Cover story: Women in re/insurance
06 January 2014
Feature: Sexism in the insurance industry might not be as rife as in days gone by, but equality is still far off, and there are plenty of things that employees as well as employers can do to improve the situation.
The insurance industry does not have the best reputation for gender equality. To cite one well-known low point, a London market insurer settled out of court in 2002 with a female employee who had claimed that the firm’s then CEO had barred her from a meeting, remarking blithely: “We are discussing something we decided when you were having babies.”
Skip forward a decade and, despite landmarks like Inga Beale taking the top job at Lloyd’s, the figures show there is still a long way to go before gender equality in the boardroom reaches anywhere near parity.
US business in general has seen a rise in top women taking up leadership positions within major corporations, but the speed of change has been much slower than that for which many had hoped.
A report by government research firm GMI Ratings has criticised the lack of women on boards and in senior management positions within the United States.
“The United States has seen little progress on boardroom gender diversity for more than a decade.
Since 2001, the proportion of S&P 1500 directorships held by women has risen by fewer than five percentage points,” states the report. “In light of research linking board diversity to improved oversight, decision-making, and corporate performance, many investors have been seeking ways to accelerate the pace of change on this issue.
“Recently, a number of advocates have cited long director tenures as one obstacle to increased diversity: it is difficult to add more women (or members of other under-represented groups) to boards if there are few open seats to begin with. Many investors are also concerned about long tenure in itself, fearing that the relationships directors form with management over time may weaken their objectivity,” continues the report.
The insurance industry is no different, with figures indicating that the gender gap remains wide. Senior industry figures seem to agree that while some work has been done to improve gender equality and diversity, there is still a serious gap in gender representation the higher you go up the management chain.
A Saint Joseph University study of 100 insurance companies in the US revealed that only 12.6% of senior management jobs in those companies were filled by women.
These roles included departments such as human resources, communications and legal, but for a core board-level position, such as chief operating officer, the figure fell to only 4.5% filled by women.
Out of the 100 companies, only one had two or more women in a leading business role in the company and 87% of them had no women in a senior core business role.
According to Seraina Maag, chief executive of North America property and casualty at XL Insurance America, women must first be performing roles with a defined profit and loss (P&L) responsibility in order to gain the necessary recognition to propel them into senior leadership roles in the business.
“The most important thing [to advance as a woman in the industry] is to get P&L responsibility,” she says. “If you’re in a support function, you’re not going to get to the corner office, so you really need to understand P&L and what drives the economics of the business.”
Pina Albo, President of Munich Re America Reinsurance, agrees.
“If you want to rise through the ranks of the business it is important to understand the business and to do so not just from a silo perspective, in our industry you have to know underwriting you have to know finance and you have to understand regulatory issues,” she says. “It is the importance of understanding the depth and breadth across the business and this is a critical factor for success.”
Lack of P&L responsibility for many women is reflected by the fact that only 6% of companies have a female top executive. When the survey was taken there was only one female CEO among the insurers polled, Lori Fouché at Fireman’s Fund, although she departed from the company last month to join Prudential Group Insurance as president and COO.
According to the SJU survey, there were no senior women performing a business function among the firms surveyed, with just over 5% of functional roles in that market being held by women. The life industry had the largest percentage of women performing integral business roles, but this was still under 10% of the companies surveyed.
Another barrier to gender equality is women struggling to climb the higher rungs of the career ladder. While there seems to be a steady number of women joining the industry, the balance at the top remains disproportionately male.
Patricia Henry, executive vice-president of government affairs and legal at Ace, spoke to Reactions at the Insurance Industry Charitable Foundation’s (IICF) Women in Insurance Global Conference in June. She says that there still remains a fundamental problem of women not getting promoted to the senior level management positions in the industry, and that many women are being promoted readily through insurance companies until reaching the more senior roles.
