By Susan Holliday, Senior Advisor, Financial Institutions Group, IFC
The coronavirus crisis has brought unprecedented challenges to small and medium-sized enterprises (SMEs) all around the world. The pandemic is not gender-blind; COVID-19 has made it much harder for women business owners to balance business and family responsibilities and has exacerbated the inequalities women-led SMEs already face – such as lack of access to markets and finance, including insurance.
Traditionally, the insurance industry has not been focused on serving women as a significant business opportunity. Women-led SMEs (WSMEs) were often poorly served, as they were considered too costly and complex to deal with for relatively small premiums. This is starting to change, and the COVID-19 crisis is highlighting both the challenges and opportunities.
Back in 2015, the IFC’s SheforShield report found a $1.7 trillion opportunity for the insurance industry by 2030, with around 50 percent of this growth in emerging economies, and insurers are starting to see the value of incorporating a gender lens into their strategy. At the same time, the development of digital technologies is opening up new ways to reach and serve SMEs. A good example of this is Next Insurance, a purely online insurer in US dedicated to SMEs.
The COVID-19 crisis has accelerated the importance of digital and we urge insurance companies to adopt a gender sensitive approach. If we are serious about reducing vulnerabilities and risks for women entrepreneurs and want to propel them to the next level, here are some key recommendations and examples:
Maintain proper customer data including gender. Implement a comprehensive customer relationship management (CRM) database with sex disaggregated data that is easy for all sales staff and agents to access, including those who are working remotely, and the system should be seamlessly linked to the insurance company’s communication channels (calls, texts, video, WhatsApp, and so on). In Kenya, as a result of COVID-19, Britam Microinsurance has adapted its operations to employ digital channels such as WhatsApp to communicate with, and educate its customers, many of whom are first-time insurance purchasers.
Become a trusted information partner to WSMEs. In the Philippines, the Sheroes program that InLife has developed with IFC supported by We-Fi, is leveraging its website as a knowledge platform to inform Filipino women on how to maintain their physical, psychological, and financial well-being in response to COVID-19. To support WSMEs, Sheroes also organizes virtual webinars that equip Filipina business owners with the tools to face their financial challenges.
Innovate around the customer. In India, Bharti AXA General Insurance has partnered with Airtel Payments Bank to meet increased need for health insurance by offering two types of affordable plans that target individuals as well as groups. Another area of increasing importance and value is telemedicine. In Nigeria, in response to COVID-19, AXA Mansard Health Limited launched a telemedicine partnership with Tremendoc to ensure that patients have access to doctors who can diagnose and prescribe treatment, while meeting social-distancing requirements.
Partner to reach WSMEs. Banks and insurers are partnering to offer lines of credit to SMEs that purchase their products, whilst providing online education about more complex financial products. For example, in addition to offering low interest loans, Siam Commercial Bank is offering a special COVID-19 insurance package to SME owners. Lazada, an e-commerce platform popular in Southeast Asia, partners with insurers to offer affordable life and personal accident insurance to its customers.
This is just the beginning, but the combination of using new technologies with a gender-sensitive approach offers great potential for the insurance sector to grow and close the protection gap that many WSMEs have. IFC is working with insurers as part of the We-Fi program to develop innovative ways of providing coverage to women-led businesses, which will support women-led businesses as they emerge from the current crisis and gain a better understanding of how insurance may help protect them, their families and their businesses.