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Urgent action for a sector where everyone can thrive

Maxine Goddard_Headshot.jpgBy Maxine Goddard

Here's a sobering thought. None of us will see gender parity in our lifetimes, and nor likely will many of our children or grandchildren.  According to the UN, at the current pace of change, the gender gap will not close for at least another 100 years. For those who paid attention in History, equality between men and women was a core tenet of the UN Charter since 1945. Over 75 years later, we still have another 100+ years to go (and that is, if there are no setbacks). Here’s another sobering thought. What about the timeline for equality for race, social class, sexual orientation, disability and other characteristics? Never has measurement been so important, regardless of the starting point. What and where is our end goal, how fast and when? 

The overarching theme of the 2021 ABI Diversity Summit was Urgent Action. It’s a rallying call that the Insurance and Long-Term Savings Sector must act with urgency and determination to accelerate progress. It takes the collective effort of all of us to ensure we work and live in a fair and inclusive society. Without a doubt our attentions have refocussed and Diversity and Inclusion efforts over the last few months have intensified. We have developed a clearer picture of the plethora of actions we need to take as individuals and organisations. 

Unfortunately, the chances are that if you are reading this article then you are already fully involved in the D&I activities within your own organisation or network. That might be 10% of the industry population, if I’m being generous. We need you to bring more colleagues with you on this mission. But how do we engage the apathetic 90%? 

Inclusive Leadership 

Efforts are underway to ensure our senior leaders are well-equipped with a multi-spectrum of tools to help lead a more inclusive workplace and energise their employees on the why, how, who and when. This work includes Race: Action Through Leadership which works with CEOs and Chairs to increase the representation of Black, Asian and minority ethnic employees at all levels in our sector. It’s not for the fainthearted or the thin-skinned.  Those who already have diversity fatigue are forewarned as more pressure for change and equity is gathering pace internally from the grass roots as well as from the external campaigners and increasingly from the regulators. Old rhetoric, virtue signalling, and window dressing of these issues are just as easily observed as spotting an Emperor wearing no clothes. Empathy and authenticity in our leaders remain the secret sauce; and many must continue working on their own self-reflection, self-education, active engagement, and personal accountability on the subject; all the while striving for a robust P&L. Gathering the data is not easy, building trust amongst your employees is not easy, but not having an action plan that results in visible change will be the ultimate failure in leadership.  

Race and Ethnicity 

Black, Asian and ethnic minority employees make up 10% of those holding entry level positions in the UK Insurance and Long-Term Savings industry. At Executive level this drops to just 2%. Against the backdrop of the wider population in the UK, the 2011 census showed that 14% of the population were Black, Asian or minority ethnic. The 2021 ONS figure, when released in 2022, is expected to show that this has increased to roughly 20%. It goes without saying, that much more needs to be done to be representative at all levels; and that the continued efforts for cultural change from recruitment, through to onboarding and career development in terms of both diversity and improved sense of belonging need to be purposefully accelerated. The more mature thinkers in this space now see the need for targets or sliding indices to track progress and importantly to frame the expected outcome. 

A 2020 report by INvolve showed that the UK economy is losing £2.6bn due to discrimination against ethnic minorities; and findings show that there is a £3.2bn pay gap for Black, Asian and minority ethnic workers in the UK. The Actuary magazine suggested "firms in the top 25% for ethnic diversity are 33% more likely to make profits above the industry average, and those with ethnically diverse boards are 43% more likely". Quite telling. 

Social Mobility and the Talent Pipeline 

Social Class is not a protected characteristic, but it should be a key area of focus; and arguably it cuts across all protected characteristics. Research shows that employees from a lower socio-economic background can take 25% longer to progress in the UK financial services sector. This “progression gap” must be squarely addressed within diversity and inclusion action plans. Within the Square Mile, a stone’s throw from Tower Hamlets and other inner-city areas, it appears “excuses” form the main barrier to progress.  

The collective challenge facing the insurance industry is ensuring we can attract and retain the best talent regardless of humble beginnings. Having a socially diverse workforce will ensure your company both reflects and meets the needs of wider society and quite frankly, your diverse customer, supplier and intermediary base. There is a war for talent that we are sleepwalking into, as other industries apply a fresh lens to fight to employ the best people with an increasingly self-conscious effort to hire the best diverse talent with the modern skills they need in 2030 onwards. Diverse companies can attract, develop and retain a broader talent pool which allows them to serve niche markets with ultimately a better understanding of their customers. 

Compliance, Risk and/or Opportunity 

In addressing issues of social inequality for too long it often appeared reactive and to be more about a Strategic Risk case than a Strategic Opportunity case for inclusion. With the PRA headwinds it’s increasingly becoming a Compliance case.  Wherever you sit in your actions and reactions, in the cyclical world of insurance, inclusive behaviours are a must-have asset to remain competitive, to be attractive to customers and future employees - and to stay relevant. 

The past decades have seen important progress in small steps; albeit patchy, uneven and incremental. However, the message is clear. We need to accelerate even faster than we previously imagined. Those companies with an early start are leading the way but they need to help those falling behind or who are just setting out on their journey. 

So, where does this lead us? 

Creating a culture of “shared responsibility” across the industry is the key to nurturing a culture of inclusion where everyone feels valued, respected, and supported to reach their potential. This means leaders and their employees must work in tandem as we advance. 

How well are you doing your part? 

Last updated 21/10/2021