Insurers urged to undertake review on gender diversity

The Association of British Insurers (ABI) published a report last week which highlighted the lack of women occupying senior jobs in the insurance and long-term savings industry.

While firms are doing a "good job of attracting women", the proportion of female employees falls by 60% between entry and senior levels of organisations in the industry, the report said. Motherhood was identified as the single biggest factor behind the lack of women in top jobs.

To care for children, mums often move "require flexible working arrangements", but research by the Institute for Fiscal Studies has found that women that move to "reduced hours" are "very unlikely" to "progress in terms of wages or promotion", the report prepared for the ABI said. Mothers also have to overcome unconscious bias where they are perceived as "less competent and committed than non-mothers", it said.

The "seniority gap" is recognised by many insurers, with the gender pay gap reports submitted by companies across all sectors showing "a very large number of interventions", the study commissioned by the ABI found. However, the report said there is "a substantial mismatch between what companies are doing [to address the issue] and what works".

The report called on insurers to "make it easier for part-time or formerly part-time employees to advance".

"This can be achieved by: making more senior jobs explicitly available part-time; having more standard flexible working practices that are advertised, encouraged and implemented; making job shares easier and more attractive; allowing more rapid advancement opportunities for women who worked part-time once they come back to full-time work. Particularly if they were considered promising or exceptional before going on maternity leave," the report said.

Financial services employment law expert Jon Fisher of Pinsent Masons, the law firm behind Out-Law.com, said diversity should be "a key business priority" for all insurers. 

"Studies show that more diverse businesses are more successful, and the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) are putting an increased focus on improving diversity in order to transform the culture in financial services," Fisher said. "The principal cause of the substantial gender pay gap data in financial services is the under-representation of women at senior levels."

"This report highlights the holistic approach that employers need to take to tackle this issue.  Giving unconscious bias training is not enough – a more fundamental review of organisational structure, career progression and building inclusive leadership capability is required," he said. 

Stuart Affleck, a diversity and inclusion expert at Brook Graham, which is owned by Pinsent Masons, said the consultancy helps clients take a holistic approach to diversity and inclusion, Helping clients "not only look through the employee lens" but also see the issue from the perspective of their customers and the communities in which they are based, he said.

Rules that came into effect in April this year require major insurers in the UK to "consider a broad set of qualities and competencies" when recruiting board members, and have a policy in place to promote board diversity.