Insurance sector: Benefits of a diverse and inclusive workforce

The insurance industry, like many financial services sectors, historically had a reputation for being white, middle-aged and male. This image of the sector is arguably still true today. The time has come for insurance firms to up their game and reap the rewards of a diverse and inclusive workforce.

Britain’s demographics are changing. The population is becoming older and more diverse, with a higher percentage than ever before from Black, Asian and Minority Ethnic backgrounds. As a key driver of the UK economy, the insurance sector employs more than 300,000 staff across the country. Sadly, those employees are not reflective of the wider UK population. Yet there is clear acknowledgement across the industry that business is negatively impacted when organisations don’t reflect the diversity of their clients.

What gets measured, gets changed …

So, what are the facts? And how can insurance companies drive change?


Fact 1: Gender diversity is falling in the insurance sector 

For 300 years, Lloyds had 100% male quota and women were not even allowed on the underwriting floor. When Dame Inga Beale became CEO of Lloyds of London in 2014, she was the first female to do so in its 326-year history.

The good news is that we’ve come a long way and the insurance industry fares well in terms of female representation in entry-level positions (57 per cent of insurance employees in entry-level positions are female). However, there is a pattern of declining gender balance towards senior levels within insurance businesses. The Insurance Census 2019 found that there were fewer females holding the position of CEO or in a C-suite role than in 2017. The number of respondents working in a company headed by a female CEO dropped by half to just 5 per cent, while female director roles have also decreased.

The statistics from the Census are consistent with data from the Chartered Insurance Institute, which indicates that of those members holding Associateship or Fellowship status, only 26% and 13% respectively are women. 59% of respondents on the Census believe that there should be more women on the company board, so change is recognised as necessary.


Fact 2: Ethnic diversity remains a challenge for insurers 

The London Insurance market is highly underrepresented for Black and Minority Ethnic professionals. The sector is marred with historical connections to racist practices, and for many individuals within these communities it wouldn’t be seen as an attractive sector. The Insurance census for 2017 reported that only 10 per cent of employees were Black, Asian and Minority Ethnic). This is a worrying statistic, but perhaps more worrying still is the fact that the most recent figures of 2019 show that only 7 per cent of employees are Black, Asian and Minority Ethnic. So, the insurance sector is moving backwards, and the statistics are woefully behind the rest of the country.

When it comes to moving up the career ladder, the statistics are even more striking. The insurance boardroom contains few people of colour. In total, 3.6 per cent of the insurance boardroom is non-white, compared with 8 per cent for the FTSE and a national average of 6.7 per cent.


Fact 3: Lack of age diversity leaves a worrying gap in insurance sector succession planning 

Like other countries, the UK has an ageing population with more than one-fifth over the age of 65. The ONS projects that a quarter of citizens will be 65 or older by 2050.

At one end of the spectrum, the insurance industry struggles to attract young talent and work needs to be done to champion the career opportunities within the sector. At the other end of the spectrum, just 1 per cent of the insurance workforce are 65 or over, compared with 4 per cent of the workforce. The insurance sector really is ‘middle aged’ and having a multi-generational workforce is important for success. Without a focus on diversity-related attraction strategies to future-proof the talent pool, the industry will continue to age and lose touch with more innovative and leading-edge clients.


Why L&D teams need to be at the heart of Diversity & Inclusion drives 

As an HR/Talent professional you will know that the more diverse your organisation, the better your employees will be at communicating, having empathy, and understanding your clients. Diversity of thought and creative thinking means you can more easily reach new markets and customer bases that you might have otherwise not understood. To truly unleash the potential of your workforce, insurance leaders should weave the D&I agenda throughout the business. Success of D&I goals are highly dependent on talent development.

The Women in Banking and Finance report, Accelerating Change Together, finds that 26% of women, compared with 13% of men, cite lack of career development opportunities as the top reason for dissatisfaction at work. There needs to be a rethinking of how diverse candidates are not only brought into an insurance organisation, but how they’re supported throughout their career, and what opportunities for development are offered to them. The insurance sector is struggling to attract and retain diverse talent but in order to succeed there will need to be a significant change in mindset. During the 2019 Insurance Census respondents were asked whether their employees have equal opportunity groups and programmes in place and, shockingly, one respondent stated: “As we have no non-white employees, this is not relevant.” For change to happen, individuals and organisations need to start thinking and acting differently.

It’s not all bad news. There are a number of insurance firms in the UK that are doing some quite exceptional work to drive change. The 2020 Inclusive Companies list included Bupa, E.On, Allianz Insurance, LV= and Hastings Direct from the sector.

Just Group, like many in the Financial Services sector, have publicly made a commitment to have 33% female senior leadership by 2023. They are doing this through external mentoring for diverse talent, with nearly 60 employees having taken part as mentees or mentors to date. They also use their Apprenticeship Levy to offer Level 5 Leadership & Management programmes across their business. This comes at no cost to the participants and enables them to study while they work, opening up opportunities for self-development and career progression. “Participants have fed back that the programme has really helped them to improve their skills and capabilities across a range of areas, including planning and prioritisation, building relationships, managing performance and supporting the wellbeing of their teams.”

Zurich Insurance also share their strategy for equitable development and career progression. Their tactics include mentoring and sponsorship of diverse talent, a buddy scheme for employees going on/returning from parental leave, a commitment to having at least two females on all succession plans, diverse cohorts on training programmes, and development programmes focused on female and ethnic minority groups.

We are proud to work with hundreds of learners from these organisations on our apprenticeship programmes and are privileged to see first-hand how such initiatives have an impact on confidence, capability and career progression among diverse groups of workers across the industry.


Six actions for Talent and HR teams to tackle a lack of diversity in the insurance industry

Improve the insurance industry’s image:

The industry needs people with varied life experiences to provide role models and help shape perceptions of the insurance industry. Take steps to champion those role models and show that your organisation is inclusive and seeks out those differences. This will improve the sector’s image and Employee Value Proposition (EVP) to attract people to the industry.

Creative talent attraction:

There hasn’t been enough done to attract or retain talent from ethnic communities. Unconscious biases, or stereotypes that we hold without even being aware of them, often keep the industry from achieving diversity. Shockingly, 76% of employers admit to having discriminated at some point. Consider using the BAME Apprenticeship Alliance to open up a different pool of candidates and challenge the recruitment processes.

Support continuous growth at critical life stages:

Work to better retain middle managers and women by offering flexible and family-friendly work arrangements, as well as providing mentoring, guidance, support and continuous training to keep them motivated and progressing.

Develop future industry leaders: 

Seek out talented workers with a diverse range of backgrounds and develop their potential. Help them to feel comfortable performing in leadership roles by investing in good training and providing them with the knowledge, skills and behaviours to progress within the organisation.

Transform digitally:

Invest in digital skills for your employees, providing staff at all levels with the tools and knowledge to maximise their career. Making the insurance sector more technologically advanced will attract more applicants. The bigger the talent pool, the more opportunity you have to recruit a diverse workforce.

Gain support from external groups:

There are a number of networking groups that specifically offer support to the insurance sector. These include:

Link – LGBT Insurance Network

GIN – Gender Inclusion Network

iCAN  – Insurance Cultural Awareness Network

ACIN – African-Caribbean Insurance Network

Corndel is experienced in working with large organisations to align L&D and Talent strategies with the wider goal of Equality, Diversity and Inclusion. If you’d like to explore how you can use the Apprenticeship Levy to shift the dial on diversity within your organisation, please reach out.