GFIA Annual Report 2021-2022

FINANCIAL INCLUSION

Full and fair

Inclusivity and equity are the subject of a major new GFIA survey

By Francisco Astelarra, chair of the GFIA Financial Inclusion Working Group

Financial inclusion and DEI (diversity, equity and inclusion) more generally should be considered global imperatives.

Few things hold back individuals and businesses more than low financial literacy and a lack of access to appropriate, affordable financial products and services. Indeed, financial inclusion is identified as an enabler for no fewer than seven of the UN’s 17 Sustainable Development Goals and has been recognised as a key pillar of the G20’s work. It is a key contributor to poverty alleviation, financial resilience and economic growth.

Recent global economic shocks and increasingly severe natural catastrophes have reinforced the urgency of improving financial inclusion to strength the resilience of individuals and businesses. Insurance is the financial service that can provide a buffer against shocks, yet it tends to be the most vulnerable who have the least cover.

And it stands to reason that all insurance companies want to understand their customers and expand their customer base. One way for them to do that is to have a strong commitment to their own DEI to ensure that they have employees and leaders who understand the entire spectrum of any target market.

This year, GFIA has started to map how the world’s insurers are leading the way towards more inclusive and equitable societies. The survey by GFIA’s Financial Inclusion Working Group is based on responses from 21 GFIA members from 22 countries and it reveals actions and good practices by insurers, insurance associations and policymakers in boosting financial inclusion, particularly for women. It focuses on three areas:

Women’s access to affordable and adapted insurance
Insurers’ internal practices and advancing diversity and inclusion within companies
Financial education and economic empowerment

“GFIA has started to map how the world’s insurers are leading the way towards more inclusive and equitable societies.”

The survey was published in March 2022 and will be used to feed into GFIA’s engagement with policymakers. Our intention is to work with a living survey that is periodically updated. The last update was made in August 2022, and in September 2022 it already formed the basis of a fruitful discussion with the IAIS, which is interested in identifying what benefits a focus on DEI can bring to the delivery of fair outcomes for consumers and to improving governance and decision-making.

Women’s access to affordable and adapted insurance

GFIA’s survey showed that nine of the 22 countries surveyed gather data on women’s protection gap, with South Africa, Mexico and the UK having specific KPIs (key performance indicators) relating to women. Nine countries have established objectives to meet women’s financial needs, most through projects to promote diversity and inclusion, and nine reported marketing efforts targeting women or gender protection gaps.

Advancing DEI within companies

The majority of countries report the development of practices that promote inclusion and diversity, including forums, roundtables, committees and clubs such as the global 30% Club, which aims to see 30% female representation in the senior management of businesses by 2030. Insurance companies in 14 of the countries surveyed are actively promoting gender diversity and equal opportunities by participating in committees and agreements specifically created for this purpose.

Financial education and economic empowerment

Fourteen countries reported a strategy for financial education, with Australia, Mexico, New Zealand and South Africa identifying women as a priority group. Proactive engagement in community and financial sector programmes to further empower women was reported by 12 countries, while GFIA members and their member companies in 10 countries offer financial literacy programmes.

South Africa is one of the countries where workplace-based financial education programmes are being offered, covering core themes such as budgeting, credit management, managing risk and insurance, saving and retirement planning.

Meanwhile, in Brazil, various initiatives are underway to help underserved communities. One company runs a boat that does a 15-day round trip to bring banking and insurance services to 250 000 mostly indigenous people in 11 municipalities and 50 communities who previously had no access to such services.

The Financial Inclusion Working Group plans to expand its work and advocacy on DEI, which can bring clear benefits to insurance consumers and the industry itself.

Francisco Astelarra

FIDES (Interamerican Federation of Insurance Companies)

Francisco Astelarra

FIDES (Interamerican Federation of Insurance Companies)

Awareness-raising campaigns

Insurers across Europe are involved in a broad range of awareness-raising campaigns. For instance, in Germany, risk-awareness campaigns are implemented jointly by state authorities, consumer protection organisations, the insurance industry, architects and other stakeholders. Their collaboration is built around a common goal: to raise awareness of the effects of climate change and natural hazards, of the benefits of loss prevention, and of best practices as regards natural catastrophe-resilient buildings. The high level of risk awareness in Germany is one of the reasons for the relatively low protection gap; indeed, the insurance penetration rate for natural perils such as storm or hail is more than 90%.
Most European insurance associations have initiatives to raise risk awareness, such as dedicated workshops, events and educational seminars, as well as frequent in-depth articles, themed newsletters, presentations and other publications.
Many French insurers have launched prevention campaigns and also support the campaigns of “Assurance Prévention”, an association founded by the French insurance association (France Assureurs). Assurance Prévention has produced numerous leaflets, infographics, quizzes, etc. to raise awareness of natural risks. Through its initiatives, it aims to develop a “culture of risk prevention” among students and teachers.

