Insurance gender pay gap narrows

The insurance industry has reduced its average median gender pay gap over the last year, but still lags behind the national average and the financial services sector as a whole.

Analysis by The Insurance Insider has revealed that the sector’s average median hourly gender pay gap at 5 April 2018 was 29.5 percent, a reduction of 1.7 points on the prior year. The average for the financial services sector was 24.3 percent, while the national average across all sectors was 9.6 percent.

Eligible UK firms have been required since last year to provide a snapshot of their median and mean hourly pay and bonus pay gaps, as well as the proportions of men and women in each of their pay quartiles, as of the previous April. This year, as companies publish their April 2018 snapshot, a comparison between 2017 and 2018 is possible, providing an indication of companies’ progress towards equality.

Insurers

Among insurers, the average median hourly pay gap fell by 1.5 points to 28.3 percent.

FM Global presented the largest median pay gap, with women paid 49 percent less than men. The carrier’s gap had worsened year on year from 46.3 percent. Barbican was a close second as its median gap crept up 3.1 points to 48.2 percent.

Both insurers offered explanations for the gaps in commentary accompanying their reports. FM Global said its was due to the “structure” of its workforce.

“We develop and promote our entry-level employees into senior roles,” it noted. “Many of these entry-level positions require an engineering qualification, generating fewer female employees. This, coupled with a long-tenured workforce, results in FM Global having more men than women in senior roles which tend to be more highly paid.”

Barbican stated that it too had more men than women in senior management positions, as well as more women than men working part-time, although it had seen an increase in requests for part-time working from men in 2018.

Swiss Re Services, Axis UK, MS Amlin, ERS, Markel International, Allianz Global Corporate & Specialty (AGCS), Beazley and Randall & Quilter (R&Q) made up the rest of the insurers with the 10 biggest gaps, all showing differences of more than 30 percent between men’s and women’s pay.

Some 15 carriers’ median gap rose from 2017 to 2018. Of these, Travelers’ increased by the most, at 4.5 points.

The carrier said this was “primarily due to the fact that we hired more women than men into lower-level positions”, adding that its small employee population meant “slight” changes in staffing could significantly affect its figures.

R&Q, which reported voluntarily as it no longer has 250 employees, also had a median hourly pay gap increase of 3.8 points. Its headcount fell significantly over the period after it sold its insurance services division and managing agency.

The number of women in all but its lowest pay quartile went down, driving the median pay gap change. However, it noted that six of its 10 senior managers were women.

Axa UK’s median hourly pay gap increased by 3.7 points, but this was due to a one-off payment to customer support employees in Axa PPP Healthcare in 2017, which “disproportionately raised female median pay”, it said.

Barbican, Markerstudy, FM Global, Aspen UK, Talbot, Markel International, Mapfre, Esure, Tokio Marine Kiln, Direct Line, ERS and Aviva all also published median hourly pay gap increases, while Royal Sun & Alliance’s (RSA) gap remained static.

However, 27 carriers had narrowed the median hourly pay gap over the period. The largest reduction was Swiss Re Management, which cut the difference between men’s and women’s median pay by 11.1 points to 20.9 percent.

While it remained dissatisfied with the gap, Swiss Re Management highlighted a number of equality initiatives undertaken this year. These include monitoring the gender make-up of its talent pipeline, a female sponsorship scheme, flexible working arrangements, more diverse hiring slates and unconscious bias training for managers.

Canopius, Ageas, QBE, CNA, Axis UK, LV, Liberty Speciality Markets, Euler Hermes and Pro Insurance all also managed to narrow their median hourly pay gaps over the year.

The lowest median hourly gender pay gap was Admiral’s, which at just 3.6 percent was far smaller than the next carrier in line, Esure, with a gap of 11.8 percent.

Composite insurers dominated the top 10 lowest median gaps, including Direct Line, LV, Axa, Swiss Re and Ageas, as well as Mapfre, Atradius and Aspen.

As to be expected at businesses which have few women in management positions, some of the gaps between men’s and women’s median bonuses were sky-high.

The largest median bonus gap was at FM Global, where men’s bonuses were 80 percent higher than women’s, followed by Axis UK, which had a gap of 65 percent.

ERS, Canopius, Swiss Re Management, Swiss Re Services, Enstar, MS Amlin, Euler Hermes, Brit, AGCS, AIG and Markerstudy all paid men at least double what they paid women in bonus sums.

