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Diversity amongst senior insurance execs needs to be more visible

Greater visibility of senior executives from under-represented groups is central to driving progress on diversity and inclusion in the insurance sector, according to speakers at a recent roundtable event

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With increasing pressure on businesses to improve diversity across their employee base, attempts to measure progress on diversity and inclusion (D&I) should also highlight the achievements of employees from under-represented groups, according to the panel at a recent roundtable event.

Speaking at the event, hosted by Insider Engage in partnership with consulting firm EY, David Flint, Head of Broking and Capacity Distribution at Newpoint Insurance Brokers, said: “From a non-white point of view, when I'm around the [London] market, I can see the diversification in the market; if you walk around [the Square Mile] at lunchtime you can literally see it.”

However, he added: “If you're a black person working in a [smaller] organisation of 100 people, you're looking around and you may not see anybody else like you. I know there are lots of black people in senior positions but we don't always know they're there.”

Flint suggested that the industry could do more to promote existing diversity in the market via its representative bodies - through surveying their membership and highlighting people from ethnic minorities in senior industry roles.

Sheila Cameron, CEO of the Lloyd's Market Association (LMA), noted that Lloyd’s has engaged in the Market Policies and Practices (MP&P) initiative to collate data from organisations, that articulates “what the actual numbers are in terms of the market’s ethnicity”.

However, she conceded, with the exception of a small number of the larger brokers, the disclosure rate across a number of protected characteristics still wasn’t high enough to give a full picture of the market’s diversity.

“The overall numbers in terms of ethnicity disclosure rates haven't moved significantly from last year to this year,” she said.

D&I and ESG reporting

Shaun Scantlebury, a partner in EY’s People Advisory Services said that in the context of environmental, social and governance (ESG) reporting, there was a “real and growing interest” from investors in the (re)insurance space in greater transparency and reporting around D&I.

He cited the example of financial services firm Legal & General, which publishes its gender diversity score as part of the firm’s “broader ESG suite of tools and tracking mechanisms”.

“In answering the question of what metrics are really suitable to track progress [in ESG reporting], it's not just [about] what is important for companies to know about their people, it's also about what metrics we think stand a chance of gaining broad consensus across a vast range of stakeholders, [and are] something that you would regularly include in ESG reporting,” Scantlebury said.

Emma Woolley, CEO of Lancashire Syndicates, said that while she had heard “lots of rhetoric, lots of companies saying the right things” around D&I initiatives, “we need to produce a more tangible change”.

Woolley said she welcomed establishing qualitative aspects of metrics for measuring D&I progress, adding: “I do think we need to do more of that, to better understand what is really happening and to identify more drivers for change.”

“I do believe in the metrics because it's changed the narrative around the action that we, as a market, need to take going,” agreed the LMA’s Cameron.

“Within Lloyd's, we've been having debates around ethnicity and how to you measure its progress. We've been debating measures such as disclosure rates because so many firms have such low disclosure rates as to the ethnicity make-up of their employees. And we've spoken about measures such as tracking joiners and leavers by ethnicity, as well as career progression by ethnicity.”

Progress through metrics

Anne-Marie Balfe, EMEIA FSO Talent Leader at EY, said the firm has been looking at its own metrics in detail to provide more information “on the basis of inclusion and what's not working and what we can actually start to address”.

“We do track our data based on gender and what's happening in terms of attrition, in terms of the proportion of promotion, and how quickly somebody is progressing through the organisation.

“We've also started to [see] a lot more detail around ethnicity and what's happening in terms of lived experience for some of our black colleagues, because we started to notice that attrition was higher, and progression was much slower for our black colleagues.”

“That's when you start to see some of those non-inclusive behaviours happening and you can start to address some of those in a much more systematic way,” she said.

Richard Dudley, CEO of Aon UK’s Global Broking Centre, noted that it could be “quite a journey to actually collect that data”, for firms looking track D&I progress through requesting employee data.

