Blogs
22nd February 2023
As a recent new entrant to the market with one and a half years experience working in Marketing, and having graduated from a business degree that was marginally male dominated, I am keen to understand the existence of the disparity between genders within the insurance sector.
From my exposure to the business world, during both study and throughout my professional experience, it is clear more women are interested in pursuing business orientated roles. There is also clear drive amongst my peers to succeed into senior positions and defy societal barriers that can be preventative in climbing the corporate ladder. Indeed, McKinsey reports that in 2022, over two thirds of women under 30 aspire to be senior leaders.
However, notably within the insurance market, from my experience so far, the minority of females is apparent. Although women are not scarce, underrepresentation and the gender seniority gap are prominent.
Moreover, on a larger scale, nationwide retention rates of females in the workplace have significantly dropped. Under-recognition, overwork, disrespect, lack of promotion and company culture has recently spiralled the country into what McKinsey coins the ‘great breakup’ era. Amidst a time where underrepresentation and inequality are rife within the workplace, how does the insurance sector not only champion inclusivity, but also succeed in female retention?
The insurance industry employs more than 400,000 people in the UK alone and is considered one of the country’s most coveted professions. Nevertheless, the sector is renowned for being historically male dominated, with a deep-rooted stigma that the industry is geared towards males. Over the years, evolvement has begun to transpire, as society seeks to challenge gender roles and increase representation in the professional environment. The industry is now starting to see more women in senior positions of power.
However, challenges pertaining to gender pay gaps, attitudes, representation, and recruitment are still very much rife, and the sector is far from influencing a revolutionary change in gender equality in the workforce. This blog addresses the challenges undeniably still facing women and what the sector can therefore do to work towards and champion an inclusive, equal and positive workforce.
The financial and insurance industry holds the biggest gender pay gap in the UK, as reported by the Houses of Parliament. As of 2022, Statista declared that the mean gender pay gap in financial services and insurance industries in the UK was approximately 24.9%. This is compared to the reported National Average, as revealed by the Office for National Statistics (ONS), where median pay for all employees was 14.9% less for women in 2022 and full-time employees was 8.3%. The median calculation is considered a more accurate measure as it conveys the ‘typical’ worker. However, this average can be damaging to actual representation as it masks the disparity of the lowest and highest earners at either ends of the spectrum.
As of 2018, companies with 250 employees or more are required by law to publish data on the gender pay gap within their organisations to the Government. In 2021, The Houses of Parliament reported that 78% of median hourly pay was higher for men, while 13% stated it was higher for women.
Key players in the industry have also declared an even bigger divide in their pay gap, with Insurer, Prudential UK, noting their figure to be 45.2% post COVID-pandemic and Allianz Worldwide Partners reported the highest mean pay gap at 61.5% in 2022.
However, these numbers are speculated to be even higher than figures reported, due to tainted reflections of pay. Kings College London and the Fawcett Society have criticised the UK’s gender pay gap and transparency of reporting, as well as stating it does not address the root issue of inequality.
Notably, there are many external factors influencing this unequal gender pay divide. The discrepancy in pay is largely influenced by the inadequate levels of females holding senior positions. Moreover, women are also less likely to involve themselves in salary bargaining due to internalised assumptions that they are not as deserving as their male counterpart, and instead feel a need to prove themselves much more than men do to attain validation that they are equally deserving of their role.
Although representation throughout the organisational chain has evolved, gender parity is still a major concern, as only 34.9% of industry professionals in the insurance sector are females. Female broker representation, especially, is currently below the obligated low levels set by the FCA-regulated financial services industry, with only 15.7% of the roles in broking being held by a woman.
Adversities in female career advancement and representation at senior levels are also still unequal. As of 2021, women occupy 29% of Senior Executive roles in the industry, according to the Million Women Mentors Women in Insurance Initiative. Again, within broking, after Insurance Age’s launch of the Broker Diversity Push – Gender Leadership Campaign, it was further identified that just 8% of broking CEO posts and 5.4% of chair roles were held by women.
