Lack of socio-economic diversity threatening inclusion efforts in insurance, say experts

The insurance industry is badly failing to address a lack of socio-economic diversity, experts have warned.

Speaking at the Association of British Insurers’ (ABI) Diversity and Inclusion Conference yesterday (22 November 2022), Catherine McGuinness, chair of the Socio-Economic Diversity Taskforce at the City of London Corporation, said the insurance and wider financial services sectors were failing to attract and progress those from the lowest socio-economic backgrounds.

“To recruit and retain the best talent we need to invite the widest selection of people into our industry,” she explained. “There is a big moral issue here for the insurance sector.

“The financial services sector and insurance as an industry has the worst ratio of leaders who come from the lowest socio-economic backgrounds – it stands at just nine percent from a sector which makes up 30% of the country.

McGuiness explained that those who entered the insurance sector from the lowest socio-economic backgrounds were also progressing 25% slower than their more well off colleagues.

“If we want to be a truly representative industry in terms of one which reflects their customers, we have to address this issue,” she added.

Complex issues

Mary Bright, head of social affairs at the Phoenix Group, who also spoke during the ABI’s conference, added: “I think we have to recognise the complexity of the issues we face.

“Diversity is useless without inclusion. If we can tackle social mobility and look to be inclusive, we go a long way to solving everything.

McGuinness said that the insurance sector could improve its understanding of issues standing in the way of improved diversity by utilising data.

She added that to obtain the data they require businesses, would need to focus on better communicating with staff.

“You need to engender trust in your workforce,” said McGuinness. “It is important because the data you are looking for may well be data that the employees do not want to share.”

Bright said the industry needed to not only collate and collect this data but that, once collated, it had to be published if the insurance sector was to progress in its efforts to imrpove.

“Being open to where we are, will get us to where we have to be,” she explained. “The data might not be what we want it to be, but we have to be vulnerable.”