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Life Assurance
Sunday, January 1, 1989
The female touch

The 1988 life assurance market is dramatically different from that of the sixties or even the seventies. Although many factors have contributed to the changes that have taken place, one that has most strongly influenced the market-place and the way we sell life assurance has been the changing role of the fairer sex in our society.
The reason women have changed the market-place so drastically in the last 20 years is because they themselves have changed so much. More of them are working outside the home, more of them are their family’s chief breadwinners, and more of them are interested in buying life assurance.
In the last 20 years the female work force has more than doubled. Today 40% of all South African women between the ages of 16 and 65 years of age are in the workforce. Of the 5 1 % who do not work 11 % plan to work at some stage. It can be expected then that sales to women, both black and white, constitute the largest component to the overall growth of life assurance sales during the next decade. There have been a number of events which have influenced, and will continue to influence sales to the female market.
One of the most important issues effecting policy sales is equal pay for work of equal value. The gap in salaries for men and women is still large, but the reason is primarily that women are more concentrated in the traditionally low paying female occupations.
However, women are beginning to catch up by pursuing an education and career. Because of this, more and more women are being promoted into managerial positions. As more women rise through the ranks so the median income of all women will likewise rise, narrowing the gap between their income and the income of men. At the same this will increase women’s disposable income and create a greater need for protection.
More women than ever before are entering the labour force. Today nearly half of all potential women are in the work force and there is no reason to doubt that this figure will continue to rise.
More important, the proportion of employed women in professional, technical, managerial and administrative position has steadily risen since 1970. Twenty percent of all working women are now in this group and, within the next ten years, this number could reach 30%. As their numbers grow women in professional positions will have a positive influence on policy sales. There simply will be more women available to buy life assurance.
Also, with more financial independence, working women will assume more responsibility for financial decisions such as the decision to purchase life assurance. Currently, 42% of career women have purchased a life assurance policy in the last two years and 77% of these have a current account.
Improved marketing will continue to contribute to increased sales to women. Target marketing can be achieved through new information systems, while direct marketing may also increase sales. Evidence of this has been the proliferation in recent years of marketing material and packaged plans directed solely to women. There has also been successful targeting of the female market through more realistic portrayals of women in advertising. And, finally, not only will the percentage of sales to women increase significantly over the next few years but premiums will also rise sharply.
In addition to all this, two other factors - the high divorce rate and the widening gap between male and female life expectancies have significantly contributed to the large number of women joining the work force.
It appears the traditional barriers to labour force participation of women - that is, marriage and children - are weakening quickly. Until recently, women with children were the least likely to join the labour force. Today, about half of all working women are mothers and, of these who stay at home because of children, 25% intend to return to work.
All of this is good news for those in the life assurance business. While selling life assurance to men in the past has been more lucrative, brokers and agents will find a greater potential for growth and increased competition within the women’s market.
Nor should not be a phenomenon restricted only to the white section of the community. Today, women make up almost 35% of the black workforce with more than 100 000 of these being professionals. Figures given by UNISA have shown that in recent years the number of black professional women in the workforce increased by 13%, compared with an increase of 2,5% for white, professional women.
Today’s woman needs all kinds of life assurance products, as does her male counterpart. Now that she has more of her own money to buy these products, she has become even more important to us.
Women are also considerably more likely than men to be good planners for the future and careful budget-makers. They are more likely than men to believe in the need for sound financial advice.
With all of these trends toward women working outside the home, the advantages to brokers and agents are obvious. Women who are sole breadwinners with young children have a greater need for life and disability cover than ever before. They, along with married women who know they will outlive their spouses, are very interested in buying retirement and savings products.
The changing demographic profile of the South African woman suggests that the time has come to sit up and take note of how the market is developing.
The alternative is to lose the opportunity to take advantage of one of the most exciting developments happening right now in the life assurance industry.

Copyright © Insurance Times and Investments® Vol:2.1 1st January, 1989
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