Can insurtech solve women's life insurance coverage gap after COVID-19?

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According to the U.S. Bureau of Labor Statistics, as of early this year there were about 100,000 more women than men in the workplace. This had happened only once before, during the onset of the Great Recession when men were laid off at a higher rate than women, so women temporarily made up more of the workforce. When female employment surpassed male employment earlier this year, it was more organic and sustainable. That’s because there’s been steady growth in service-based businesses that tend to employ more women, and a shift away from traditionally male-dominated jobs, in sectors such as manufacturing. Now, the COVID-based workplace transformation is driving more service and office related functions into work from home or sequestered locales, which will accelerate this imbalance.

This milestone of female employment exceeding male employment in the workforce highlights some important and difficult realities regarding insurance trends, namely that women tend to be uninsured or underinsured as compared to their male counterparts. In fact, the Insurance Information Institute found that more than 40 percent of women have no life insurance. Insurance serves as an important resource, indeed an asset, to women as their share of economic dependence to themselves and to their families increases. Whether through life insurance or a range of other products, now more than ever women have to financially protect themselves and those who depend on them.

When coronavirus struck, the initial phase of job losses hit female employment harder than male employment. The U.S. Department of Labor noted that nearly 60 percent of the initial wave of job losses were shouldered by women, the opposite of what happened in the Great Recession. Suddenly, the shortfall in insurance levels for women had dramatic and troubling implications in very real-life terms.

Why don’t many women have the coverage they need and why is insurance so important for them? One reason women often don’t have insurance, which unfortunately the industry sometimes reinforces, relates to marriage and harkens back to outdated, traditional gender roles. Even today, when women are married to insured men, the tendency can be for women to consider their situations as more secure than is often the case. Women also live longer, so they require more resources, and oftentimes don’t account for significant costs that will have to be replaced if their income or a spouse’s income is gone. Expensive examples include housing, child care, health care and college costs. Women’s longer life spans also can diminish their interest in coverage, though many do not realize that this also results in lower premiums. What also occurs, in the case of divorce from an insured spouse, is that women simply neglect to think about the need for insurance because so many other important things are happening in their busy lives. Research by Fidelity Investments shows that the impacts of money issues are not just financial. Fidelity learned that 70 percent of working women who said they were affected by financial stress also struggled with managing their diet and exercise, and were almost one-third more likely to become overweight.

Coronavirus has exposed the reality that risk is ever-present and the traditional inequities in insurance levels for women should and can be addressed in a more effective and data-driven manner. The traditional lack of structured or targeted data for the industry has created difficult hurdles in the past, but these barriers are being erased and the sector is stepping up integration of emerging technologies to help female customers.

Today’s technologies for the insurance industry, driven by insurtechs, are providing real-time data and analytics. Using the prior example of divorce, it’s one of many exceptional data points to use for reminding women about the benefits and importance of insurance at a time when they are handling many other complex life issues. Tools like artificial intelligence and data analytics are also transforming the insurance sector into a more nimble and responsive industry. Agents and carriers can now identify, monitor and analyze key information in order to offer products to women in a more focused way. Precision and actionable data, like risk for women based on factors like geography, age and lifestyle allow for highly targeted and timely messages. This helps the industry to better serve the traditionally underinsured female demographic, while allowing carriers and agents to increase revenues.

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