Diversity and inclusion in insurance markets

14 February 2018

The London insurance market has embraced diversity and inclusion, and has inspired insurance communities around the world to do the same.

With the launch of Inclusion@Lloyds in 2014 and the establishment of the Dive In Festival, launched in the London market three years ago and now already engaging insurance markets around the world, the London insurance market is setting the bar for inclusion and diversity in our sector.

The 2017 festival took place in 32 cities in 17 countries, and is the most visible part of a sea-change in attitude towards diversity and inclusion across global insurance markets, but most noticeably in London.

It is a bold response to the challenges facing an industry that too easily fits the cliché of being ‘male, pale and stale’.

The negative impact this has on innovation, growth and the ability to reach into new markets has prompted attitudes at the top to change.

One of the moving forces behind that change is Dame Inga Beale, Chief Executive at Lloyd’s, who acknowledges that the insurance industry still has plenty to do despite the success of initiatives such as Dive In.

“We certainly do not reflect the global markets in which we operate. It is important we start to attract and retain talent that reflects the diversity of our clients.

That means recruiting local talent and putting it in client- facing roles.

This means firms will be more sensitive to the subtleties of culture and the subtleties of doing business,” explains Beale.

This awareness of the work that still needs to be done runs through JLT as well, says Miriam Earley, who leads diversity and inclusion for JLT Group.

“There has been significant progress in the industry in terms of the conversation.

“What we need to do is translate that progress into action. If we don’t, there is a danger that others will move faster.”

This fear that other sectors will grab the talent and the business is very real, says Beale and is reinforced by data from various surveys such as the Insurance Post Census (see below).

Beale explains: “We’ve got to do this together because we are behind the banks and behind other sectors. We can overtake them but we have got to act together.

“It is not about seeking a competitive advantage for London but about improving the whole sector around the world.

“We want the insurance sector to reflect its markets and its clients. That is what real inclusion will look like.”

Embracing diversity and inclusion is about improving business performance.

Companies that have successfully embedded a diverse culture within their firm and in its key client relationships gain market share.

Crucially, they also gain a competitive edge in new markets, according to research by the Center for Talent Innovation.

A survey of Chief Executives by PwC found that 85 per cent of those whose companies have a diversity and inclusion strategy in place believe it has helped them improve their bottom line.

To achieve this tangible impact, you have to find business partners that share your values and those of your clients, says Farhad Jamooji, Managing Director, Group Insurance at Barclays.

He admits that isn’t always easy.

“We strive to serve our clients, our staff and our communities in a fair and equal way, and with respect.

“Every partner we work with is directly or indirectly serving our client base so it is important that they share that approach.

“What strikes me is that in, the simplest terms possible, it is the right thing to do to help us serve our diverse client base.

“If business partners have got diversity and inclusion in their DNA, we know we will get more innovation and better service. It is about the feel of a company.

“I know that is difficult to measure but when we find it we know that we will be dealing with a partner that attracts talent from wherever it comes.

“Diverse companies come up with more innovative risk financing solutions,” Jamooji adds.

Conversely a broker has to match a client’s needs.

According to Hamish Roberts, Business Development Director at JLT Specialty: “It is becoming increasingly important for a broker to evidence its values and beliefs when it comes to diversity and inclusion.”

According to Roberts: “More often than not we are having to prove our credentials at tender to even stand a chance of winning an appointment.”

He goes on to say: “This is not a passing fad! Buyers expect their providers to match their ethical values.”

Retaining talent in insurance

The search for talent is a major challenge across the insurance sector as it faces major disruption from InsurTech innovators and it needs to raise its game dramatically, says Beale.

“We need to attract young talent into the sector. The proportion of 18-to-24-year-olds in the sector is actually going down. We are not retaining the talent we do attract.

“We are getting them in through the front door but what they find once they are inside is not proving attractive enough to keep them.

“The percentage of women working in the sector as a whole has also dropped although, it has grown in executive roles.

