Diversity, equality and inclusion (DEI) in insurance
The insurance industry, often perceived as a bastion of tradition, is undergoing a seismic shift. Diversity, Equality and Inclusion are no longer buzzwords. It doesn’t matter which business function you work in, it is a business imperative. So, what does tangible progress actually look like?
The three key questions we will address in this article are:
- What does an effective DEI strategy look like?
- How can we measure the true impact of DEI initiatives?
- Do DEI initiatives genuinely drive business performance?
To answer these questions, let's look at some data. Mandatory gender pay gap reporting from 2017 onwards has revealed a slow but steadily decreasing pay gap across the financial and insurance sector. While racial diversity has improved over the last decade, the recent pandemic has slowed, if not reversed this growth in the wider financial services industry. Research published by the ABI has revealed that ethnic representation has fallen from 16% in 2017 to 9% in 2021.
A truly effective DEI strategy needs to go beyond representation, and a tick-box exercise. An effective strategy is about creating an inclusive culture where every team member feels valued, respected and empowered to contribute their best. It is also about ensuring DEI principles are embedded into every aspect of the business, from recruitment and development to leadership and customer service. Flexible work arrangements meet the needs of carers and those with dependents. Establishing cultural and religious networks at your firm e.g. can promote cultural education and foster teamwork and harmony.
Measuring the full impact of DEI initiatives means looking beyond headcounts and pay gaps. By conducting a DEI audit, you can analyse your firm’s current demographics, policies and practices to identify areas of strength and weaknesses. Metrics such as employee engagement, turnover rates, recruitment data and customer satisfaction can provide valuable insights. Using these data sets to track your progress and compare it to an industry standard will provide a valuable benchmark. In addition, qualitative feedback through employee surveys and focus groups can help identify areas for improvement. After identifying key areas of development, the next step would be to build a DEI strategy that aligns with your business goals and includes clear, measurable targets to assess the success of your efforts.
Ultimately, the true measure of a successful strategy in addition to employee satisfaction is the ability to drive business performance. Research published by McKinsey in 2023 suggests that companies with diverse leadership teams are more likely to outperform their peers financially. By fostering a culture of inclusion, the insurance industry can unlock new opportunities, better serve its customers and build a stronger future.
An effective DEI strategy cannot be achieved overnight. By regularly refining your strategy to align with the evolving market, you can ensure your firm is leading the effort to promote diversity, equity and inclusion in the workplace.
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This article was written by Likhitha Kopuru.
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Financial services insights
Expert insights surrounding the financial services sector.