There is an opportunity for the industry to rebrand insurance in order to encourage school leavers to join the sector
Pressure from the FCA on the insurance sector to unlock a more diverse pool of talent is mounting, yet the industry is slacking when it comes to inclusivity by “not taking on enough” school leavers, according to Marsh UK and Ireland chief executive Chris Lay.
In April 2022, the financial services regulator published a policy statement confirming that listed firms are required to report information and disclose compliance with sector-wide diversity targets, effective from 1 April 2022.
The statement, PS22/3: Diversity and inclusion on company boards and executive management, showcases a “comply or explain” stance. This means that any listed firms unable to meet the regulator’s diversity targets will need to explain why not.
In three years’ time, the FCA plans to review these rules, to determine whether its set targets are still appropriate and whether the desired progress has been achieved.
This change in approach builds on the regulator’s previous DP 21/2: Diversity and inclusion in the financial sector – working together to drive change discussion paper, published in July 2021, which stated that there is a “need” to continue to “focus on how we broaden our talent pipeline”, to achieve “more diverse representation at senior levels” and reduce pay gaps.
The DP 21/2 paper closed for comments on 30 September 2021.
Rather than specifying that firms should have “X number of brown or black people on your board”, this work from the regulator has instead put an emphasis on where firms start fishing for talent because “that’s where the evidence lies and that’s the process you need to follow”, said Padda Consulting founding director Suneeta Padda.
Therefore, to “change the shape” of diversity and inclusion (D&I) in the insurance industry, leaders need to “be honest and search our souls” because “playing musical chairs within [the sector] is not going to work”, added Lay.
He continued: “If we step back and say we really want resiliency, then we need to scale up massively the early careers of our industry.”
The UK and Ireland top boss further highlighted that the London insurance market currently employs 47,000 people, yet he “struggled to get to 1,000” when counting those aged between 17 and 25 when doing research for his upcoming presidency role at the Insurance Institute of London, part of the Chartered Insurance Institute.
Lay and Padda were speaking as a part of a panel discussion at trade association Airmic’s annual conference last week (7 June 2022). They were joined by Crawford and Company global relationship leader Tenesha Frazier-Levett, Aviva group head of talent acquisition Jonny Briggs and Google international risk analyst Soowoo Park.
The session was hosted by Google’s Europe, Middle East and Africa (EMEA) compliance and global helpdesk lead Dexter Tang.
An alien lands…
Seeking to change the current status quo of professionals falling into insurance, Lay told Airmic delegates that he regularly conducts a school assembly in East London.
While visiting the chosen school, Lay said that he usually dressed in business attire and “might even wear a tie”. However, the kids tend to “look and think I’m an alien that’s landed” because London’s business hub is perceived to be “like another world”.
Lay believes the insurance sector has “missed out on so much” by not connecting better with local schools.
Lay, who was raised within an “inner London working class family”, explained that he often felt like a “victim” when starting out in the world of work as he was rejected by multiple firms during his early career, including Marsh.
Once he was in the insurance industry, he said that he suffered from “imposter syndrome” - feelings of self-doubt when others believed the individual to be competent - because of the “overtones” of not being from a similar environment to his colleagues.
Despite this hesitant start to his career, Lay has now succeeded to reach the top of the career ladder.
Frazier-Levett, who was “warmed” by Lay’s career journey, said that insurance leaders “sharing [their] story allows people to feel like they can also ascend to the same level”.
For this reason, she likes to focus on education, so that “when people see the next Tenesha, it’s not something new”.
She continued: ”With success, there is responsibility. My journey with D&I is to support others along the way.
“Many people aren’t as comfortable in those settings and that’s because they haven’t been around people who are different from them, so it’s really educating them, coaching [and] mentoring.
“I want to get to the point where there’s many people of all different ethnicities walking the halls.
“Right now, we’re still in that period where I stand out and others like me stand out in those settings.”
Get sexy, not boring
Briggs, meanwhile, believes that improving D&I across the sector requires “positive action” by setting D&I targets, complete with incentives and consequences.
He also thinks it is important to reach “out to communities to encourage them to join the organisation”, rather than simply implementing diversity quotas and relying on “positive discrimination”.
This view is also shared by industry initiative Race Action Through Leadership, which is developing a talent directory to give leaders access to more potential candidates.
“If you’re not fishing from a diverse pool to start with, you’ve already determined what the outcome is going to be,” added Padda.
In terms of how to make the insurance industry more exciting for school leavers, Park said that one option is to “rebrand insurance”.
She continued: “Why is insurance always seen as not very sexy or boring?
“Everybody on this planet needs insurance, so why can we not make it more fun for young people to be excited about? Risk is everywhere.
“It is a job for us to take our next generation to an exciting insurance world, an exciting risk world.”