Lack of diversity hits companies' bottom line

Step up to the challenge of improving diversity and inclusion, or face the consequences when it comes to your business’s bottom line. That’s the message from the latest report commissioned by Inclusion@Lloyds, ’Holding up the Mirror: Reflections on diversity and inclusion in the Lloyd’s market’.

We are operating in an increasingly complex and competitive global insurance market, and Inclusion@Lloyd’s charter signatories all understand that we need to do more as an industry to attract and retain world-class talent in order to adapt and thrive.

Our new report looks back on 2015 and shines the spotlight on D&I initiatives across the Lloyd’s market, highlighting best practice, lessons learnt and the legacy of the first-ever festival for diversity and inclusion in insurance, Dive In.

It also includes new research from interviews conducted with 40 HR professionals whose organisations have signed up to the Inclusion@Lloyd’s Diversity and Inclusion Charter. It makes for an interesting read. According to the results, more than half believe that there is already a positive D&I culture in their organisation, with a further 37.5% classifying their D&I culture as “improving”.

Carrot and stick

Beyond the ‘carrot’ of improved productivity and greater innovation, there is also a clear ‘stick’ for accelerating progress on diversity and inclusion with 27.5% of companies now aware of clients examining D&I practices as a supplier requirement.

But despite all this, 65% of respondents do not have a dedicated D&I policy in their organisation. For Inclusion@Lloyd’s, 2015 was all about raising awareness of D&I – this year we are focusing on action. Now we have established the starting point with this report, we can gauge what resources companies need to ramp up their efforts on D&I.

Recruitment overhaul

Training and recruitment both need an overhaul in the insurance industry if we are to create a more diverse and inclusive market. Encouragingly, over half the companies we interviewed are planning to increase training on D&I and over 40% will be revising their recruitment policies to incorporate D&I.

Leadership is another area of focus, with respondents noting that demonstrable commitment and full support from business leaders is vital, backed by the understanding that D&I is a business issue, not an HR initiative. Things appear to be moving in the right direction, with the majority of respondents reporting that their senior leaders are engaged in the D&I agenda, of which over half are ‘very engaged’.

Female talent

Gender diversity seems to be the area in which we have seen the most progress, with more employee resource groups, mentoring programmes and external networking set up for women. Our research shows that gender is easier to identify, measure and discuss for most organisations, which perhaps reflects the fact that women are the only ‘diverse” majority – making up 50.9% of the UK population. However, as some of our respondents pointed out, there is a lot more to D&I than gender, so we will be looking to see the similar progress in other areas, such as disability, LGBT issues and cultural diversity.

We were pleased to see that the research confirmed a strong for leadership on D&I issues. Respondents are looking to Lloyd’s to provide resources including best practice, education around the business case, case studies and an overview of what is being done in the market. In the wider world, it has an important role to play in updating the image and public perception of the Lloyd’s market to attract young, diverse talent.

In the insurance industry we are often berated for being behind other industries, such as banking and law, when it comes to D&I issues. But it is fair to say we have now stepped up and we are all working together to bring about change. Insurance needs diversity and inclusion – if we don’t start aiming high in this area we will lose out on talent and as a result we can kiss goodbye to our competitive edge.

This article was first published by Insurance Times, StrategicRISK’s sister publication