KASHMEERA KANJI: Closing gender insurance gap can shore up economic prosperity for all

Every August, as our country marks Women’s Day, we as one of the country’s leading life insurers reflect on our efforts to close a very real insurance gap in SA.

In 2019, the Association for Savings and Investment SA found in a study that  women, who made up 44% of people earning regular salaries in SA, had 16% lower average earnings than men and an insurance gap of nearly R15-trillion. Consider this in the context of 38% of SA households being single-handedly headed by women, who need to consider protecting themselves with the correct financial products.

Whether women have roles as homemakers or active earners, they contribute directly to the financial wellbeing of households. Life-changing events affecting them could cause significant strain on household finances. In 2021 alone, Discovery Life paid 3,523 claims to female clients. Covid-19 was the largest contributor and cancer events the second-largest cause of claims, with R628m worth of cancer claims being paid to female clients.

With Covid-19 seemingly becoming endemic, the spotlight must shift back to  health events to which women are most susceptible. Cancer accounted for 20% of all death claims, 27% of all disability claims and 50% of all severe illness claims at Discovery Life in 2021. This highlights the importance of regular and proactive screening and also the need for comprehensive insurance cover for cancer, including income-continuation protection. The most common cancers among women are breast and ovarian cancer, which sadly also have a high relapse rate.

SA women also face unique risks that compound the financial impact of a life-changing health event. The World Economic Forum’s Global Gender Gap Report 2022 finds that SA women face higher unemployment rates than men, despite there being more female graduates than males. Where women do find themselves employed, pay is not always equal to their male counterparts, resulting in SA ranking 123 out of 146 countries for wage equality between men and women. Women are also more likely to commit to nonincome generating tasks in a household, meaning that they spend less time in the workforce.

It is also worth considering that SA women on average live nearly six years longer than men, meaning that they are likely to spend six more years in retirement. These factors combined underline the importance of women protecting their ability to earn an income, because it creates the resilience needed to tide these gaps.

One area within our data that might be reflective of the wage gap in our country is the lower level of sums assured for women. While 30% of the number of life cover claims are for women, this makes up just 19% of the total amount paid to beneficiaries in 2021. In other words, the total value of cover is much lower. Similarly, in our income continuation benefit claims, while women accounted for nearly half of the number of income claims in 2021, these claims made up only 31% of the rand amount paid.

A concerning trend we have noticed is that only 12% of Discovery Life’s female clients have added an Income Continuation Benefit to their life insurance policies. Considering that our income is one of our most important assets, women must consider protecting their financial wellbeing through various financial products, particularly including life insurance with an element of income protection. 

There is progress though. In looking at our most recent data, we have found that the gap at Discovery Life is small, with 47% of all policies at Discovery Life being owned by women. Women are also more likely to have severe illness cover than our male clients, with 57% of all our female client’s owning a policy with severe illness cover — a benefit designed to protect clients from trending risks, particularly that of increased cancer incidence and relapse rates.

Our data also ties up closely with what is reported in the business world. With nearly 22% of all businesses in SA being women owned, our female clients hold a 22% share of our business insurance plans. Considering the challenges faced by entrepreneurs and the low representation of women in this space, it is imperative to protect these businesses from failure.

The impact of the Covid-19 pandemic on lives and livelihoods was devastating but let us learn from it. The endemic phase of Covid-19, including the second-order effects of it, could drive future excess deaths, disability, and severe illness but with this knowledge we can ensure that we are comprehensively covered going forward.

So, let us all ensure that women are supported and empowered to reach their full potential, be it in closing the gender pay gap or broadening financial inclusion, to achieve comprehensive life insurance cover through holistic financial planning.

• Kanji is head of market analytics and R&D at Discovery Life.