Female workers earn almost 40% less than their male counterparts and they are still underrepresented in the industry’s leadership positions. Yet, most men remain skeptical about the existence of a lack of gender parity
Does the insurance industry have a gender gap problem?
According to the Oxford English Dictionary, a gender gap is a “discrepancy in opportunities, status, etc., between the sexes,” and going by that definition, it certainly looks as if it does.
Women in insurance earn almost 40% less than their male counterparts, and despite outnumbering men in the sector – with 57% of new employees in entry-level positions being female – they are still underrepresented in the industry’s leadership positions, filling 28% of VP-level positions (one point below the all-sector average of 29%) and only 18% of Senior Vice President-level positions – a full 5% below the all-sector average.
As well as being deeply unfair, the industry’s gender gap is also profoundly short-sighted: there’s plenty of evidence that gender equality boosts economic potential: in fact, the Swiss Re Institute estimates that global labour market gender parity could result in an additional $2.1 trillion in global insurance premiums by 2029. Add to this the invaluable insights into consumer behaviour that women provide and the research showing how diverse teams are more effective at tacking complex problems and reaching across markets and customer segments: put bluntly, fewer women in top jobs means that the industry is missing out on critical sources of talent and income.
Yet studies show that most men – as well as a surprisingly large number of women – continue to remain skeptical about the existence of a lack of gender parity. It’s increasingly clear though that if the industry wishes to continue to grow and maintain its competitive edge, insurance companies need effective and diverse teams at all levels. And that means more women.
So how do we go about tackling the problem?
The first step towards fostering gender equality is for company leadership to explicitly state that it is an issue that matters to them – presenting this as the management’s position will help ensure that it’s taken seriously. Changing behaviours and ways of thinking is a slow and complicated process, and requires constant reinforcement, so leaders must underline the concept on a daily basis, both in the way they work and in the methods they adopt.
Less than 10% of insurance companies currently have formal programs in place to help women develop strong careers. Many companies have adopted diversity training programmes, but while there’s no doubt these can be beneficial, improving gender diversity in insurance means undertaking targeted, sustained initiatives to tackle bias in areas like hiring, promotion, performance assessment and the way projects and opportunities are allocated. The 2017 McKinsey and LeanIn.Org Women in the Workplace study showed that companies which implemented gender equality and diversity strategies made improvements to the way their talent pipeline worked three to four times faster than other companies.
Formal sponsorship programmes should also be implemented to create a level playing field and to identify and promote talent more equitably. These programmes should include structures to enable sponsorship but also to reinforce the expectation that leaders are accountable for ensuring talented women in the organization are sponsored.
Mentorship is vitally important: mentor-mentee relationships that foster support for women in the insurance industry help them create solid formal and informal social networks and consequently increase their upward mobility. Along with programmes to develop, support and encourage female leaders, women see mentorship from senior leaders as the best way to advance women into leadership roles.
The 2018 “Women in Insurance” white paper found that there had been a 48% increase in representation since 2013, and a 98% increase in top executive positions held by women. That’s a step in the right direction for women and for the industry as a whole, so let’s hope that more companies continue to do what’s necessary to increase the number of women in senior leadership roles.