Gender parity between men and women in the insurance industry has been a salient topic for many years now, and, though not a new conversation, it is one that is continually evolving. A 2019 McKinsey analysis reported that while the insurance industry fares slightly better in general than other sectors when it comes to gender statistics, only 28% of VP-level employees were women, whilst only 18% of SVP-level employees were women – both percentages lower than other industry averages in the same categories.
Nonetheless, increased gender diversity in the workplace has been shown to boost team effectiveness, improve societal resilience, and strengthen financial returns, with the McKinsey report finding that insurers that make this objective a priority, do two things better than those that do not: one, setting clear, CEO-driven aspirations across an organisation, and, two, systematically executing a few identifiable initiatives. “Two of the most common initiatives for insurers are creating a sponsorship program and addressing unconscious bias,” the analysis said.
Meghan McNally, Vice President of Multi-Sector Insurance Portfolio Management at AllianceBernstein, and Laura Sarlo, Emerging Markets Portfolio Manager at Liberty Mutual, said that the impact of women in the insurance asset management industry was growing but could still be championed further – noting that mentorship and sponsorship are not synonymous, that capturing original data is necessary for change, and that asking for raises and promotions should be demystified and normalised.
McNally and Sarlo were speaking on the topic at the recent Insurance Investor Live North America 2022 event, hosted by Clear Path Analysis, where they discussed their respective experiences as women in insurance asset management and what is currently missing but required in order to take crucial steps forward. You can read the "Insurance Asset Management, North America 2023" report in full here, which features the discussion between McNally and Sarlo alongside other participants.
One recurring topic that emerged was the importance of mentorship – both formal and informal – for underrepresented groups in the insurance investment space. Mentorship, said McNally, is especially instrumental when it provides additional coaching or behaviour modelling for mentees. “It is so helpful to have someone who can hold a mirror up to you and say these are issues to work on and someone you can trust to try and advance personal and professional skills,” she continued.
McNally added that cross-gender mentorship is no less important, and Sarlo agreed, noting that it is always helpful to have a trusted inside advisor so one can be aware of issues sooner rather than later. “As I have gone through my career there are many lessons that I wish I had known earlier. It is now my job – and all of our jobs – to pass information on,” she said. “You need to know what they say about you when you are not in the room, and it is good for all of us to be willing to hear that feedback. It’s good to identify who in your organisation can be someone to give you that kind of feedback.”
“More women have the idea that if you keep your head down and do a good job,
someone will notice, but that is not the way the world works.”
Sarlo was clear that mentorship is particularly important for women, who likely enter into a workplace with different assumptions about etiquette or different attitudes toward advancement. “More women have the idea that if you just keep your head down and do a good job, someone will notice and you will get promoted, but that is not the way the world works,” she said. “I didn’t know that for years; it’s on all of us to share lessons and draw more people in and deepen conversations.”
When asked how those in senior positions could help change this trend, Sarlo said that meeting leaders can focus on championing people who have different perspectives or backgrounds – or who may be on the quieter side and less inclined to immediately chime in.
Mentorship, however, is not synonymous with sponsorship, another much-discussed term when it comes to workplace gender parity. A recent report from the Association of British Insurers (ABI), “Tackling the gender seniority gap”, identified both organisational and behavioural interventions that can help mitigate what Sarlo called the ‘funnelling effect’: the fact that women have historically been excluded from – or ‘funnelled out’ of – the senior-level pipeline.
The key question is: “Where did all the women go and why does it happen?” said Sarlo. She went on to add that structured internal and external programming – critical opportunities for accredited sponsorship – has the potential to combat this issue, citing the Network for Independent Women in Insurance (iWIN) and the non-profit 100 Women in Finance as valuable industry resources.
“It is important to normalise asking for raises and promotions. These things
should be encouraged and part of the standard discourse with managers."
The ABI analysis noted that it believed the dominant reason for the gender seniority gap was working patterns associated with motherhood. “Because women tend to take on the main child-rearing responsibilities, they work part-time and are then not promoted,” the report said. This, it added, creates a cycle whereby women might begin to see an “irreconcilable tension” between flexible working and senior roles – ultimately hindering their advancement.
There is more gender parity at the beginning of a career, McNally said, but one encounters a downward-sloping trend further down the seniority track. “It is important to normalise asking for raises and promotions,” she added. “These things should be encouraged and part of the standard discourse with managers. Mentorship does work better if it is organic, whilst sponsorship might need organisational support and resources to ensure sponsors are not just giving opportunities to people who look like them.”
Capturing original data – information that is unique to an individual organisation – also plays a significant role in supporting women and underrepresented groups, as well as nurturing talent throughout the advancement pipeline.
"Promotions may at first appear [to be] one-off decisions. But, if you look
across the organisation – does that data look representative of your goals?”
In order for companies to strengthen their mentorship and sponsorship opportunities, it is imperative that they use their own data to draw conclusions, said Sarlo. This data could include information about why people join and/or leave an organisation, collected across various seniority levels. “See if that data aligns with your goals,” she continued.
“For example, in small teams or organisations, promotions may at first appear [to be] idiosyncratic, one-off decisions. But, if you look across the organisation at everyone who has gone from level two to level three, for example, and maybe look over time, everyone promoted over the last two years, not just one quarter – does that data look representative of your organisation and goals?”
The ABI report said that quotas – while not always popular – can often be used as helpful metrics to concretely track progress made on hiring and advancement numbers. “There is good evidence that targets and quotas do change behaviour,” it reported. “For example, in France in 2012, quotas were put in place for the number of women in top public-sector jobs. As a result, there was an increase from 21.4% of women in top public-sector jobs in 2013 to 28% in 2015.”
Ultimately, the more companies understand their data profile, and the factors behind it, the better they can be at supporting the individuals who make up their workforce and strengthening their talent pools – futureproofing, in a nutshell. From a risk perspective, organisations that actively seek gender parity will likely fare better than those that do not.
“We have to reach out to those who are different and welcome them into the
conversation more because that is what makes people feel valued."
Sarlo ended with these words on the importance of outreach to a strong and profitable enterprise: “We have to reach out to those who are different to find that space and welcome them into the conversation more on a day-to-day basis because that is what makes people feel valued and part of the team even if you share different characteristics.”
