Diversity and Inclusion is the Key to Innovation in Insurance

By every metric diversity and inclusion (D&I) is good for the insurance industry, whether that’s financial performance, decision-making or innovation. And the more diverse the leadership team, the better the results. Here we look at how D&I within leadership teams fuels innovation and business success in the insurance industry.

The facts and figures

That the effectiveness of D&I is still questioned in the insurance industry belies the reality. It’s a reality that can be backed up with facts and figures, such as:
Diversity drives better financial performance, with diverse teams outperforming their competitors by 35%.
Diversity teams make decisions with 60% better results.
Diversity means that companies are 70% more likely to capture new markets.
Diversity is an important factor for 76% of candidates when looking for a new employer.
Diversity increases innovation by almost 20%.

How can this translate into success?

One of the most important and effective drivers of innovation in insurance is to include women in leadership teams. A 2024 report by Creditsafe examined Financial and Insurance companies and found that throughout the industry only 32% had a female director. When we focus on the insurance industry specifically, we notice that, according to research conducted by employment lawyers GQ Littler, women make up less than 7% of CEO roles, less than 16% of CFO roles and less than 11% of chairperson roles (research relates to 2023 figures, the latest for which we have data).

Clearly, more needs to be done. But what would the results of an increase in women in leadership teams mean for the insurance industry?

Insurance firms with inclusive leadership teams benefit from a range of advantages including: 

• Increased innovation – in a rapidly changing world, insurance companies must adapt to thrive, so creating new and innovative products and services is essential to maintain and increase market share. A diverse leadership team, especially one that contains women, will bring new approaches and fresh ideas and will be able to represent its customer base more effectively, delivering a better customer experience.
• Addressing challenges – the insurance industry faces a range of challenges such as changes to compliance and regulations, cyber security threats, changes in technology (like Lloyd’s of London’s Blueprint Two initiative), financial risks, environmental concerns, and a talent shortage. In each of these cases, inclusive leadership teams enable insurance companies to deal with the challenges they face more effectively and creatively.
• Meeting customer needs – customer needs, and therefore their expectations, are changing. Increased competition, price comparison sites, a greater demand for flexible payments, increasing awareness of sustainability, and more use of technology to interact with insurers all mean that insurance companies must be aware of the wide range of all their customers’ needs, and by making diversity a priority, insurance organisations can demonstrate representation and deeper understanding.

How can diversity and inclusion be achieved?

Great strides have been made by the UK insurance industry over recent years in terms of D&I and specifically gender parity at a senior level. However, more must be done, particularly: 

• Leveraging technology to analyse employee data, set measurable diversity goals, and remedy biases in the recruitment process
• Creating a welcoming and inclusive workplace culture that reflects the aspirations and reality of the UK population
• Initiating mentoring programmes so that women can set an example to other women in the industry.

Women bring a unique contribution to leadership roles within the insurance industry, offering empathy, enhancing organisational adaptability, and demonstrating resilience. In order to drive further innovation and business success the industry now needs to make greater progress in its inclusivity practices, recognise that DI& is key to innovation and excellence, and welcome the contribution that women leaders make.

For more information about any of the issues we’ve discussed, contact us here.

Mentorship

We’ve looked at the role of mentorship previously and examined the benefits it brings to women in insurance. It’s one of the most effective ways that early-career women can advance and one of the most rewarding things more senior women can do to assist others in their rise. Organisations should be developing mentoring programs that are both cross-departmental, and experience-led. However, for this to happen, more needs to be done about allowing women time to mentor and be mentored, encouraging women to pass on their expertise, not just in their specialist area but also in core leadership skills, and developing a culture of mentorship in order that women can support other women. 

Yvonne Hill-Planter, a pioneering women in insurance, and currently Director of Claims – Programs & Captives at Skyward Specialty Insurance, has written eloquently about the importance of mentorship and how the empowerment of women benefits everyone.

Why does all this matter?

Gender-diverse leadership contributes to more than just improved corporate performance. The business case for empowering women in insurance leadership includes the following:

• Improved financial performance – leadership teams that include women outperform those that don’t. They make more incisive strategic decisions and identify new market opportunities which leads to higher profitability.
• Innovation – women offer different perspectives from men and offer new ways to solve challenges. By having women in leadership positions insurance businesses can maximise performance and meet and exceed financial targets.
• Employee satisfaction – organisations that have women leaders are not only more attractive to potential employees but also offer greater levels of satisfaction to current employees. Diversity contributes much to a healthy, happy working environment, and to making employees feel valued. 

By all metrics women leaders in the insurance industry offer the sector an advantage which a homogenous approach clearly lacks. Diverse leadership teams can drive organisational adaptability and champion cultural shifts within the industry, creating much-needed change that sets the tone for a bright future for the industry.

For more information about how your organisation can implement the changes it needs to ensure a brighter future, contact us here.