Mind the gap

The insurance industry concedes it needs to do better on the gender pay gap. But it’s not a quick fix

By Claire Heaney

The spotlight is on more than 120 insurance companies following the release of gender pay information revealing women in this industry face one of the highest gaps in Australia.

In line with the Federal Government’s commitment to close the pay gap, the Workplace Gender Equality Agency (WGEA) has revealed base salary and total median gender pay gaps for 5000 private sector employers in Australia with 100 or more employees.

While WGEA has published aggregate total remuneration gender pay gaps over 10 years, this is the first time it has named individual employers.

More than 350,000 employees are covered by the 326 employers under the financial and insurance services grouping and 88% say they have a formal strategy for gender equality.

According to WGEA, women working in financial and insurance services face one of the highest gender pay gaps of any Australian industry at 26.1%, and 90% of employers still have a gender pay gap more than 5% in favour of men.

WGEA tells Insurance News that while employers in the financial and insurance sectors still have a way to go, there are positives.

“The results also show us that there are a number of employers that are taking action on gender equality, with 9% of employers in the sector showing an optimal gender pay gap of between -5% and 5%. This shows that when an employer chooses to prioritise and take action, it is possible to create a gender-equal workplace,” a WGEA spokesperson says.

The range for the insurance industry for the median total remuneration gender pay gap includes: Helia (4.7%), RACV Insurance (5.5%), Chubb (8.7%), Berkley (10.3%), Allianz (13.4%), Hollard Insurance Company (14.4%), Suncorp (20%), Zurich (22.9%), IAG (25.2%), QBE (25.7%) and Aon (26.5%).

Some insurance companies declined to comment, but Allianz’s Senior Diversity and Inclusion Manager, People and Culture, Edyta Torpy, tells Insurance News while the gender pay gap has improved there is more work needed to ensure men and women are valued and fairly remunerated for their contributions.

“It’s not something that changes overnight,” she says. “It’s taken five years of focus to get to where we are today. But if you don’t make gender equity a priority today, you won’t see the outcomes of gender pay equity in the future.”

Ms Torpy says Allianz undertakes regular audits measuring like-for-like remuneration levels and the organisation-wide gender pay gap.

“Any discrepancies to the like-for-like remuneration levels are addressed immediately to ensure that we remain at 0%.”

Ms Torpy says the gender pay gap is primarily influenced by two factors – the ratio of men and women in more senior, and therefore higher-paying, roles, and the number of men and women in lower-paying roles.

“Therefore, being an organisation that senior women are attracted to, and providing opportunities for women to progress to senior roles, has been something we have been keeping a close eye on over the past few years,” she says.

Not there yet: but Allianz’s Edyta Torpy believes working together can bring lasting change

“One thing that is crucial is to ensure that everyone – from senior leaders to the hiring manager, to the recruitment specialist – are all committed to the same goal of gender equity. Everyone has to lean in, make it a priority and follow through on commitments to lead to sustainable change.”

Ms Torpy says an important aspect of this discussion is recognising that the gender pay gap is not solely influenced by gender.

“Occupational segmentation, previous opportunities to accumulate skills and organisations recognising transferable experiences all play a role in placing accomplished women into senior management roles,” she says.

QBE Chief Executive Asia-Pacific Sue Houghton says the insurer supports the WGEA report as a transparent measure of progress.

For its 2022-23 reporting period, QBE Australia’s median pay gap was 24% for base salary and 25.7% for total remuneration.

“Our 2022-23 gender pay gap is an important measure and tells us we have more to do to address this gap,” she says.

“We recognise that the gender pay gap is driven by a range of factors that cannot be addressed with salary adjustments alone; it requires a multifaceted approach and a sustained commitment to change.”

QBE says it has met its global target of 40% women in leadership, and in Australia and New Zealand it has 41.5% women in leadership as of December 2023.

