Gender Issues in Micro-insurance

1. Gender Issues in Micro-insurance Dana Peebles Kartini International READI – Feb 8, 2018

2. The Context • Only 3% of the poor in the world’s 100 poorest countries have micro-insurance • Leaves approx. 2 billion people uninsured • Women and girls make up 70% of the world’s poorest

3. The Context: • Women generally own less property, have lower incomes and fewer assets than men • Means they have fewer resources to manage risk and respond to life challenges • Therefore they represent a key target group for micro-insurnace

4. Gender-Specific Risks Coping strategies poor women often useinclude: • Selling assets • Pulling children from school • Using business profits to cover short-term emergencies as opposed to making longer-term investments • Effective in short term but can reinforce longer term poverty

5. Gender-Specific Risks • Pregnancy and childbirth create very specific health risks for women • Maternal mortality rates tend to be high in poor countries and communities • Women are also more vulnerable to some diseases such as HIV/AIDS

6. Gender-Specific Risks • Women live longer than men in most countries • For poor women this can mean more years living in poverty due to loss of spousal income • In some countries family property of widows also appropriated by male relatives

7. Gender-Specific Risks • Women more likely to work in the informal sector • Less legal protection than work in formal sector Risks include: • Higher rates of asset thefts • Harassment by authorities • Lower incomes to withstand losses

8. Gender-Specific Risks • Women more vulnerable to gender-based violence both inside the home and in public • Creates both short and long term losses due to physical and psychological injuries • World Bank estimates that globally lost productivity resulting from domestic violence ranges from 1.2% of GDP in Brazil and Tanzania to 2% of GDP in Chile.

9. Gender-Specific Risks • Climate change has exacerbated natural disasters and crop losses • Women, boys and girls are 14 times more likely than men to die during a disaster • Can be higher for men in hurricanes and earthquakes in some regions • Study of 141 countries found gender differences in death rates in natural disaster directly linked to women’s economic and social rights.

10. Women’s Micro-Insurance Concerns • Some insurers do not provide coverage for pregnancy-related costs • Every day, approximately 830 women die from preventable causes related to pregnancy and childbirth • Skilled care before, during and after childbirth can save lives of women and newborns • These services more readily available with extension of MI to cover pregnancy and childbirth

11. Women’s Micro-Insurance Concerns • Many microinsurance products available only through MFIs  • Consist primarily of life and health insurance policies generally tied to micro-loans women have taken out • Poor women would like to have access to these life and health insurance policies even after their loans repaid • Also would like option of being able to pay higher premium to ensure all family members can be covered

12. Women’s Micro-Insurance Concerns • Some women concerned their spouses will not give priority to using life insurance payouts to cover critical costs for their children’s welfare, e.g., school fees • Thus they would like to have micro-insurance products that include diverse payout options • E.g., staggered payouts over several years or direct payments going to cover school fees or other core expenses for their children or to a nominated beneficiary of their choice

13. Women’s Micro-Insurance Concerns • Women have also indicated they would prefer life and health insurance tied to loans be voluntary as opposed to mandatory • While voluntary schemes tend to be more expensive for the MFI, there are examples of voluntary schemes that are financially quite viable • e.g. the SEWA Bank for self-employed workers in India or the BancoSol in Bolivia

14. Business Case for Micro-Insurance for Women Women have characteristics that may make them more attractive to formal insurers • Are less mobile than men = a more stable client • More likely to be more reliable in making regular payments • World Bank Group studyof 350 Microfinance Institutions in 70 countries confirmed overall pattern of women’s reliability: “having more women clients is associated with lower portfolio-at-risk, lower write-offs, and lower credit-loss provisions (other things being equal)”

15. Flexible Micro-Insurance Options for Women Three examples: Colombia’s La Equidad is a mainstream insurer for three million people It has structured its micro-insurance life insurance benefits to protect children in 2 ways: • It pays out both a lump sum for death and funeral support • There are also monthly benefits that can only be used towards education for the two years following the death of a parent and monthly payouts for food for one year

16. Flexible Micro-Insurance Options for Women • SEWA Bank in India provides diverse products to cover death, health and women’s assets • Includes options to also cover husbands and children for low incremental fees • Children’s insurance provides coverage for all children in family in one premium so families not put in position of having to choose just one child to insure

17. Flexible Micro-Insurance Options for Women SEWA MI programs integrated with their clients’ fixed deposit savings accounts Gives them the option to pay their insurance premiums from the interest on their savings. SEWA also uses diverse communication strategies to promote their MI products and educate their clients about these Has found their female clients value regular face-to-face interactions

18. Flexible Micro-Insurance Options for Women BancoSol in Bolivia offers a health microinsurance program in collaboration with Zurich Insurance Provides full maternity coverage with just a seven-month waiting period Allows women to buy this insurance shortly after they find out they are pregnant

19. Flexible Micro-Insurance Options for Women BancoSol is an MFI with close to 200,000 clients Was able to use this volume to negotiate more women-friendly terms with Zurich Insurance This health MI program has been quite successful With 2 years, program had 14,000 health micro-insurance clients, of whom 62% were women (compared to 45% of regular loan borrowers)

20. Conclusion • Powerful case for developing micro-insurance products that cater to poor women’s specific needs • Large potential market • Existing product and delivery models have proven to be both cost effective and profitable • Can make significant contribute to reducing risk and poverty for a large segment of the world’s female population not yet covered by insurance

21. Conclusion • Can make significant contribute to reducing risk and poverty for large segment of the world’s female population not yet covered by insurance • This has a much wider spin-off effect • When poor women’s risks and poverty reduced, they often share these benefits with their children • This contributes to both the overall health and welfare of entire family and can reduce social infrastructure costs