In a recent roundtable event, hosted in partnership with EY, London (re)insurance market executives expressed mixed feelings about the notion of introducing targets for increasing representation of ethnic minorities in the industry.
However, the roundtable participants agreed that any diversity and inclusion (D&I) initiatives, including gender targets, should be accompanied by additional action – and accountability - on improving representation.
The discussion followed the publication of Lloyd’s latest culture survey on 22 February, in which the market re-affirmed its commitment to setting ethnicity targets in the second quarter of 2021, adding that it was focused on “improving the experience of Black and Minority Ethnic talent as a top priority”.
Shaun Scantlebury, a partner at EY and diversity and inclusion consulting leader in the company’s people advisory services division said: “Real targets – as a colleague of mine used to call them, ‘targets with teeth’ – can drive accountability. And what I mean by that is there needs to be some sort of downside of not hitting those targets.”
Scantlebury noted that targets are “not a silver bullet”, adding that organisation should “also have other activities underway which are really trying to shift the culture – that’s the critical thing”.
Lloyd’s also said its survey had revealed “notable progress in the experience of women working in the Lloyd’s market over the past 18 months”, with overall representation of women in leadership positions at 29 percent, compared with Lloyd’s target of 35% by the end of 2023
However, statistics on ethnicity in the Lloyd’s Culture survey revealed that black people still only represent around 1% of total market employees, Asian employees comprised 4%, people with mixed ethnicity another 1%, and 2% of those surveyed described their ethnicity as ‘Other’.
The 2020 survey also found that only 46% of black respondents believed that senior leaders in the industry created opportunities for everyone - compared to 63% of Asian respondents and 74% of all respondents.
David Croom-Johnson, CEO of AEGIS London, described targets as “a very positive move”, but added that he would not promote an employee solely on the basis of a protected characteristic, “because it is disingenuous to those people with those protected characteristics to do it”.
“They get there because they are talented, because of their skills and capabilities,” he said. “It’s a very sensitive area and we shouldn’t ignore that elephant in the room.”
Croom-Johnson added that, in terms of pragmatic measures to drive industry pledges on improving representation following the Black Lives Matter protests last year, changing an organisation’s D&I policy was crucial.
“For us that has been the biggest accelerant. We’ve changed our recruitment policies, we are actively seeking BAME candidates, and we are actively on that journey to deliver greater equality, although there’s still a very long way to go.”
David Flint, Head of Broking and Capacity Distribution at Newpoint Insurance Brokers said recognising merit was one way in which representation of ethnic minorities in the marketplace could be improved
“We underestimate the fact that there are a lot of people already from different diverse backgrounds in the market and certainly, when you’re talking about black people, there are senior people in management positions throughout the industry - and maybe that’s something we should focus on more.”
One issue that has been growing in prominence in relation to ethnicity and representation is the use of categorisations such as ‘Black and Minority Ethnic’ (BAME) in equality monitoring.
As Anne-Marie Balfe, EMEIA financial services talent leader at EY noted: “Previously we used classifications [such as] BAME, which really didn’t tell the whole story, so we have separated that out so we now are measuring across our black colleagues and we have other representation as well.”
Christopher Croft, chief executive of the London & International Insurance Brokers Association (LIIBA), said setting targets could present practical challenges to some of the smaller organisations within LIIBA’s membership, but agreed that they “set a general direction for the market”, whilst cautioning that they are “not the be-all and end-all” of the conversation around D&I.
“I personally have never been a fan of quotas, maybe because I’m a woman and I don’t want to be a statistic,” said Ann Haugh, president of global markets at Axis Re, “I want to earn the right to be wherever I am in whatever role I am, so I struggle with it.”
“But I also know what gets measured gets done, so I do think setting targets to move the needle is appropriate.”
EY’s Scantlebury acknowledged the “difference in opinion around the role of targets in driving the diversity and inclusion agenda”, but noted that the firm was seeing “a much bigger appetite for measurable outcomes that can be communicated both within an organisation and externally”.
“It is being tied in with a greater transparency agenda around how organisations are performing, and D&I is a much more prevalent item in engaging stakeholders externally,” he said.
“Targets don’t always have to be about the specific end role,” added Louise Rose, CEO of TransRe London. “We tend to think of targets as just being about who ends up in the role, because that’s very measurable, but one of the things we are thinking about, particularly for entry-level roles, is having broader targets for the range of candidates.”
Rose argued that this approach means recruiters are “still picking the best candidate on the day”, but suggested that a more diverse applicant base will “ultimately create a pipeline that will feed through in time into senior roles, and change the way we think about hiring”.
Samit Shah, CRO of Atrium and head of the company’s D&I group, noted that prior to 2020 D&I initiatives had “tended to be heavily focused on the gender side”.
“What has changed is that ethnicity has been given greater prominence within D&I, and I think that will be permanent,” he said. “In terms of meaningful changes post-Black Lives Matter, I’m not sure what we would have expected, but the impact on targets will probably stay.”
The roundtable also addressed the issue of hybrid working, looking ahead to a likely return to office-based work for at least some employees later this year.
Speaking on the challenges faced by organisations and employees returning to the office, EY’s Balfe said the need for more flexible working arrangement would need to be tailored to the types of roles that individuals had. “Some will have a higher need for in-office work, some will have a lower need,” she said.
Balfe also noted that there would be a need for greater collaborative working spaces in the office, “because that is the piece that people have been craving - to get together for creativity and innovative purposes”.
However, she added, employers would need to be mindful of “the unintended consequences of enforced flexibility”.
“We need to be very conscious of whether that accelerates or, in many cases, decelerates our diversity efforts,” she said.
Belinda Schofield, chief executive of the Association of Lloyd's Members (ALM) and an independent non-executive director with Tysers pointed out that there is “quite a differential between the younger group, who are crying out to get back into the office because they need that socialisation and connection and level of supervision”.
“And we need to be very sympathetic to the fact that there may be seniors who are quite happy working from home, but need to go in because they need to be there for their younger colleagues coming in,” she said.
Schofield also noted that remote working was likely to have had “a greater adverse impact on women than generally on men”.
“I’ve been surprised at how many senior, powerful women have been at breaking point because, despite the fact that they are partners or directors in their firm, somehow they are responsible for most of the domestic chores and the home schooling,” she observed.