It is challenging gender stereotypes through its paid parental leave policy, Share the Care, which now sees nearly 40% of men taking parental leave. It is also nurturing family-friendly workplaces through flexible work practices, ensuring the participation and retention of women in the workforce.

Hollard, with a gender pay gap at 14.4%, says it is seeking to identify and remove barriers encountered by women in the workplace.

“The reason our gender pay gap is lower than some of our peers is, we believe, attributable to a long-standing commitment to fostering a culture of inclusion and flexibility for men and women,” a Hollard spokesperson says.

“For example, we actively promote and celebrate the role of fathers in parenting. This, in turn, facilitates opportunities for women to pursue their goals, which assists further in closing the gender pay gap.”

“It requires a multifaceted approach and a sustained commitment to change.”
QBE’s Sue Houghton

Last year Hollard was recognised as the best workplace for fathers in the Australian Fathering Awards. Parental leave and flexible working hours were seen to be good for dads and their families by promoting equal parenting opportunities. The company had a 46% increase in parental leave days taken by fathers over 2022-23 year.

Primary and secondary caregivers have equal access to paid leave, which helps break the link between women’s childcare duties and their inability to pursue career goals.

“Like other organisations, we know we have more work to do,” Hollard says. “We support the move to publish gender pay data and continue to have open and transparent conversations about this issue.”

IAG says it has a greater representation of women than men across its workforce, but there are fewer women at senior career levels where pay is typically higher, and fewer women than men in higher-paying roles. Like other insurers, it has a raft of initiatives to achieve better outcomes.

The Insurance Council of Australia (ICA) says its members recognise that gender pay gaps exist across the insurance sector and are committed to creating a workforce where women and men have equal opportunities and pay.

“We have made progress, but there’s more to do,” a spokesperson tells Insurance News.

In July ICA will release its “talent roadmap”, a six-year program to address the industry’s approach to talent acquisition and retention.

But a human resources insider says it’s a more nuanced issue than bumping up women’s wages. They say women have routinely traded off wage growth for more flexibility around caring commitments, whether for children or older parents.

For some of these women it’s not a choice they would make if they had an alternative, but others may be happy to take a step back from climbing the promotion ladder to care for children.

WGEA says the gender pay gap in financial and insurance services is likely to be driven by an unequal distribution of men in higher-paying roles and women in lower-paying roles.

“Employers may therefore want to start by taking action to get more women into leadership in their organisation – for example, by addressing unconscious bias in advertising and recruitment processes, offering flexibility or part-time arrangements for managers and executives and establishing initiatives that foster women’s leadership development,” it says.

Allianz’s Ms Torpy warns that although flexibility and hybrid ways of working are important, they are not a silver bullet to improving outcomes for women.

“What improves the outcome for women (and men) are leaders who listen to their people’s needs and ambitions; being provided with meaningful development opportunities, being recognised and rewarded for the contributions they make, and knowing how their work contributes to the overall success of their team and the enterprise are all crucial,” she says.

Vero

Duty to disclose

The gender pay gap is a measure of the difference in earnings for men and women. It’s a tool to understand the impact of strategies to attract, retain and advance women in the workforce.

According to WGEA, Australia’s total remuneration average gender pay gap is 21.7%. That means for every $1 on average a man earns, women earn 78c.

That adds up to $26,393 over a year. Unlike the average, the median is not skewed by extreme values such as CEO salaries, so it gives an insight into typical earnings within an organisation.

Using this information, WGEA also calculates a median gender pay gap. This now stands at 19%. A median employer gender pay gap is the difference between the median of what a man is paid and the median of what a woman is paid within the organisation.

Employers should be aiming for a gender pay gap within +/-5%, which gives wriggle room for normal business fluctuations and staff movements.

Under the Workplace Gender Equality Act 2012, all Australian employers with 100 or more employees must report their gender equality data to WGEA annually. But this is the first time the data has been released and is publicly searchable.