Conversations had around ethnicity, race, and gender have altered considerably in recent years, and many organisations have been more aware—and vocal—about the composition of their staff. Many of these conversations have been uncomfortable, and some focused on pay.
Nikki Lees, QBE’s head of inclusion and wellbeing, came into the Re/insurance Lounge, Intelligent Insurer’s online, on-demand platform for interviews and panel discussions with industry leaders, to talk about the company’s UK Ethnicity Pay Gap Report 2020.
Released in July 2021, the report used data collated from the 80 percent of QBE’s staff who had listed their ethnicity when they began employment at the company and attempted, inter alia, to show the difference in the average hourly rate of pay between ethnic minority and white employees.
Unlike mandatory reporting on the gender pay gap under UK law, there is no legal call for a company to look at the differences of rates of pay between people of different ethnicities.
“There’s no mandatory government requirement to publish this, but we decided to do so because we want to be open and transparent with our staff, hold ourselves to account, and do the right thing,” said Lees.
“Going forward on an annual basis, we’ll be looking to report on gender and ethnicity pay at the same time."
Nikki Lees, QBE
Areas of disparity
The results were encouraging for QBE. The authors wrote: “Analysis of our ethnicity pay gap data shows that we pay people fairly and that there is little evidence that represents unequal pay for equal work between ethnic minority and white employees.”
The report looked at four areas to measure inequality: the median pay gap; the mean pay gap; the median bonus gap; and the mean bonus gap. The first two were close: the median pay gap (the middle salary when all salaries were listed) showed that ethnic minority staff were paid 10.4 percent more than white staff. The mean pay gap (the cumulative salaries divided by the number of staff) showed that white staff were paid 7.9 percent more)
However, the median bonus gap and the mean bonus gap showed that white employees received 43.9 percent and 54.9 percent more.
Lees said the company knows why those differences exist. “The analysis we looked at shows that the bonus gap is primarily driven by the lack of ethnic diversity within the senior levels,” she said.
QBE states in the report that there are other reasons. Its employees, it said, are eligible for an annual bonus only if they were employed at the company before October 1 of that year. In 2020, said QBE, this measure was skewed by the fact that 63 people from an ethnic minority background were hired after this date, so 91 percent of employees received a bonus, compared to only 75 percent of ethnic minority staff.
There were other disparities. “We have a higher percentage of ethnic minority representation within specific business areas, such as finance, actuarial, legal, and IT. There is a lack of representation of ethnic minority employees in the core insurance underwriting areas, and even fewer who identify as black,” said the report’s authors.
“Around 17 percent of the UK population identified as black, Asian, or mixed heritage,” said Lees. “But when you look at our senior leadership population, that accounted for more like 9.3 percent, so you can see the difference in representation levels.”
This is the first time that QBE has conducted such a survey so, Lees said, there was little that could be gleaned from it to demonstrate progress. She compared it to the company’s other work in this area. “We’ve been reporting on our gender pay gap since 2017 and when we look at the progress we’ve made on that, our mean gender pay gaps reduced by 6.2 percent over that period of time. On our mean, bonus pay was reduced by 20 percent,” she explained.
Few lessons can be taken directly by QBE from this year’s report, since it is the first time the firm has performed such an undertaking. Lees said this is to be expected, and that the data QBE has collected in 2020 will form the baseline going forward.
There are, she added, already plans in place to look at the ethnicity pay gap every year in the future. “We’re now in the process of looking at our 2021 data and we’ll publish the progress.
“This is our benchmark, our starting point, and going forward on an annual basis, we’ll be looking to report on gender and ethnicity pay at the same time. That’ll be around January next year.”
“If you’re outside the insurance market, what’s going to attract you to QBE?”
The right environment
The company has had firm targets for what it seeks to achieve for gender representation in its ranks for a while: Lees said that the aim is to reach 40 percent of senior roles going to women by the end of 2025. There are currently no plans in place for targets when it comes to ethnic minority representation.
“The insurance industry should be representative of the people it covers, and is falling short in this regard,” Lees said. “The last census data showed that when you look at London, 40 percent of that population are from an ethnic minority.
“It’s very important to be looking at people’s lived experiences. If we want to attract, retain, and promote diverse talent, then we need to create the right environment for people to thrive when they’re in the industry.
Another finding, something that came out of the 2020 Lloyd’s culture survey, was that 100 percent of ethnic minority colleagues answered more negatively about their experiences in the industry, compared to white colleagues.”
If QBE is focused on any one thing in this area, it is looking more broadly at how it attracts talent.
“The QBE brand is very well known in the insurance market,” said Lees. “If you’re outside the insurance market, what’s going to attract you to QBE? We need to think about our employer brand, our market proposition, and about advertising for talent where people might not expect us to look for talent.”
To view the full Re/insurance Lounge session click here
Image courtesy of Shutterstock / Everett Collection
