism by which we can strive towards economic equality.

Fortunately, as ASISA notes, “the cost of additional insurance is often cheaper for females compared to males”, creating a disproportionate opportunity for women to close this gap further.

Disclaimer

Discovery Life Limited, registration number 1966/003901/06, is a licensed life insurer, and an authorised financial services and registered credit provider, NCR registration number NCRCP3555. Product rules, terms and conditions apply.