“A lot of the elements are not captured in your regular HR systems or formally recorded in the system when people are recruited,” he noted.

Dudley said Aon has reached a point in the UK where 88 percent of employees had supplied data on their sexual orientation, gender and ethnicity, although he conceded it was “a bit lower on the disability side”.

He said there was a “clear business outcome” in terms of using metrics to track progress on D&I in the company.

“We're increasingly coming under expectation from clients, and not only are we being asked about D&I as part of a broader ESG question set, but also some clients are setting specific expectations of how they want their team to look before we actually present it back to them.”

Christopher Croft, CEO of the London & International Insurance Brokers Association (LIIBA), expressed his concern that smaller firms could struggle to match this level of data capture, however.

“We're very conscious as an association that we need to find ways to help our larger members with large HR departments to share experiences and techniques with those smaller firms where the HR function is a part-time job.”

Barnaby Rugge-Price, chair of Howden Broking Group and executive chair of HX, said that, as part of a large firm, Howden had “a broad enough data set to measure what we're doing”, adding that the company tracks developments in staff turnover, “mapping our talent and then following that talent through the organisation”.

“There is real demand from investors and from clients, and there is real demand in fairness from our colleagues around change,” he added. “But I do think, at some point, whilst we need to push on all fronts, we need to be realistic that fundamental change is probably going to take maybe five years on a good day, up to 10 to 15 years across the industry.”

Driving inclusion

Dominick Hoare, group chief underwriting officer and active underwriter of Munich Re Syndicate cautioned that the industry was “often too focused on the diversity bit and not focused enough on the inclusion bit”.

“Diversity, in many respects, is a numbers game and you can mandate it, but without inclusion, diversity is meaningless. Inclusion is the real prize here,” he said.

Paul Jardine, independent non-executive chairman of Asta said the issue of investor expectations around D&I in the context of ESG “is a real one”, with some “only investing in businesses that they consider to be right at the forefront of progress”.

“My concern is whether the metrics that we all put forward actually change behaviours and fast-track us to a different place.”

EY’s Balfe stressed the need for incorporating D&I objectives into company culture by engaging the employee base in discussions around representation, creating safe spaces for people to call out inappropriate behaviour, and making better use of employee resource groups to foster inclusion and drive cultural change.

“There are opportunities to have personal stories about people who have progressed in their career in different ways, that highlight or create opportunities for [others] to look up and see ‘There's somebody like me, [so] I can succeed in this organisation and this sector’,” she said.

Engaging middle managers

Malcolm Newman, managing director of the SCOR EMEA Hub, said that while his firm has seen “real signs of great progress” on gender diversity, due in part to the imposition of a 30 percent quota for female board positions, it has found it more difficult to make progress on ethnicity targets.

Newman said Scor has attempted to implement an education programme for its middle management, “to understand what it is to be systematically discriminated against, and what it is to have your life experience framed by your colour.”

“That's where I think the education needs to be and that's a really difficult piece of work to do,” he said.

Asta’s Jardine said that part of the problem was that a generation of middle managers had been promoted as subject matter experts but were “very poor managers”.

“I don't see that changing with training or anything else. We need to take bold decisions to move those people back into their centres of excellence and get a new generation of managers that actually can make a difference,” he said.

“I get frustrated with the pace of change and I think middle managers are one big reason why it's slow. They're the ones that have the direct interaction with the teams and need to turn board level vision into reality,” said Lancashire’s Woolley.

“Clear cultural objectives linked to remuneration is a potential supporting tool to help drive this forward,” she continued. “If we fail to improve around D&I, I think we've got a future talent problem. The new generation coming through - the future workforce - thinks differently around this, and we will struggle to attract them to our industry.”

Newpoint’s Flint reiterated the importance of initiatives that exerted an influence on middle management, saying: “That's where the grassroots get their influence from and they've got an extremely powerful position. [For] the young people coming through, the people they report to are the ones that they're going to take the lead from.”

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