The parent trap

The parent trap

The insurance industry’s gender pay gap won’t narrow until systemic barriers faced by primary caregivers are tackled

By Miranda Maxwell

It’s hard to put your finger on exactly why insurance consistently ranks around the top of Australian industries for having the greatest divide between the salaries of its men and women.

The Workplace Gender Equality Agency calculates that Financial and Insurance Services has a total remuneration gender pay gap – the difference between the average male and female salary – of 27.5%.

It’s a confronting number and significantly more substantial than traditionally male industries such as construction, mining and manufacturing. Statistics can of course tell all sorts of different tales. Juxtapose the fact that Suncorp scored 51% for having managerial positions filled by women, the highest of any ASX20 company.

The board of Hollard boasts five women and three men, while its nine-strong leadership team includes four women. The presidents of the Insurance Council of Australia (ICA), the National Insurance Brokers Association (NIBA) and the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) are all women.

The takeaway from extensive conversations undertaken by Insurance News in March to coincide with International Women’s Day – which aimed to better understand the persistence of the pay gap – can perhaps be whittled down to the “two Ps”: parenting and pipeline.

Until child-rearing responsibilities are divided more equally and workplace flexibility permits that – and until the sizable crop of women occupying lesser-paid insurance roles are promoted – the gender pay gap is likely to remain.

Traditionally, lucrative leadership roles in financial services were male-dominated. Occupational segregation is still an issue, with a larger proportion of women performing support roles while men are more likely to occupy the larger paid operational roles. “Wherever the environment is more homogenous and less diverse, influencing change becomes more of a challenge and progress is slower,” says Jenny O’Neill, Hollard’s Chief Governance, Legal, Culture and Corporate Affairs Officer. “A strong commitment to diversity and inclusion is integral to combating this.”

Ms O’Neill tells Insurance News the gender pay gap reflects broad institutional and systemic barriers facing women, as primary caregivers, in the workplace.

Although not unique to insurance, parenthood emerged again and again during talks with industry insiders as being key in salary outcomes.

Women most often take the primary caring role in their families and time out such as parental leave is too frequently viewed as a professional development barrier. This compounds into significant downstream retirement savings gaps between men and women.

“We know this stems from the career breaks women take throughout their careers to raise children and care for family members,” Ms O’Neill says. “Parenting puts additional pressure on women.”

Dianne Phelan, the first female President of NIBA and Group Operations Manager at broker BJS, agrees this is central to addressing the gender pay gap.

“Until we get to the point where men and women equally share that parenting role and have equality in leave around childcare, then it’s going to be difficult,” she told Insurance News.

“Those missed years that women take – being the major child-carer in a lot of households – is a major thing in terms of not being able to further your career and being behind the eight ball.”

Ms Phelan says she’s “disappointed and surprised” that the gender pay gap remains such an issue in insurance. “A lot of that comes down to the inequality in leave between the mothers and the fathers. The mums just historically take on that role.”

“Parents are parents,” she says, and both should enjoy the same sort of benefits.

Employers can help by being transparent about salaries and considering pay brackets, which can encourage female applicants to negotiate their wage by indicating reasonable expectations for a particular role.

Ms O’Neill agrees transparency, representation and visibility are key, and says that when women “go out there and make their voices heard, more women feel empowered to join them”.

“The solutions require committed efforts across the board,” says Ms O’Neill, who recalls that 14 years ago she was promoted into a senior leadership role by Hollard Chief Executive Richard Enthoven while she was heavily pregnant at the age of 30.

Companies like Hollard are “leading from the front” to eliminate systemic barriers, for example with its female-dedicated Aspire Women Leaders Program, a year-long career development course tailored to female insurance brokers.

“I am so genuinely proud to be part of a company that is bucking the trend with more female than male directors of the board”, she says, noting that such developments are “profoundly inspiring” for people across the business to aim to “be what they can see”.

“Workplaces need to normalise and support men sharing parental/carer responsibilities,” Ms O’Neill told Insurance News. “We need to challenge the idea that parenting is detrimental to professional development and remove systemic financial penalties such as disparities in retirement savings.”

Hollard – which placed second of 500 companies in HBF’s 2020 “Top Australian Workplaces for Dads” report – has a gender-neutral policy of 18 weeks paid and 52 weeks unpaid leave for every new parent, with superannuation paid throughout.

More can be done by insurance decision-makers to remove systemic barriers, starting with ensuring equal pay with like-for-like analysis – an initiative undertaken at Zurich – and ensuring also that women are paid comparably against market rates.

Ms O’Neill says insurers should consciously tackle unconscious bias in hiring and pay decisions and promote a female talent pipeline to funnel young women into roles that attract higher wages.

Creating quality flexible jobs that allow women and men to balance their ambitions with caring and other responsibilities, especially in senior roles, and celebrating wins and success stories are other steps she suggests.

The Australian Bureau of Statistics (ABS) releases its own workplace figures twice a year which reflects all employers, including the public service. That’s different to the Workplace Gender Equality Agency figures, which are updated only once a year and encompass public firms with more than 100 employees – or around 40% of Australia’s workforce.

An ABS update provided in February shows the Financial and Insurance Services sector gap expanded by 1.4 percentage points to 23.6% over a year to be wider than construction (16.4%), mining (14.8%), manufacturing (12.6%) and all other industries except professional, scientific and technical services.

Committed to the cause: Hollard’s Jenny O’Neill

Two years ago, economist Conrad Liveris analysed company disclosures and ABS data and found there were more chief executive officers named Andrew leading ASX 200 companies than there were women, who made up 5.5% – the same percentage as bosses named Michael.

