The Quarterly e-Newsletter of the Gender Network March 2011 | Vol. 5 No.

Gender and Microinsurance: Reducing the Vulnerability of

Women
Mayumi Ozaki, Financial Sector Specialist, Public Management, Financial Sector and Trade
Division, South Asia Department

Much of the world’s poor—a majority of them are women—remain without access to
basic financial services, including insurance. The poor have little ability to absorb the risks and
emergencies which place a huge burden on vulnerable households already struggling to stay
afloat. The resources required to cope with those unexpected events, often force such
households to shift the resources away from essential requirements, such as school fees,
agricultural inputs, or food. Such informal and short-term coping measures deplete poor
households’ meager assets, deprive them of the essential means of livelihoods, and push them
deeper into poverty. For households which live on a single source of income, the death or
inability of the breadwinner has significant implications for their livelihoods. Both poor men and
women suffer from lack of access to insurance, but the need for such formal protection
mechanisms is more acute for women, because they comprise 70% of the world’s poor 1 ; and
their unique health care needs, and physical vulnerabilities, make them more susceptible to
risks.

Microinsurance is gaining popularity as an effective tool of protection for the poor. Owing
to the limited outreach by mainstream insurance providers, primarily as a result of market, legal
or cost constraints, microinsurance is provided by various types of semi-formal or informal
organizations in different delivery modalities. A typical delivery model of microinsurance, is
through the networks of microfinance institutions (MFIs). These are most common, because of
their established relationships with the client groups, the majority of whom are poor or low
income people. Due to the involvement of MFIs, in general, women have more opportunities to
be exposed to microinsurance, than men. However, the delivery of microinsurance does not
automatically result in gender equality. Gender equality in microinsurance requires effective
strategies, product development, and operations which reflect women’s specific needs and risk
profiles.

Women’s specific needs and risk profiles include health, property and life cycle risks.
Health issues include women being vulnerable to specific health risks such as the possibility of
high maternal mortality, and complications surrounding pregnancy and childbirth. Household
work, such as carrying fuel woods or fetching water, also has adverse effects on the health
status of women and girls. Property risks include women being extremely vulnerable in cases of
divorce or widowhood, and owing to their lack of control and ownership of households assets,
they have no means of taking control of their lives and gaining financial independence. Physical
vulnerability also puts women’s property at further risk of theft, crime, or harassment. Women in
the informal economy lack protection when they reach old age. Their lower education level
forces women to take up unskilled labor and increases their likelihood of being unemployed.
Together, the latter constitute further life-cycle risks.

1
http://www.unifem.org/gender_issues/women_poverty_economics/ accessed 5 April 2011.
 There has been some progress in the microinsurance sector, in addressing women’s
needs. However, challenges remain and efforts are needed to further improve the effectiveness
of microinsurance for women. There is a need to conduct gender-aware market assessments to
identify the specific requirements of women. These should inform the designs of microinsurance
products that are relevant to women. Once the product is developed, periodic monitoring and
follow up would be useful to ensure women’s satisfaction with the product.

Product development needs to focus on benefits, distribution, awareness creation and

marketing, with women in mind, and tailored to their needs. With regard to benefits,
microinsurance products should provide coverage for risks that are specific to women. For
example, in health microinsurance, coverage for pregnancy, child delivery, and gynecological
diseases is important. However, many insurance providers find it difficult to provide coverage for
pregnancy and child delivery, due to the risk of adverse selection. Some microinsurance
providers deliver such coverage through soft loans (financing that offers lenient or flexible terms
of repayment). If organizations cannot include women-specific health risks in an insurance
policy, they should consider offering alternative-risk management tools. Distribution also
presents further challenges. Women tend to have more restrictions in movement and less
contact with outsiders. Microinsurance requires “women-friendly” delivery channels for regular
contact with female clients. Field staff of microfinance institutions are often preferred options,
because of their familiarity and long association with women’s groups.

In general, women are less exposed to information on financial services and products,
therefore, specific awareness creation materials and marketing may be necessary. Marketing of
microinsurance products should focus on the educational aspects and the benefits of it, given
that insurance is a new concept among poor women. Regular awareness campaigns are also
useful to ensure maintaining women’s interest in microinsurance and to encourage the renewal
of their policies.

In conclusion, overall, women are subject to greater vulnerability. They earn less than
men, have little ownership of, and control over, assets, and are more likely to live in poverty.
These conditions cannot be solved by microinsurance alone, and concerted efforts at social
protection, legal reforms and economic development are needed. However, with access to
microinsurance, women will have greater opportunities for improving their livelihoods, by
effectively using such resources, and enabling them to make more informed and rational
decisions. By having formal financial protection, women are better able to cope with risks,
protect their health, and provide continuous education and healthcare to their children. More
importantly, microinsurance will enable women to accumulate assets and plan for the future.
Combined with proper financial literacy education and awareness campaigns, women can take
advantage of microinsurance, and better withstand various forms of discrimination, harassment,
and other social constraints. Finally, macro-level support, such as legal and regulatory reform,
promotion of social protection, and financial literacy education are necessary to enhance the
benefits of microinsurance for women.

The views expressed in this article are the views of the author and do not necessarily reflect the views or policies
of the Asian Development Bank (ADB), or its Board of Governors, or the governments they represent. ADB does
not guarantee the accuracy of the data included in this article and accepts no responsibility for any consequence
of their use. The countries listed in this article do not imply any view on ADB's part as to sovereignty or
independent status or necessarily conform to ADB's terminology.