Women appear aware of the limits of state pension, health and welfare benefits, which might explain the steady increase in retail income protection – so why do so few women appreciate the relevance of group income protection (GIP)?
Just 38 per cent of women – in comparison to 82 per cent of men – consider GIP ‘relevant’ to their or their family’s health, wealth and happiness, according to research from Legal & General. Yet, this lack of perceived relevance seems more down to poor workplace communication than it does to a feeling that the state will provide. In that research, 21 per cent of women said ‘I don’t read all the company information – there’s just too much to take in’, versus just 9 per cent of who said ‘I feel the state provides this kind of support’.
Meanwhile, in the individual IP sector, female purchases have steadily increased over recent years. The latest Swiss Re Term & Health Watch report showed a gradual proportionate increase for women and a corresponding decrease for men in individual IP sales between 2018 to 2020: from 38/62 female/male in 2018, gradually rising to 41/59 female/male in 2020.
Equivalent splits for the group IP sector are not available, according to Swiss Re, due to the complexities of trying to drill down into such detail as part of industry-wide group contracts.
So, can the group sector take any learnings from the retail market when it comes to helping women better understand and appreciate IP?
Maybe the increased sales – albeit small – of individual IP to women are down to advisers’ ability to have one-to-one conversations with clients. Or maybe it’s because of increased health and mortality awareness off the back of the pandemic. Or a combination of both.
One thing for sure is that in my experience in the retail sector, women make better clients than men in terms of retention once they understand and appreciate aspects like early intervention, and the value of protecting pension payments.
After all, the state simply cannot provide – that’s clear to all genders. But the solution is perhaps not so clear to all. It’s perhaps time for a rethink, time to communicate in a way that better connects with women. The need is there, without a doubt.
Consider the latest Centre for Economics and Business Research (CEBR) findings that show the gender pension gap has widened to more than £180,000 among people over age 55. Men are anticipating an annual retirement income of £20,712, whereas women expect their income will be £14,964 in later life.
Factoring in life expectancy, the gender pension gap would be as much as £183,936, says CEBR. And this is despite the fact that women contribute more into their pension pots than men. Women put 9.4 per cent of their income into their pension pot, on average, in comparison to 8.3 per cent for men. The big driver of the pensions gap is the difference in average earnings.
CEBR suggests that the situation might only get worse for women as a result of the pandemic, with more women than men being likely to work in sectors particularly hit by Covid-19. Consequently, more women have been made redundant or furloughed.
We need to position and communicate benefits and services to women in a way that will help educate, empower and increase engagement. We need to help employers be more ‘human’ in their benefit and wellbeing communications, tell real-life stories of where benefits and services have helped and weave messages into wider wellbeing activity. And we need to add to that the physical and psychological wellbeing needs of women.
Significantly more women than men associate wellbeing with being ‘mentally’ and ‘physically’ well; 74 per cent of women associate wellbeing with mental aspects and 71 per cent associate physical aspects with wellbeing. That compares 54 per cent and 44 per cent respectively for men. More men than women associated wellbeing with ‘having long-term (house deposit / retirement) savings in place’ and ‘having good work acknowledged by colleagues and / or superiors’, according to L&G’s research.
All of this shows the need to better tailor messages. Insurers and intermediaries that provide help here – in the shape of toolkits and best practice sharing – could reap the rewards in terms of usage, value and, ultimately, all important retention. More importantly, the outcome will be more women understanding the value of protecting their health and wealth.
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