EXCLUSIVE: ‘Big Table, Few Seats’ – Aniqah Majid, FF News in ‘The Insurtech Magazine’

Aniqah Majid asks why, even now, there are so few women in positions of influence in the insurance industry.

Though it fairs better than most industries in the race for gender equality, insurance has a long way to go before it reaches any sort of finishing line. Women make up a sizeable chunk of the industry, yet its reputation for inclusiveness is less convincing the further you look up the organisation. Be it due to pay disparity, unsuitable work environments, or a culture that fails to incentivise female talent, women are thin on the ground when it comes to positions of influence among both incumbents and insurtechs.

According to data from Statista, full and part-time working women averaged around 45 per cent of the overall UK insurance workforce in 2021, the sample coming from the HMRC Pay As You Earn records.

Women dominate the industry in the US. In a 2018 report from Million Women Mentors, Women in Insurance: Leading to Action, they accounted for around 60 per cent of the workforce every year since 2007. This number consists of insurance claims and policy clerks (86 per cent), underwriters (62.5 per cent) and claims adjusters, appraisers, and investigators (62.2 per cent). Compared to women’s representation in the general US workforce (46.8 per cent) the figures look healthy. However, you have to look harder to find women in leadership roles.

A 2021 report from SwissRe – Gender Diversity In The Re/insurance industry: For A Sustainable Future – found that, globally, women made up 23 per cent of C-suite executives, 10 per cent of CEOs and eight per cent of board members in the re/insurance industry. Data a year ealier from the London Market Group looking into the balance of men and women in London’s specialist insurance and reinsurance sector showed that in 2020, 29 per cent of re/insurers had no women in what the FCA calls ‘controlled functions’, the most senior jobs in the industry.

At the time, LMG’s chairman, Matthew Moore called the findings ‘disappointing’ and pointed to a waste of female talent, saying it was ‘inadequate to the needs of our industry going forward’. He also said The London Market was ‘energetically and transparently seeking to remedy the gender gaps’.

“There has been a lot of talk about the fact that, for all its progressive attributes when it comes to diversity, insurtech has the same issues as the mainstream insurance market,” said Jennifer Hurst, the Sales Director – EMEA at Charles Taylor, a UK insurtech providing claims solutions and technology to the global insurance market. “A cursory look at many of the leading insurtech players indicates many of the senior positions are held by men.”

Even now, the succession of a woman CEO or board member is heralded as an industry first, instead of standard practice.

This August, the century-old Protection and Indemnity insurer, American P&I Club, will welcome its first female CEO Dorothea Ioannou, moving on from her previous position of Deputy COO. You can’t take away from Ioannou that it’s a fantastic personal achievement. But even she acknowledges that the appointment of a woman is a phenomenon rather than a standard practice.

On her appointment, Ioannou said: “I am thrilled and excited with this new appointment, which as a woman carries with it not only responsibility and significance for our organisation but also, as a first in the P&I sector, for the marine insurance industry in general.”

So, why are women being made to etch on the glass ceiling for a seat at the table, given that there’s plenty of evidence to suggest their presence in the corridors of power has a direct impact on the bottom line? That earlier SwissRe report found that re/insurers with a higher proportion of women in C-suite and board positions outperform others by three to four points of return of equity (ROE).

There are several theories as to why women at the top equates to enhanced financial success, but could it be because they tend to create a more positive and therefore more productive culture down the organisation? McKinsey found in its 2021 annual “Women in the Workplace” report, that employees felt female managers supported them the most in the pandemic year, from providing emotional support to checking in on their overall wellbeing.

In the retail insurance market in which women buyers are growing exponentially, the lack of women in leadership positions is even more of a puzzle, given that they instinctively connect with at least half the customer base.

A 2015 report from IFC ‘She For Shield: Insure Women to Better Protect All’ found that by 2030, women will earn the insurance industry $1.7trillion, the majority of growth coming from the Life and Health sectors. The report, which sampled women across the world, from Brazil, Morocco, Thailand and Nigeria, saw that women’s income around the world has increased, and with it a desire to protect what they have with insurance.

According to the report, women want options and variety, whether they have a family or not. Transparency with their insurers is a priority, and they are more loyal to insurers who understand what they need.

Insurance catering to women is not a new concept. Scottish Widows was set up in 1815 to take care of women and children who lost their fathers, brothers and husbands in the Napoleonic Wars. More recently, car insurer Sheila’s Wheels was founded on the back of research that discovered women have different needs to men when it comes to cover, particularly around possessions and what they carry with them. On the flip side, men pay 26 per cent more for their insurance than women, according to research from Money Supermarket, due to factors such as occupation and their tendency to buy more expensive motors.

The difference in behaviour and attitude goes to show that when it comes to insurance, of all types, women want different things – in some regions, even down to who introduces them to the policy. A 2020 study carried out in the Democratic Republic of Congo from the World Bank, ‘The Role of Gender in Agent Banking’, found women were more likely to adopt digital financial services through the council of a female agent.

“Diversity brings in different viewpoints, and thus different ways of solving problems – whether it is sales, claims, analytics, product or regulation,” says Renu Ann Joseph, the Founder and CEO of data analytics insurtech, Luminant Analytics. “As my website says, ‘old ways will not open new doors’. Insurance needs to be able to open new doors to stand up to competition against tech companies, and to attract talent. Diversity is a big driver of that openness.”

A former analyst and VP for SwissRe, Jospeh is currently also Head of Virtido’s Centre for Data Science and AI. Industry is aware of the lack of diversity and is actively moving to combat it, she says. What they are working out now is how to do it.

A good place to start maybe is to address the gender pay gap.

Findings from the Chartered Insurance Institute show that the pay gap across 199 insurers, brokers, financial and other insurance-related firms was around 24 per cent in 2018 – double the national 12 per cent median across all industries. Three years later, figures from Statista put the mean gender pay gap of full-time employees in the financial and insurance sector in the United Kingdom even higher, at around 26.5 per cent.

There’s no reason, of course, why women shouldn’t found their own insurtech. But, according to data from Crunchbase on insurtechs founded or co-founded by women, there are only 162 of them, which raised a total of $2.6billion in funding rounds to March 2022. That’s out of 655 insurtechs whose funding rounds captured $16.2billion.

According to Joseph: “Looking at the statistics for company performance, we find that [all] companies with female founders perform 63 per cent better than those of their male peers. Performance being of key interest to potential investors, it remains a bit of a mystery as to why there is still such a male pattern to investments.”

She points to three startup insurtechs that were acquired or placed into run-off in 2020 – Brolly, founded by Phoebe Hugh, Coverly, started by Jodi Cartwright , and Buzzvault, led by Becky Downing. Would they have attracted investment to continue longer had they been run by men?

In March this year, the Million Women Mentors Women in Insurance Initiative (WII) announced that it will be conducting its second data collection effort, calling on insurance companies to offer up their information on employee demographics, accounting for gender as well as race. Its previous exercise revealed groundbreaking insights, from pay gaps to employee loyalty.

It will be interesting to see what progress – if any – has been made in the past four years.

This article was published in The Insurtech Magazine #07, Page 49-50