The smallest gap in median bonus payments was at Esure, where the gap was just 12.7 percent between men and women, followed by RSA at 15 percent. The remainder of the ten best performers on median bonus gaps all paid men at least 20 percent more than women in bonuses, including Admiral, Mapfre, Atradius, LV, Hiscox, Ageas, Axa UK and Pro Insurance.

Admiral, RSA, Esure, Atradius and Direct Line had the five largest proportions of women in their top pay quartiles, while AGCS, Barbican, MS Amlin, Chaucer and FM Global had the fewest women in their top pay cohort.

Intermediaries

Among brokers, the average median hourly pay gap was 27.6 percent, an improvement on last year’s gap of 5.4 points.

The largest difference was at Price Forbes, where men were paid 52.7 percent more than women, closely followed by JLT Re, at 51.9 percent. Price Forbes also had the biggest median bonus pay gap, 73.3 percent, while JLT Re’s bonus gap was the second-largest at 71 percent.

Price Forbes said the gaps were so large because 72 percent of its workforce was male. It added that it provides flexible working to all staff, as well as enhanced maternity pay and three leadership training programmes.

“Our recruitment strategy continues to be focused on hiring the best talent in the market, regardless of gender or any other characteristic,” Price Forbes explained. “Our people come from many different types of backgrounds and we pride ourselves on their expertise and diversity.”

The remaining eight biggest median hourly gender pay gaps were at Thomas Miller, Integro, Ed, JLT Specialty, THB, Miller, Willis and Hyperion.

Unsurprisingly, the brokers with the largest median bonus gaps, aside from Price Forbes and JLT Re, were a similar group: Marsh Services, Thomas Miller, Gallagher Risk and Reward, Ed, JLT Specialty, THB, Integro and Willis.

Almost half of the brokers in our dataset increased their median hourly gender pay gap between April 2017 and April 2018. Of those, Miller’s increased by the most, with a 5.6 point increase to make a gap of 35.5 percent.

In its report, Miller stressed that it employed more women overall in 2018 than the year before. The increase in the number of female employees, however, was most pronounced it its lower pay quartile, increasing the mean and median gender pay gaps year on year.

Uris Topco, which comprises Direct Group and Towergate Retail, also increased its median hourly pay gap over the period, by 5.4 points. Its gap was significantly smaller than those of its peers, however, at just 7.5 percent.

“The gap is because of the unequal distribution of men and women across the different roles and bandings across the company not because of our pay policies and practices,” Uris noted.

Nonetheless, the company said it is taking a number of actions to improve equality within its ranks, including increasing maternity pay to 100 percent of basic salary for three months, reviewing all HR policies to ensure that they are compatible with flexible working, and investing in the development of female leadership.

Willis’ median hourly gender pay gap also grew by 5.3 points to 34.7 percent. It stated that the figures were “not reflective of the company that we want to be” and added that it too has more male employees in senior roles than women.

“Whilst our distribution has remained similar across the majority of levels from 2017 to 2018, our upper quartile has seen a 1 percent increase in the number of females versus males. This is a small, but important sign of progress,” Willis said.

It added in its report that it had “frequently” heard male employees asking, since the publication of its 2017 pay gap report, “what does this mean for my career and opportunities?”

In response, the broker said: “Promotion and progression in this company will always be based on merit and competence above all else.

“However, as our current statistics highlight, we need to improve the gender balance at senior levels, achieving this will make us a better and more successful company, which is in all of our interests, regardless of gender.”

Ed, Towergate Insurance, Swinton, Thomas Miller, JLT Re, Aon, Hyperion, Gallagher Risk and Reward and JLT Specialty all saw their median hourly pay gaps increase slightly over the year.

The greatest improvement in the hourly median pay gap came at Integro, where the gap reduced by 29.3 points over the year. It is important to note, however, that Integro’s pay gap was 75 percent in 2017, falling now to 45.7 percent, the fourth-largest gap within the broking sector.

Integro’s pay gap reduction was far ahead of those of the next broker in line, Marsh Services, which cut its median hourly pay gap by 7.7 points to 33.4 percent. BGL, Price Forbes, Lockton, Aston Lark, Carole Nash, PIB, Towergate Underwriting and THB also published modest reductions.

Carole Nash had the largest proportion of women in its top quartile, at 43.6 percent, followed by Swinton at 39 percent and Towergate Insurance at 38.1 percent. By contrast, the worst offenders in terms of pay quartiles were JLT Re. Of the reinsurance broker’s top pay quartile just 5 percent were female, followed by Price Forbes, with 5.3 percent.

Ed, JLT Specialty and Miller’s top pay quartile were all at least 80 percent male.

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