Gender issues are relevant to the work that actuaries
perform, as well as to the actuarial profession.
Within the actuarial practice areas of insurance and
pensions, it is well known that gender gaps exist, in protection and savings
respectively. These gaps are compounded by persisting pay gaps, and also by the
longer average life expectancy of women.
The 2015 SheforShield
report produced jointly by the World Bank's International Finance Corporation
and AXA explores the global opportunity in insurance for women, and makes
recommendations to unlock that potential. It projects that by 2030, the
insurance industry will earn up to $1.7tn from women customers, with half of
that arising from the 10 largest emerging economies.
A 2019
Swiss Re report estimates that in a scenario of labour market gender parity
(in terms of both participation and pay) there would be a 26% increase in
global GDP, which would yield an additional USD 2.1 trillion in global
insurance premiums by 2029. Another 2021
Swiss Re report discusses women as key decision-makers in insurance
purchases, and how their behavioural preferences differ from those of men – for
example, women are more loss-averse, they give unlikely scenarios a higher
probability, they are more honest and community-minded, and demonstrate greater
altruism and reciprocal generosity to others.
The OECD
reports that across European OECD countries in 2017, pension payments to women
aged 65 and over were 25% lower than for men, on average, and is a substantially
higher gap than the gender pay gap of 13%. The WEF
provides further insight on some of the multiple causes, such as:
- employment factors (lower salary, poorer
opportunities for promotion and salary-increases, and shorter careers)
- pension design factors (restricted eligibility
due to level of salary/hours worked, accrual/contributions stopping during
maternity periods, and the use of gender-specific mortality tables)
- socio-cultural issues (the absence of affordable
and appropriate quality childcare restricting work opportunities, the impact of
childcare costs which are often paid by women, lower risk tolerance, and
financial communications being targeted at males)
The same WEF analysis also suggests some solutions, targeted
at a range of stakeholders including HR leaders, pensions leaders, women
themselves and governments. These proposed solutions are split between:
- short term easy wins (HR could introduce shared
parental leave, pension leaders could remove eligibility thresholds)
- longer term strategic decisions (HR could
remediate gender-related salary gaps, pension leaders could introduce unisex rates
on annuities)
In the UK, a 2022 Briefing Paper in the House of Commons
Library on the Gender
Pension Gap examines the different definitions, causes and possible
responses to it. It highlights similar points to the WEF paper but also
mentions that the pension gap is higher for private pensions than for state
pensions, and that women are more likely to take highly valuable, but unpaid, carer
roles which go unrecognised in terms of pension contributions. The Actuary
magazine reported on a 2021
UK study by Legal & General, which found that an initial gap in pension
savings of 16% at the start of women's careers deteriorates to 55% by
retirement. On average, UK women retire with far smaller pension pots than
their male counterparts.
The EU
Gender Directive has required insurers in the EU to implement
gender-neutral pricing since 2012. It was accompanied by much debate around the
desirable positive and undesirable, unintended negative consequences of the
change. These effects vary and can work in opposite ways by type of product
(general insurance, life insurance, health insurance, pension annuities).
Further reading:
·
Research paper
investigating the consequent risk selection effects on health insurance in
Germany
·
Research
paper investigating the impact on life insurance in the UK
The Actuaries
Digital magazine of the Actuaries Institute of Australia provides a good
discussion about how sex and gender identity are treated in different life
insurance markets around the world, and how non-binary genders can be handled
in jurisdictions that allow price differentiation by sex.
The Global Impact Investing Network (GIIN) provides a repository of gender
lens investing resources containing research, case studies and other online
resources for impact investors integrating a gender lens in the investment
portfolios.
Gender neutrality and gender inclusion in language can arise
in actuarial work, for example in report writing, policy terms and conditions, and
product marketing. The UN provides useful guidelines
and a toolbox
for gender-inclusive language in English.
