Research shows that women and particularly those from minority ethnic backgrounds are considerably under-represented in the insurance profession, especially in leadership positions. Published reports document that “white women make up around 45% of entry level roles yet only 18% of the C-suite” (McKinsey & Company: Gender parity is still a problem in insurance). Data by the REG network, data intelligence company, report that only 15.7% of broking roles are held by women (REG: Women in Insurance: Pushing positive change) with the female broker population falling short of FCA diversity targets.
The UK insurance industry employs more than 400,000 people and is still considered as one of the nation’s coveted professions. However, its challenges with gender diversity and equality continue to be a concerning factor for employers and prospective talent. Over the past few years government institutions and insurance bodies have implemented several initiatives to drive change, such as the FCA’s 2022 diversity and inclusion policy for company boards and executive management. The ‘comply or explain’ stance adopted by the FCA provides targets that listed firms must employ to improve the representation of women and ethnic minority groups. Targets include a requirement for firms to ensure that at least 40% of board positions are held by women and progress against diversity strategies are included in annual financial reports. Although some progress has been made with an increase of women in entry level insurance positions, the female to male ratio levels remain unbalanced.
“The lack of female diversity is particularly true of the Account Executive population, which has a significantly low number compared to other professions. There are still challenges around the pay gap which need to be addressed, and some women face barriers with professional development especially if they are single parents or the primary caregiver”, says Lisa Williams, Client Delivery Manager for the General Insurance Business.
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So how can the insurance profession tackle equality and inspire the next generation of female talent?
Build an effective diversity strategy
Research shows that “78% of insurance companies lack internal targets for gender diversity” (Property Casualty: D&I study, issues, opportunities for women in insurance) and a study conducted by Marsh and the National African American Insurance Association (NAAIA) found that “nearly half of the survey participants confirm racism and racial bias as impeding the advancement of their careers in the insurance industry” (Risk & Insurance: Addressing diversity and inclusion in insurance).
In order to address biases and any potential discrimination, inclusivity needs to be embedded into organisational culture. Strategies which include specific diversity targets and measurable activities will help businesses drive real change. A key component of the strategy should be the focus on diverse recruitment through non gendered job adverts, blind CVs and diverse interview panels.
Tackle the gender pay gap
As reported by Statista, the insurance and financial services profession has the largest gender pay gap in the UK. The mean gender pay gap sits at around 24.6%, meaning that on average male insurance employees earn 24.6% more than a female employee, which is significantly higher than the national average (Statista: Mean gender pay gap of full time employees in financial services and insurance). When asked what insurance employers should prioritise to improve gender equality, the majority of people in our online poll said addressing the gender pay gap should be the priority (50%) followed by having more female role models (20%) and mentoring programmes (18%).
Failure for employers to tackle discrepancies around pay will not only continue to intensify internal discrimination but will likely lead to increased attrition and potential reputational damage, impacting business revenue and growth.
Address deep rooted unconscious bias
Employers should identify where unconscious bias exists across the business, working systematically to evaluate deep rooted causes. Examples might include approaches to performance reviews and feedback provided by managers. One study found that performance reviews in a global insurer differed per gender group, where women received comments on their communication style in comparison to men who were advised on skills they needed to develop in order to progress or run a department.
Change must be driven from the top with senior leaders investing in expert training and initiatives that promote the right behaviours and enforce equitable practices. Research shows that conventional unconscious bias training that merely raises awareness does little to change biased behaviour. Investing in a long-term programme that supports structural changes to policies and operations, that isn’t just a one-time training session, will be much more effective.
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Mentorship and sponsorship opportunities
Formal sponsorship and mentoring programmes play a key role in supporting the advancement of women. Professional mentoring provides individuals with the opportunity to receive impartial constructive feedback, helps build confidence and facilitates personal growth. Sponsorship programmes can be a powerful tool for enabling the next generation of female talent. They often provide strategic career guidance and new opportunities to enable women to progress and fulfil their potential.
If you’re looking for a new insurance role, considering your career options or would just like some strategic career guidance get in touch with one of our insurance consultants. Alternatively, if you’re looking to hire or need support with your hiring strategy our expert consultants will be happy to help, you can learn more about our hiring solutions here.
Sources
McKinsey & Company: Gender parity is still a problem in insurance
REG: Women in Insurance: Pushing positive change
Property Casualty: D&I study, issues, opportunities for women in insurance
Risk & Insurance: Addressing diversity and inclusion in insurance
Statista: Mean gender pay gap of full time employees in financial services and insurance
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