- Issues affecting the functioning and culture of firms in the insurance sector may be connected to a lack of progress on diversity and inclusion.
- Gender is only one aspect of diversity but an assessment across insurance firms shows a continued and serious gender imbalance in gender diversity with low levels of women in senior leadership roles and a significant gender pay gap.
- The Central Bank continues to push for improvements in diversity and inclusion to ensure insurance firms sustainably serve the needs of businesses and households across Ireland and beyond.
The Central Bank of Ireland has published ‘A Thematic Assessment of Diversity & Inclusion in Insurance Firms’, highlighting evidence of a lack of Diversity and Inclusion (D&I) in a sample of 11 insurance firms, including some of the largest insurers operating in Ireland.
The Assessment took into consideration insurance firms’ policies, procedures and practices, as well as their approaches to monitoring progress on D&I. Remuneration of men and women was also examined and an analysis was conducted into pre-approved control function (PCF) applications received by the Central Bank between 2012-2018.
Among the key findings and observations arising out of the Assessment are that most entities do not have a D&I strategy and where there is a D&I strategy, it is not clear how this strategy is aligned to the overall company strategic objectives. Most firms are not sufficiently prioritising D&I and considerations of diversity and the overall effectiveness of boards and senior executive teams is not sufficiently evident in senior recruitment and succession planning.
In addition, there is clear evidence of significant gender pay gaps in most firms. While women accounted for 51% of the total workforce, they represented only 24% of top 10 earners across the sample and accounted for 34% of the upper pay quartile. Between 2012 and 2018 only 21% of applications for senior roles submitted to the Central Bank for approval were from women.
The Central Bank has issued a Risk Mitigation Programme to each of the 11 firms included in the Assessment requiring them to submit a detailed action plan to address the firm specific issues identified and to ensure these issues are appropriately addressed. It will assess the actions planned by the firms and the extent of progress towards meeting the Central Bank’s expectations.
Arising out of the Assessment, Deputy Governor for Prudential Regulation Ed Sibley noted: “There are clearly issues affecting the functioning of the insurance sector and the culture of firms within this sector. While causation is difficult to determine, the lack of progress on diversity and inclusion in many insurance firms is connected to these underlying issues. Improving diversity and inclusion at senior levels can play a part in improving the culture and functioning of individual firms and the industry as a whole.”
Deputy Governor Sibley went on to say “Some progress is being made in terms of insurers recognising the importance of diversity and inclusion. However, progress is too slow. The lack of join up between diversity and inclusion policies and decisions being taken at the most senior levels of firms is striking. While gender is only one aspect of diversity, it is an important and measurable one. There remains a serious imbalance in gender diversity across the insurance sector, with low levels of women in senior leadership roles and also significant gender pay gaps across the firms sampled. The inadequate focus on diversity in all its forms in succession planning and the absence of plans to solve remuneration issues need to be addressed.”