Greater gender diversity will create a stronger insurance industry – but what does that really mean?

Greater gender diversity will create a stronger insurance industry – but what does that really mean

Superficially, the insurance industry is already gender diverse. In fact, figures from the Workplace Gender Equality Agency (WGEA) released in April 2016 suggest female participation in financial services and insurance at 55%, and male participation at 45% nationwide.

So, can we say the job is done on gender diversity? If we look a little closer most would have to concede no. Probably we have not even come close.

WGEA figures show finance and insurance has the largest industry pay gap – the gap is 33.5%, while for base pay the gap is 26%. This reflects fewer women in senior management positions, which attract higher salaries and bonuses.

While women may outnumber men in the financial services and insurance sector, it’s also worth noting nearly 15% of women are employed part-time, compared with male part-timers who account for less than 4%.

Approximately 60,000 people work in the Australian insurance industry, according to the Insurance Council of Australia. It’s a highly influential industry, which means the industry has a huge opportunity to bring more women into senior management and C-Suite roles.

What are the benefits of greater gender diversity? The Diversity Council of Australia claims that increased gender diversity benefits the bottom line through “…improved financial performance, market share, retention, innovation, safety, group performance, access to talent, and productivity, as well as reduced turnover, meeting regulatory reporting requirements and minimising legal risks”.

“…improved financial performance, market share, retention, innovation, safety, group performance, access to talent, and productivity, as well as reduced turnover, meeting regulatory reporting requirements and minimising legal risks”.

A more diverse industry will be a better insurance industry – something we are striving for in the NSW Association for Women in Insurance which both I and Hall & Wilcox are proud to be involved with.

One area of concern is gender diversity at executive levels within the insurance industry. While there aren’t comprehensive statistics available, a recent report by Credit Suisse suggests women occupy just 12 per cent of top management positions in the industry – a mere one per cent of insurance firms have a female CEO.

This reflects trends in Australia generally – for example, ASX 200 companies with a female CEO is just five per cent.

But more positive news stories are emerging. A recent report from Europe shows all segments within financial services, including insurance, have increasing female representation on company boards in Europe. The study stated women currently account for 26 per cent of boards; with women comprising 18 per cent representation in executive ranks.

Lloyd’s of London is currently an outlier in this area, with women accounting for 44 per cent of executive positions including their CEO, Inga Beale. They are showing the way forward.

Critically, the report states that targets and quotas have been a major contributor to a more balanced gender diversity. As a nation, Australia has been reluctant to employ targets and quotas – perhaps it’s time for a change of heart – perhaps the industry will be pleasantly surprised that there is genuine talent that is unearthed through this approach. It will certainly assist candidates to be more confident in putting themselves forward.

In Australia, it’s encouraging to see initiatives such as the 2017 Insurance Industry Diversity Survey, which will provide industry-wide benchmarks and statistics on diversity and inclusion across the Australian general insurance sector.

We’re hopeful the survey will reveal more on the gender make-up within the industry, and we hope it’s the first of many such surveys which eventually show more women participating at the top levels.

In the meantime, it’s important to keep the discussion going and to look for making positive changes in small ways. For example, Hall & Wilcox has been involved with a Victorian government pilot program which aims to stamp out “unconscious bias” in recruiting. This is a big issue for both gender and cultural diversity. Studies show these unconscious biases are strong, yet may be overcome if they are acknowledged and understood.

There is no one easy solution to gender diversity, but organisations such as the NSW Association for Women in Insurance embrace the challenge and we hope to see more Australian insurance organisations take Lloyd’s of London’s lead on the issue.