However, positively, great strides have been made to encourage representation at an entry level in the industry. McKinsey reported that as of 2022, 66% of workers in entry level roles are female, compared with the overall figure of 48% in other industries. This marks significant improvement; however, the diversity needs to be reflected throughout all levels of the organisation to attain full equality and inclusion.
Unconscious bias refers to the associations we hold, outside our conscious awareness and control. As such, there is an unconscious bias for women to face prejudice and discrimination due to their gender, alike many other marginalised groups in society. Women are subject to experience the internalised mindset of the sector that women provide less value, are not capable of meeting expectations of senior roles compared to male counterparts and family commitments may prevent them from achieving that of which a man can. For example, a leader might hold an unconscious bias about a female team member that they assume won’t want to travel, if she was promoted to a position where that would be a requirement, because she has young children.
Moreover, the internalised assumption that women need to choose between family and career advancement stumps professional progression, even at a subconscious level. Company maternity policies offering less benefits whilst females take leave, reflect these views and can also deter women from starting a family or powering them to consider a change of employment.
Perhaps one of the main inequalities surfacing in the sector is the culture of the industry. It comes as no surprise that the insurance industry has and continues to suffer immensely from systemic sexism. Indeed, this problem has recently resurfaced, as the market has been under the spotlight for its engrained misogynistic and sexist attitudes, amidst a number of scandals within the industry.
Aviva PLC’s 2022 annual shareholder meeting made global headlines as Aviva’s first female CEO faced multiple offensive sexist remarks and comments pertaining to her ability and reputation as a female leader. Comments from investors at the annual shareholder meeting included referring to her as “the man for the job”, that she should be “wearing trousers” and declaring the adage of “women belong in the kitchen,” with one investor stating: “[Women] are so good at basic housekeeping activities, I’m sure this will be reflected in the direction of the board in future.” Which alluded to the fact that four out of 10 Aviva board members are female.
Moreover, in 2019, a Bloomberg investigation uncovered evidence of endemic sexist harassment in the Lloyd’s of London market. Behaviour towards females included bullying, sexual assault, inappropriate comments and heavy drinking and initiations leading to derogatory behaviour. These activities resulted in Lloyd’s fining one company over a million pounds and since banning daytime drinking for its employees. However, this rule does not apply to the hundreds of other companies who belong to Lloyd’s market.
All these factors discussed influence insurance companies’ ability to retain females, which is surfacing as an alarming problem within the workplace, as outlined in McKinsey’s 2022 report.
Insurance companies are renowned for paying high salaries, yet these advantages are not consistently distributed amongst genders. Firms should ensure that female employees receive equal pay to their male counterparts. This includes not only base pay, but also bonuses, benefits, and other forms of compensation. Moreover, to assess the validity of companies’ claims of gender pay improvements, clearer transparency is required within the sector too. This includes reporting accurately to reflect the actual disparity between genders.
To improve gender diversity, personal and monetary investments into empowering and facilitating the growth and development of young females throughout their career is crucial. Business officials need to nurture and support women from the start of their career, to encourage and influence equal representation throughout organisations. Focus on empowering graduates and entry level candidates to take on more responsibility to allow progression to seniority in their career, will aim to meet aspirations of fair representation throughout all levels of the organisation.
Insurance companies could also invest in leadership development programmes specifically for women. These programmes could include mentoring, coaching, and training to help women advance to leadership positions.
Indeed, some progress has been made at working towards equal representation in the sector. For example, Ignite Insurance Systems recently launched Ignition, a start-up broker accelerator, targeting a 50/50 split of male and female founders.
Insurance companies should also ensure they facilitate females taking maternity leave. This isn’t just regarding paying women a fair wage during their leave, but also ensuring career progression is still attainable upon return, to enhance female retention rates at the company.
Inclusivity needs to be embedded into the organisational culture to overcome adversity facing women regarding unconscious bias and discrimination at work. The main focus being challenging discriminatory treatment of women. Companies should implement policies around diversity and inclusion to embed into their culture and activities. These policies could include specific targets for increasing the representation of women at all levels of the organisation, and initiatives that support the recruitment, development, and retention of female employees.
Insurance companies could also provide diversity training for all employees to create a more inclusive workplace. This training could help employees understand and appreciate different perspectives and develop the skills to work effectively in diverse teams.