The Greek insurance association (HAIC) launched a digital awareness campaign — “Better to know than to think you know” — to provide consumers with useful information about private insurance and to set the record straight on some misperceptions. The campaign consists of six videos to educate the public about how private insurance works. Most of the videos emphasise the need for resilience in the face of natcat risks and the role of insurers in protecting private property. The videos are hosted on the interactive iknow-insurance.gr platform, which allows visitors to do a short quiz to test their knowledge of private insurance and then obtain additional information.
Insurance Sweden is currently working with its members on a common methodology for calculating carbon dioxide emissions during building repairs. The aim is to raise awareness of the impact on CO2 emissions of rebuilding after fire or water damage, and thus of the importance, from that perspective as well, of preventing such damages.
Insurance Sweden published a statistical report in October 2021 on how different municipalities and regions have been affected by damage caused by flooding, storm and fire.
Spotlighting the central role of municipalities in climate-change adaptation, Insurance Sweden ranks Swedish municipalities according to their adaptation work. The methodology is based on the European Commission’s Adaption Support Tool (2013). The ranking is released every other year, the June 2021 version is available here.
UNESPA, the Spanish insurance association, launched a dedicated website in October 2021 — “Naturalmente Protegidos” (Naturally protected) to explain how natcat insurance works in Spain. It focuses on 10 different risks (rain, flood, wind, drought, frost, hail, snow, earthquake, volcanic eruption and lightning) and details for each how insurance covers property, life, harvests and livestock. The website illustrates the success of the Spanish public-private natcat insurance model. It was jointly developed by private insurers (UNESPA), the Consorcio de Compensación de Seguros (CCS) government scheme and Agroseguro, Spain’s agricultural insurance system, and was launched within the framework of Estamos Seguros, UNESPA’s financial education campaign (running since 2016).
In collaboration with CEPYME, the Spanish confederation of SMEs, UNESPA launched in October 2020 “Prevenir para crecer” (Prevent to grow), a website with information on insurance for SMEs. The website highlights potential risks to which SMEs are exposed, including natcat-related risks, and provides advice on how to prevent them.
Insurance Ireland, the Irish insurance association, and a number of Irish insurers have launched consumer blogs and information repositories on their websites to share useful information with consumers about responsible and ESG investing.

Education

The European insurance industry works to increase financial literacy in relation to risk awareness, insurance protection and long-term savings:

The Croatian Insurance Bureau (HUO) launched a first educational project in 2009, “Financial literacy in the Republic of Croatia”, which was followed by a range of educational activities, often implemented jointly with independent insurers. One of these activities, “Safer Tomorrow”, was initiated in 2021, and aims to raise citizens’ awareness of the benefits of insurance. Within the framework of the project, HUO launched several videos and infographics, some of which specifically target young people.
The HUO organises a yearly competition for the best scientific paper, the best graduate thesis and the best undergraduate thesis in the field of insurance. HUO also publishes the “Croatian magazine for INSURANCE”, a scientific journal for professionals to advance good practice in the sector. Finally, some insurers in Croatia created a colouring book for children to promote financial literacy at a young age in a fun and simple way.
In Italy, the ANIA Academy, together with CeTIF (Research Centre on Technologies, Innovation and Finance of the Università Cattolica del Sacro Cuore), launched the second edition (2022) of the 2nd level master’s in insurance management to train professionals and enable them to respond to the challenges of the “new normal”.
ANIA is also collaborating with LUISS Business School to develop a major course in insurance management as part of its Executive Master in Financial Management.
Insurance Europe produces information for consumers as part of its “InsureWisely” financial education initiative. This includes one-pagers on different insurance topics, including how to limit the effects of natural catastrophes.
The French insurance association (France Assureurs) developed a series of educational booklets within the framework of EDUCFI (the French national strategy for economic, budgetary, and financial education), an initiative launched by the French Central Bank. These booklets help users to better understand how insurance works and what insurance products do and do not cover.
The Spanish insurance association (UNESPA) set up a financial education programme for schools, “El Riesgo y Yo” (“The Risk and I”). It involves 40 insurance undertakings and 164 volunteers and aims to give 2 500 teenage school students basic financial knowledge and insights into risk management.