Seventy percent of chief executives were promoted internally and 27% studied engineering.

Mildly encouraging is the Workplace Gender Equality Agency’s comment that it’s watching to see if Financial Services and Insurance will be knocked from its dubious place at the top of the pay gap perch at its next update, as the gap has decreased year-on-year since 2013/14.

There have been large gains in the number of employers with targeted policies in place to support gender equality in succession planning, retention, talent identification and promotions.

“Current activities take time to work through the pipeline,” Ms Phelan says. “Insurers and brokers are doing a lot in that area but it will take some time to see that translating into opportunity.”

Major brokerage Marsh told Insurance News that in the Pacific region it has seen an increase in the representation of women in management roles and it regularly conducts remuneration analyses.

“We have made a global commitment to increasing the representation of women in leadership, and are actively working to identify and eliminate barriers to career progression,” a spokeswoman says.

“We recognise that a culture of inclusion also requires a focus on equity – getting to the root causes of why imbalances exist, and actively working to remove those barriers.”

Suncorp is working to embed its commitment to gender diversity across recruitment, flexible working options, development, remuneration and maintaining gender-balanced representation across leadership.

The giant insurance and banking group marked International Women’s Day with a thought leadership panel featuring Group Chairman Christine McLoughlin. The discussion noted Australia’s poor ranking on the World Economic Forum’s Global Gender Gap Index, which ranks Australia at 44 out of 153 countries, down from 15 when the index began in 2006. New Zealand ranks sixth and Iceland first.

Suncorp Chief Executive Insurance Product & Portfolio Lisa Harrison has two daughters who are not yet teenagers, and tells Insurance News maternity leave improved her problem-solving and prioritisation skills.

“While I was away from the workplace I missed out on valuable professional experiences, but … my time management skills increased ten-fold after becoming a mum,” she says.

Ms Harrison advises both men and women to use the skills acquired through parenting as a strength in the workplace.

“Normalising flexibility will be a key enabler for organisations to bridge the gender gap and boost opportunities for women,” she says.

Ms Harrison, who started working in the insurance industry in the 1990s “when gender equality was not a topic of conversation”, says the “tone from the top has never been louder”.

“We have some incredible and respected leaders who are part of the Insurance Champions of Change group pushing for equality in their own companies and across the industry.”

At Aon Affinity, Managing Director Lisa Henderson says she has 50/50 gender representation on her leadership team. She says attracting top talent, particularly from the next generation coming through, requires a readiness by the executive team to be open to diversity of opinion.

“The insurance industry as a whole is still slightly unrepresented in C-Suite positions but…is waking up to the fact that they are missing some great talent unless they have a policy on increasing diversity,” she says.

A pool of talent must be built now from entry-level roles, Ms Henderson says, noting that the insurance industry is increasingly starting to do this when compared with other areas of financial services.

Talking about equality: Suncorp’s Lisa Harrison

“Another way to increase diversity is to offer greater flexibility around key life events as women move through their careers”.

Trailblazer Sue Houghton, who has reached the topmost echelon of insurance as the President of ICA and as QBE’s incoming Australia Pacific Chief Executive, tells Insurance News she successfully navigated her decision to take a career break when her children were little, though it was challenging.

“I’ve worked part-time during my career and I know how hard it is along the way, so anything we can do in that space will be really, really helpful,” she told Insurance News.

“I’ve had very supportive leaders – most of whom have been men through my career – who’ve given me opportunities and have wanted to test how flexible working works – how we bring people back if they take some time out to have children.’”

The Insurance Council now has four female directors, and Ms Houghton says “we need to keep reviewing and work towards that (pay) parity”.

“We are starting to see a lot of female leaders. I’m not going to be the only female CEO of an insurance company, and that’s good to see. The more of us there are, the better for the industry.”

A larger cohort of female junior actuaries coming up the ranks “will start to change the debate,” Ms Houghton says, and she is heartened that more than half the people employed in the insurance industry are female.

“That gives us a great opportunity to have a pipeline of leaders in the future, and the more we can ‘role-model’ that and make sure that that diversity is right the way across our industry, we can accelerate the change,” she says. “It’s a very different world that we’re in today and a much more positive one.”

She says that as the industry restructures after the coronavirus pandemic and transforms its technology, it is important to consider “how we’re thinking about women in that space as well. Flexible work practices are really important”.

“We’ve learned how to work remotely. We talked about that before, but I think we’ve understood it this year. I think that’s a positive for us all.

“I’ve seen young men with babies and toddlers doing meetings because maybe there is more sharing of some of those home tasks when everybody’s at home together.

“When you have got to do school drop-offs and pickups, not doing a commute as well can be very helpful. I think that different way of working will be beneficial in the long term.”

At Zurich, an initiative to advertise its UK vacancies with the option of part-time, full-time, jobshare or flexible working arrangements resulted in nearly 25% more women applying for roles with the company.

Zurich monitors gender representation and has implemented “Equal Pay for Equivalent Work” analysis as part of a yearly remuneration review cycle.

“It helps to create a trusted, diverse and dynamic work environment,” Zurich says in a statement. “It’s simply the right thing to do.”

Ms O’Neill says a career in insurance is “a real privilege” and applauds Hollard’s “family ethos and authentic role-modelling by men in senior leadership positions”, which she says allows the company “to empower men and women alike to take career breaks, focus on their children, and generally achieve better a healthier and more rewarding work-life balance”.

“I’ve always known our industry, for all its setbacks, is a home in which to advance the careers of our most talented men and women,” Ms O’Neill says. “We are seeing the discourse around diversity and inclusion permeating slowly but surely throughout even the most resistant of sectors.”