Irish reg’ slams insurers for lack of diversity and inclusion
The Irish regulator has reviewed how 11 local insurers were coping with diversity and inclusion (D&I) matters. The research covered firms’ policies, procedures, practices and monitoring of D&I; an analysis of the remuneration by gender as well as that of pre-approved control functions applications over the period 2012 – 2018.
Said Ed Sibley, deputy governor, prudential regulation at the Central Bank of Ireland, said “there are clearly issues affecting the functioning of the insurance sector and the culture of firms within this sector.” And in his opinion, the lack of progress on diversity and inclusion in many insurance firms is connected to these underlying issues. “Some progress is being made in terms of insurers recognising the importance of diversity and inclusion. However, progress is too slow,” Sibley acknowledged.
The CBI’s report underlined that most entities did not have a D&I strategy. If there was one, it was lacking clarity as to the way it aligns with the overall business strategy. “Most firms are not sufficiently prioritising D&I: Most firms have implemented some D&I initiatives. However, they are typically not tracking, monitoring or assessing the effectiveness of these initiatives,” the CBI’s research stressed.
“Furthermore, D&I was not frequently or actively discussed at Board or Executive Committees (ExCo) level, which indicates that directors and senior executives are not driving initiatives to D&I. The slow pace of change to date is likely to continue without clear strategies underpinned by clear and effective actions, which are tracked against delivery,” the study pinpointed.
Lack of diversity in recruitments
Also Irish insurers do not really see the importance of addressing D&I issues and are not that aware of the risks associated with low levels of diversity, the CBI highlighted. It added that most entities surveyed are neither capturing, nor monitoring or tracking diversity related metrics. The regulator recommended the establishment of D&I goals and targets set by the nomination committee and to be reviewed annually. Gender balance monitoring for succession planning and improvement of the talent pipeline were other avenues suggested by the CBI.
“There is a lack of evidence of diversity in all its forms being sufficiently considered as part of board or executive recruitment. It is not sufficient to have a board diversity policy – it must be applied,” urged the Irish regulator. An example is that female applicants formed only 21% of all applications submitted to the CBI for approval for the most senior roles within the surveyed firms between 2012 and 2018.
Major pay gaps
The study also sheds harsh light on gender pay gaps in the Irish insurance sector where a majority of workers are women (51% of the total workforce). However, they only accounted for 24% of the top 10 earners and 34% of the upper pay quartile. Gaps were also raised in average fixed and variable remunerations. For average fixed remuneration, in 72% of cases, male employees earned more than their female colleagues at the same grade while for average variable remuneration, in 69% of cases, male employees earned more than their female colleagues at the same grade.
The CBI found out that five of the 11 entities had not conducted a gender pay-gap analysis themselves. “This is concerning particularly as many of the entities within our sample are part of an international group, which is already reporting under gender pay gap legislation in other jurisdictions, yet they did not take the initiative to do so in Ireland. The Central Bank expects all firms to perform regular pay gap analyses and understand the drivers for any pay variances. This is essential if they are to implement meaningful action plans to address gender pay gaps identified,” the regulator tackled.