“With black and ethnic minorities, it is the same story. BAME [Black, Asian and minority- ethnic] employees make up 14 per cent of the workforce nationally, but they are only 10.5 per cent in insurance.

“We are making some progress but we still have a lot of work to do,” adds Beale.

Sarah Dunmore, Talent and Development Director for the JLT Group, says they can see many of these challenges within JLT.

“For instance, we have been reviewing succession pipelines for gender and investigating ways of increasing the number of women in the succession pipeline,” says Dunmore.

The industry needs to do much more to attract and retain people from outside the traditional talent pools if it is to equip itself for the future, says Dunmore, who believes it is often hard to get successful people to see the need for change.

“Insurance as an industry is highly relationship driven. The people who work in market-facing roles pride themselves on the relationships they build with their colleagues, with their clients and with the market.

“They don’t see themselves as being anything other than inclusive because they get on with everybody.”

JLT has focused on developing inclusive behaviours throughout the company as a way of addressing this problem with unconscious bias training for senior managers and the promotion of inclusive leadership and recruitment practices, which also focus on identifying people with the skill sets the business needs.

This focus on inclusive behaviour is a key shift of emphasis, says Earley.

“There is a lot of evidence from outside our industry over the past 30 years that efforts around diversity are of limited benefit.

“Across business, even where this has been a focus for decades, numbers of senior women, for example, are still comparatively low.

“That has reframed the conversation over the last couple of years as to whether diversity is the right thing to be talking about or whether it is behaviour.”

Beale says she accepts this distinction between diversity and inclusion but says some firms are not ready to take this bold step.

“Without diversity, you can’t really have inclusion. We tend to use the two words together because we haven’t really cracked diversity and sometimes firms are not ready to move to improving inclusion.

“It is important to have diversity targets as a metric but the way you measure inclusion is through staff engagement.”

There are many ways of improving engagement and evolving a more inclusive approach, especially once you have achieved a degree of diversity among your staff, adds Beale.

“Role models are very important. People want to see others like them in senior positions so they can say ‘I want to be there one day’.

“It shows that you can actually work and have a goal knowing that you can achieve it,” she says.

One size does not fit all for inclusion and diversity

Inclusion also cannot be seen as a one-size-fits-all model, cautions Beale.

“It is important that it is bigger and bolder than just Lloyd’s and the London market.

“It is important that it is really inclusive and that the festivals are tailor-made to the environments they take place in.

“This means that some elements of the broader diversity agenda don’t have to be discussed.”

This approach sits comfortably with JLT and its clients. “Our efforts at improving inclusion need to be globally relevant,” says Earley.

“We encourage people to give consideration to how they engage with people inside and outside the market, and within our organisation.”

Key clients expect this sort of sensitivity, says Jamooji.

“Our company is geographically diverse. This is about us making sure we continue our journey on diversity through the business relationships we have.

“It is about gently nudging in environments where they have a different approach from our global values to some aspects of diversity.

“It is important not to be seen as disrespecting their laws, culture or customs.”

Those markets may have a lot to offer in the future, says Jamooji, so finding ways of working with them that join them to your firm’s values without trampling on their cultural sensitivities will be crucial.

“Historically, the big insurance centres have been London and New York. It is not unfair that dominance gets tested by talent and innovative approaches elsewhere in the world.”

INSURANCE POST CENSUS 2017 – KEY HIGHLIGHTS

  • 3.6% of all insurance senior positions in the UK are BAME, compared to 15.5% in the legal sector.
  • £32,000 is the average male salary, while the average female salary is £26,000.
  • Only 1% of the insurance workforce stated they have a disability, compared with 20% of UK workers.
  • Fewer younger people are chasing insurance as a career, it was 18% previously and is now only 10%.
  • 1% of the insurance workforce is aged 65+ compared with the UK’s 3.8%.
  • 11% of women in brokers are directors and non-exec directors compared to the 25% outside the industry.