Moreover, education and exposure to inspiring females could be influential in promoting positive change. Holding events exposing both male and female employees to female leaders sharing their experiences of making it to the top will, in turn, destigmatise the archaic perceptions of the sector being male focused and break internalised assumptions that women are less capable and deserving of senior roles. This would also motivate females to believe in themselves and understand that career progression to the same level as men is equally attainable.
According to a study by McKinsey, companies with diverse workforces are more likely to outperform their less diverse competitors. Women bring unique skills and perspectives to the table, and this diversity of thought can lead to better decision-making, increased innovation, and improved financial performance.
In turn, companies should be mandated to audit the effectiveness of such policies, as even though in many company annual reviews commitments have been made, the fact the sector is experiencing glacial progress regarding gender attitudes highlights the invalidity of such promises.
Ultimately, the direction of the market needs to embody the values of breaking the stigma and embracing equity, to work towards a more inclusive and indiscriminate work environment. As this year’s International Women’s Day movement states, “Equality is the goal, and equity is the means to get there.” Absolute change and equality will only be achieved through collective activism, to challenge stereotypes, call out discrimination, focus on representation and embrace an inclusive mindset. Only then will women feel valued and empowered within the workplace and we will see a change in not only representation, but also retention.
However, seemingly, change will not come from women acting as the sole force of the movement. Allies are principal to accomplish equality, and without an aligned mindset, equality will never be achieved.
In summary, women play an important role in the insurance industry, bring unique perspectives and drive positive change. As the industry continues to evolve, it is essential that women are represented and treated equally at every level, to ensure that the market continues to thrive and meet the needs of its diverse customer base.
It is evident much more work needs to be done, not only just in the insurance industry, but throughout the professional environment as a whole, to break through the glass ceiling and champion inclusivity and equality. Gender pay gaps are the start, at the basic required levels. Without adoption of basic pay equality, it begs the question, are such companies even meeting primary CSR obligations?
It could also be argued, with reference to my experience studying a male dominated business degree, should initial change come from improving career exposure and encouragement in secondary education? Destigmatising the perception that white collar and corporate roles are historically more attractive and geared towards males from a younger age, could, in turn, encourage the volume of females aspiring to work in the insurance sector and similar business orientated markets.
However, true equality can only be achieved with a shift in attitudes. Investing into DEI initiatives and focusing on breaking discriminatory internalised stigmas will help to embody a company wide diversity mindset. This will balance the gender seniority gap and female retention levels.
It’s time for the sector to practise what they preach in their commitments and promises. Positive change will lead to improved performance, innovation, and customer satisfaction and promote a positive, motivated and empowered workforce to retain the current and next generation of insurance professionals.
Panel discussion addressing the challenges facing women in the market around representation, gender pay gap, discrimination and unconscious bias and how we can promote positive change to action fairer and equal opportunities for women in insurance.
In today's challenging job market, still in the midst of the Great Resignation, every industry is facing recruitment challenges and struggling to attract young talent. But for the insurance sector, these challenges are more acute than most, and they're nothing new. But why are the younger generations not being attracted to the insurance sector? There are a number of reasons for this...
The time has come to say goodbye to this year's Marketing Interns; Ellie Moeran and Julia Palos. We'd like to thank them for their commitment and contribution to REG's marketing activities throughout the year and wish them well as they head back to University to complete their final year of studies! Read all all about their experiences from a year in industry...
Panel discussion on the insurance industry's reluctant adoption of digitisation, what the sector needs to address, the barriers to accelerating digitisation in the insurance market, and as we look to the future, how can technology providers show the importance of tech solution adoption in the market.
In a world that often revolves around expectations of strength, resilience, and endurance, we often overlook the hidden crisis that is steadily engulfing the lives of men. Men's mental health issues are a growing epidemic, and it's crucial we shed light on this critical topic, raise awareness and acknowledge the importance of addressing the unique challenges men face regarding their mental wellbeing...
Panel discussion in support of Movember, addressing the challenges men face regarding mental health at work, how we can break down the barriers and how as employees and colleagues we can work together to foster supportive environments where everyone's mental wellbeing is valued.