“Once you’re in the industry in the first ten years of your career people can move up through hard work and good results to maybe manager, director maybe vice-president level, where you start to see less representation is at the senior vice-president, executive vice-president, president of divisions and all the C-suite offices,” she says.
“Yet we know that we started out with about 50% women so we do need to take a look at what happens there and why the pool doesn’t move up at the same rate for men and women.”
The US Bureau of Labor Statistics has some startling figures. The number of women aged 20 and older not in the US labour force has risen from 40m in 2000 to 49m today. The body says 315,000 left the workforce in March alone.
It has often been perceived to be the case that many women have felt that they need to choose between a family life and a successful career, particularly as they get slightly older, and this is evident in the insurance industry.
Erin Hamrick, a founding partner at recruitment firm Sterling James, says that companies can do more to provide women with the flexibility to balance work and family, ensuring that fewer females feel it necessary to sacrifice career for family.
“When you are in an environment that is predominantly male they are going to look at how they manage their life which is very different to a woman, if she happens to be single it’s one thing, but she may not be, she may be married with a child,” she says.
“So organisations have to evolve to allow and protect that woman so they can say to her “maybe you don’t want to take nine months off; maybe you want to take a year off; maybe you’re not taking the whole year off but will work part time” so not getting them to the point that they opt out because there is a fair number of women who get to the point at a senior level where they just opt out,” adds Hamrick.
Joan Lamm-Tennant, global chief economist and risk strategist at Guy Carpenter, thinks it is crucial for companies to manage the life cycle of all their employees. She notes that this is especially true if firms are to retain higher numbers of women at the middle management level, as a precursor to expand the number of women in executive positions.
“Companies must realise that a life cycle involves the need for flexibility for many reasons – the desire to pursue advanced education, an entrepreneurial venture, aging parents, children and more,” she says.
“This need is evident among both men and women; by understanding and potentially accommodating an employee’s life cycle, firms will build engagement, productivity and loyalty. When managing a person throughout their life, recognise that differences may exist between men and women depending on their life choices.”
She continues: “There may be a period in time when personal demands take priority in life; sometimes by choice and sometimes by happenstance. By developing a culture that values the employee throughout his or her life cycle as well as respect when an employee requests interim adaptability, the firm will ultimately achieve diversity in executive positions – diversity on many fronts, including life experiences.”
While cultures still need further change at a corporate level, could women be selling themselves short via some self-fulfilling prophecies in their own professional ambitions and prejudices? Warren Buffett, commonly regarded as the world’s most successful investor, put forward this suggestion within a recent essay, published in last May’s Fortune magazine.
“Too many women continue to impose limitations on themselves, talking themselves out of achieving their potential. Here, too, I have had some firsthand experience,” wrote Buffett. “Among the scores of brilliant and interesting women I’ve known is the late Katharine Graham, long the controlling shareholder and CEO of the Washington Post.
“Kay knew she was intelligent. But she had been brainwashed, I don’t like that word, but it’s appropriate, by her mother, husband, and who knows who else to believe that men were superior, particularly at business,” Buffett added.
Deborah Aldridge, chief administrative officer at Farmers Insurance claims that there needs to be a move to instil women with greater confidence at skills and areas still seen as male preserves, making them better equipped to better exercise self promotion to achieve their business goals.
“Women are still much more inclined to think ‘If I keep my head down and do a great job then great things are going to happen for me’, and the research shows that they view self promotion, and letting people know what they’re capable of, as uncomfortable and too opportunistic,” she warns.
“So we need to help them understand that that is not the case and that they may be operating at a disadvantage in the fact that they don’t make their voices known and that they don’t have an interest in the room and they don’t become visible too others,” says Aldridge.
Inga Beale, newly appointed CEO of Lloyd’s, emphasises that women should not be afraid of speaking up in front of their peers to become more visible within an organisation.
“When I started out in the London market I tended to take on male behaviours, because I was surrounded by men, so I thought I have to behave like they do to be accepted. The world has moved on, thank goodness,” she says.
