Money

Women key to improving UK’s financial resilience

Published

3 days ago

September 17, 2024

NewsAdmin

When it comes to protection, there isn’t a one-size-fits-all solution for clients.

We need to tailor our methods to improve the financial resilience of different groups of people. This is particularly relevant to the way we engage with males and females.

Although both men and women are typically under-insured, women are more likely to be so. There has been an increase in the uptake of protection by women, as showed in Swiss Re’s latest Term & Health Watch report, but we have more work to do.

Women disclose more information than men do, so could therefore be less likely to have a claim declined

Our own research shows that women are more likely to value the need for protection for themselves and their loved ones, and are less likely to cancel it, demonstrating they are a good group to target, especially at point of purchase. Yet there are barriers to women’s access to cover.

Men are still more likely to be the primary earner in a heterosexual relationship, but their female partner has protection needs that can be overlooked in the belief the breadwinner would still be able to cope financially.

But could they? LV=’s 2024 Reaching Resilience report has found that 65% of couples need both incomes to pay the monthly outgoings. What’s more, there is no guarantee the primary earner could carry on as usual if their partner died or was incapacitated.

The secondary earner/primary carer must still be fully advised to ensure the household is not negatively impacted through either loss of income or having to pay for additional services such as childcare.

Creating products that can flex with circumstances will benefit all clients, but particularly women

At our conference in May, keynote speaker Mix Diversity Developers managing director Hayley Barnard shared that, although she was the primary earner in her family, her adviser focused on her husband, asking him questions and ignoring her in the meeting.

Needless to say, she moved her business.

Not only is this poor behaviour but it was a missed opportunity.

We have other considerations beyond the initial advice. UnderwriteMe has interesting data on men and women applying for cover. It reports that women disclose more information than men do, so could therefore be less likely to have a claim declined.

Is this because women may be more aware of their own health and family history? Are men more likely than women to risk non-disclosure, and more reluctant to share personal information? For example, 18% of females receive a premium rating for being overweight on UnderwriteMe’s platform, compared to 13% of men, despite National Health Service data showing that men are more likely to be obese.

Women are more likely to value the need for protection — so are good to target

Taking extra care when questioning male clients and emphasising the importance of telling the truth could be a means to reduce this risk, as could asking pertinent questions such as, ‘When was the last time you weighed yourself?’ given weight disclosures are often under-estimated.

Using the ‘Send to client’ options offered by insurers such as Legal & General and Zurich, where clients complete the questions themselves, can make them more comfortable about disclosing. Insurers also need to bear in mind that women may be less likely than men to receive a standard rate because they disclose more. Is this fair or appropriate?

Family factors

Income protection (IP) sales have risen steadily for the past 18 months, which is to be applauded, but we need to be mindful about the recommendations we make to women likely to move in and out of the workplace through having a family.

Recommending an insurer that does not pay claims to ‘housepersons’, for example, is not sensible for a female who may become one in the future.

Although both men and women are typically under-insured, women are more likely to be so

I’d also like to see insurers address the needs of part-time workers who balance work with childcare. Insuring them for IP can be tricky because, while you can insure the income, you can’t at the same time insure the ‘houseperson’ element, despite the fact that, if they became incapacitated, they’d lose income and could face extra childcare costs.

Although it can affect men too, women are more likely to fall through this gap. Creating products that can flex with circumstances will benefit all clients, but particularly women.

There’s a huge opportunity to increase the financial resilience of UK households. Improving the way we meet the needs of female clients could be a prudent means to help achieve that.

Emma Thomson is chair of the Women in Protection network

This article featured in the September 2024 edition of Money Marketing.

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