Sophia Yen is a Principal and is the Insurance Strategy & Innovation Leader in EY’s Insurance Advisory practice.
Taking stock at a recent gathering of approximately 125 top industry leaders, I saw more women than there would have been 20 years ago — but our numbers were still shockingly low.
While this demographic was disappointing, it reflects today’s reality: though the gender gap narrowed slightly this year according to the World Economic Forum’s The Global Gender Gap Report 2018, women today still comprise less than 5% of the industry’s C-suite and boardroom positions. What doesn’t add up is why. Numerous studies show that greater gender balance in corporate leadership correlates to higher stock value and profitability. Still, companies continue to miss out on a major growth opportunity.
Our study with the Peterson Institute for International Economics found that an organization with at least 30% female leaders could add up to six percentage points to its net margin. Greater diversity also fuels innovation, which is so key to insurer profitability that A.M. Best now factors it into its assessment of a carrier’s long-term viability. Under inclusive leadership, employees are 3.5 times more likely to contribute to the full innovation potential and 39% more likely to be engaged.
Why aren’t there more women leaders in insurance? Nearly half of those responding to a recent EY poll point to culture as the biggest barrier to more women in the boardroom. Women comprise nearly half of the insurance workforce of mid-level management, but their numbers drop precipitously at the C-suite level. By bridging this gap, insurers could significantly improve their business results.
Making it happen
Progress in gender diversity comes only with deliberate effort, driven by both women and men. It happens when and where career paths are cultivated and nourished, formally and informally, by individuals and organizations. And there must be real accountability for the diversity and inclusiveness (D&I) results.
Three actions are critical.
1. “Institutionalize” sponsoring, mentoring and career development for women.
The familiar refrain, “We wanted to hire or promote a woman executive, but we couldn’t identify one who was qualified,” is a tough message to process. We all own the responsibility of creating a pipeline and succession of talent with the skill sets and capabilities to perform the top jobs. Whether your organization relies upon formal or informal programs, this is crucial. We’ve seen proven results in high-performing firms and inclusive cultures.
2. Encourage male leaders to act as “sponsors” of women and women to focus on the attributes that further their successful paths.
As sponsors, today’s senior executives can channel their experience and clout to advance the career paths of their female protégées. Nearly 70% of women with sponsors report being satisfied with the rate of their career advancement. I’ve personally benefited from incredible male sponsors and mentors throughout my career, and I still do. These influencers made it clear they did not invest in me because I am a woman, but because they recognized my talent and potential for success. This is an important takeaway: do not expect advancement because you’re a woman. Focus on demonstrating your skills and how they will add value to the business by making a difference in the market. Do this and you will always have a seat at the table and, perhaps, even at the head of the table.
Men and women should mentor and coach women, both inside and outside of their companies, sharing experiences and insights. When they reach out across their differences — not only gender, but also different generations, backgrounds and ethnicities — executives not only help their company’s balance sheet and shareholders, they expand their own perspectives, knowledge and skill sets. Most importantly, the collaboration sparks new and more innovative ideas and services for our industry.
3. Re-evaluate recruiting and succession planning with D&I in mind.
To enhance diversity, companies need to look beyond their usual recruiting channels. They should also try to recruit women with backgrounds in science, technology, engineering, the arts and mathematics, as well as liberal arts majors.
Take a clear-eyed look at your company’s current senior leadership. If diversity is lacking, the succession planning should be re-engineered. Be wary of the unconscious bias of teams to promote or hire people who look just like them. Until they take stock, companies may not even realize they have a tradition of hiring new leaders with the same background and profile as previous ones. The focus instead should be on identifying individuals with specific skills that will drive the company’s overall success. Here, data and analytics can be game changing by helping companies to unearth historical patterns of bias and identify equally qualified candidates who may otherwise be overlooked due to biases.
Once change happens
When women do rise to the upper echelons of the industry, they can face unique challenges. There are biases — both latent and blatant — that cause female actions and behaviors to be labeled differently, and detrimentally, compared with those of men. Compensation for women executives consistently lags behind that of their male counterparts. These biases must be recognized and overcome with awareness, transparency and, ultimately, action.
In addition, with few female leaders in the industry, it can be lonely at the top. It’s important for women leaders to find their “pack and tribe” to build their own personal board of directors. They need to surround themselves with people whose perspective and counsel they value, both in formal and informal environments. They need to find safe sounding boards, compatriots — sometimes even competitors — with whom they can network, share successes and failures, and work together to shift perceptions and eliminate unconscious biases.
The business case for moving more women into leadership posts is clear. Sameness perpetuates sameness — in ideas as well as business performance. Achieving greater gender balance is not about checking boxes on a D&I scorecard. For an insurance industry challenged by disruption, with declining net income and increased pressure to innovate, advancing more women into the boardroom is an economic imperative.