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Why tech is finally bringing a female voice to the insurance industry
Women make up 45 per cent of entry-level roles in insurance yet only 18 per cent of those in the C-Suite, writes Paula Coulthard Griffiths, Insurance Director at Marshmallow.
The insurance sector continues to be plagued by stigma: from outdated underwriting processes to a lack of data analysis, legacy ways of assessing risk to old-fashioned customer service systems, this centuries-old industry has a long-held reputation for being slow and unwilling to change its ways. It’s a reputation I’d say was fully well-deserved.
This is also true of the diversity in the sector. According to Deloitte, the proportion of women in leadership roles within financial services firms has risen only modestly since 2019, from 22 per cent to 24 per cent. In the insurance sector, the numbers are even starker and point towards a trend that suggests women are restricted to only certain roles, with women making up 45 per cent of entry-level roles yet only 18 per cent of those in the C-Suite. It, therefore, comes as little surprise that female representation – both at a junior and senior level – within the insurance industry is nowhere near where it should be, particularly in terms of female leaders and role-models.
It’s in all our interests to continue working towards this goal, with a 2020 study finding that stock exchange companies where women make up at least one third of executive roles have a profit margin of 15.2 per cent – more than ten times greater than the mere 1.5 per cent profit margin of firms with no women on their executive committees.
So while it’s true that the insurance industry has made some strides towards a level playing field, many accept there is still a long way to go.
But all is far from lost. Having spent nearly 20 years in the insurance industry, I’ve seen first-hand the ways in which technology is slowly breaking down some of these tired tropes and ways of working. Insurtechs are building new kinds of insurance business and in turn, technology has become the fundamental factor driving progress in the insurance space, both for customers and also employees.
Looking back on my time in the industry, I’m happy to say that the number of incredible women I work with on a daily basis has increased significantly, and the space is slowly starting to head towards a more balanced and diverse workforce.
Of course, there’s still a way to go - but progress is being made thanks to technological advances and a more open mindset across the board.
“Insurance” and “innovation”, for many, are not words that would typically be coupled together. Nor is insurance an obvious place to innovate, as the industry’s practices have gone largely unchanged from those it was using hundreds of years ago. However, products-wise, the data we as insurtechs can collect and the models that can be built empower us to know what our customers want are seemingly endless. Essentially, we have never been better set up to leverage data-driven innovation and service typically more complicated market segments.
In the same way, technology has played a critical role in removing the silos within the space, ushering in a broader and more diverse workforce. This has never been more so than in the pandemic, with new, more flexible systems of working which are more attuned to an individual’s personal needs. And both men and women are benefitting from the fact that the stigma around flexible working has been pushed aside and more widely accepted as a result of the last 2 years.
On top of technology, though, there are more systematic considerations that need to be taken to further alleviate gender inequality within the sector. A solid education for everyone across the wider financial services sector to better understand the significance of representation and diversity of thought is key.
Likewise, acknowledging that recruiting to achieve greater diversity should not be a passive, one-size-fits-all exercise or a mere D&I obligation. Government parental leave policies are also crucial to support parents – not just mothers – as we return to a very different work environment than the one we had almost exactly two years ago. These key changes would undoubtedly help the insurance sector to step into a more diverse and balanced workforce.
That said, the insurtech space is currently – and will most certainly remain – the place to be. Tech is changing insurance for good, making the sector fairer for all, and establishing disruptive but ultimately better ways of doing things. And as customers continue to change their buying behaviour, the wider industry must keep up. Technology is the vehicle through which we can all facilitate change, and soon enough traditional insurance providers won’t have an option other than to embrace it.
The views and opinions expressed are not necessarily those of AltFi.