“So I don’t think women have to try to be like men any more, which is great. They should be themselves. But they do have to have courage to speak out and push back. And often you will hear comments and see behaviours as a woman that you won’t like and most of the time the man does not realise that it is offensive or seen as a bad behaviour.”
Her solution is as direct as it is simple. “So just tell them. I think we shy away from telling them because we are scared of the repercussions and that they will label them as some kind of feminist,” she says. “But I think honestly that it’s about being honest and open and saying it in a way that is not threatening because most people just don’t know, they don’t know they are being offensive.
“Very senior people who run mega companies will say something and I am thinking: ‘How can you say that? How can you be unaware?’ So I have to tell them that from the perspective of a woman that is offensive. So I would give that advice to women to just start speaking out. And you have to be tough,” adds Beale.
Albo at Munich Re feels that gaining greater visibility in an organisation represents the key to success whatever your gender and she stresses it as an obvious way of getting ahead in the industry.
“Visibility [is an important factor for success], by this I mean having the confidence or courage to raise your hand, express your desire take on a project, take on additionally responsibilities, make your desires be known and sometimes quite frankly this involves leaving your comfort zone, it involves taking a risk, if the risk is calculated and you apply yourself more likely than not it will pay off for you,” she says.
One suggestion that has been made is that women entering the industry should seek out mentors to help guide them and who has a genuine stake in their career. A mentor also makes it more likely that when promotions are discussed many women in the industry would have more senior management actively supporting their progression in the company and can make them aware of opportunities that arise.
This suggestion cropped up at the IICF’s Women in Insurance Global Conference. Many of the speakers at the event spoke positively about the benefits of mentoring and sponsorship, and how men as well as women can be involved in helping talented women progress through a company, as well as offering more advice on how to self promote effectively and be heard when big business decisions are being made.
In a poll taken at the conference, 90% of respondents claimed to have participated in some manner of formal or informal mentoring. In another poll, 88% of respondents claimed to have benefited from a mentoring relationship personally or professionally. A report by Source Media on Women in Insurance discusses the importance of mentorship for women in the insurance industry.
“Experts agree on the value of executive sponsorship as a channel to accelerate career growth or executive level advancements. Defined as an executive or leader who uses his/her authority to influence the professional advancement of their protégés, a sponsor can help facilitate a woman’s exposure to and placement within the executive suite,” noted the report.
Maag feels that many women in the industry today should be taking a more active role to elevate other women after them, and should be looking at becoming mentors and sponsors themselves.
She says: “I think women can take a role, I take it very seriously being a senior woman and CEO in the industry and there are very few of us.
“We always say you have to send the elevator down and bring other women up, because you had somebody who was your sponsor as well, so by creating more awareness and finding people who are willing to coach and mentor and sponsor women I think is really important.”
At the IICF conference there was a general consensus that women need to be active about promoting the interests of other women. Sterling James’s Hamrick feels that women have previously been not as adept as men when networking with their peers, and that they could do better to promote themselves and female colleagues.
“Insurance is an intangible and the assets are the people and knowledge is king in the insurance industry and what men do so very well is they network, they know each other and they build these relationships that go from business to becoming friends and buddies and what they do is they help each other out,” she says.
“Women are so busy doing their job that they don’t pay attention to networking, so then when a position becomes available and I pick up the phone and I call someone, you rarely get a woman’s name nominated.
“So what I said is that women need to start knowing who the other women are in the organisation and outside the organisation, so when that phone rings the best thing they can do, is say, I have three names for you, and they’re three women,” continues Hamrick.
Albo agrees on the importance of networking for reaching the upper echelons, as well as the risks of neglecting this, stressing the importance of building a close network of contacts.
“It’s your network [that is important], and this is an underestimated asset it is a very important aspect networking, and it is important to develop this network within your organisation, but also outside,” she says. “Very often these contacts end up being future business partners and sources of ideas and opportunities and they are also very important sounding boards.”
By Sam Kerr – [email protected]