Insurer gender pay gaps shrink slightly

pay gap

Insurers’ gender pay gaps narrowed marginally in 2019, with the difference between the median and mean pay of women and men shrinking by 0.94% and 1.46% respectively among a sample of top insurers collated by Post.

The requirement for firms to report their latest gender pay gap statistics by 4 April was lifted on 25 March, out of recognition that the ongoing coronavirus pandemic is putting many businesses under strain.

This meant that of the 30 reporting entities Post looked at, five had not published their latest statistics at the time of publication.

Among the 25 entities that had reported statistics, the variance in median pay between men and women was 22.92% versus 23.86% among the same cohort in 2018.

The gap in mean pay across the cohort narrowed from 28.04% in 2018 to 26.57% in 2019.

The marginal narrowing of both averages contrasts with the direction of travel observed in numbers published last year.

The gap inches narrower

Figures based on 25 reporting entities among a sample of 30 top insurers

Median

2019: 22.92 (-0.94%)
2018: 23.86% (+0.24%)
2017: 23.62%

Mean

2019: 26.58% (-1.46%)
2018: 28.04% (+0.1%)
2017: 27.94%

Looking again at the 25 entities that have published statistics this year, gaps in both median and mean pay actually inched wider between 2018 and 2017, when they stood at 23.62% and 27.94% respectively.

Details of the median and mean pay gaps for insurers in Post’s sample are listed below.

Insurers which Post planned to include in its sample but which hadn't reported statistics at the time of publication were Aspen, Esure, Markel, Liberty and Tokio Marine HCC.

While British Gas, Co-op and Lloyds Bank are listed below by virtue of having significant insurance operations, they are not among the 30 entities that factor into the industry averages, as they are entities with large numbers of staff besides those employed in those insurance operations.

Best and worst performers

Conspicuous among the insurers with the widest pay gaps are London market carriers, such as MS Amlin, XL (now a subsidiary of Axa but which reported separately) and Chubb, which all rank among the top five of Post’s sample by both median and mean measures.

Beazley also feature with the third widest median pay gap and the sixth widest mean pay gap.

Among the 10 insurers in Post's sample with the widest median pay gaps, seven are predominantly London market operations.

Of the eight London market insurers in Post’s sample that have reported up-to-date statistics – a group that includes Tokio Marine Kiln, QBE, Hiscox and Brit in addition to companies above – only Hiscox ranks outside the top 10 in terms of widest median pay gaps. Both Hiscox and Brit rank outside the top 10 in terms of widest mean pay gaps.

As is explained in more depth below, the two types of average companies are asked to report can give rise two very different impressions of pay differences, as the mean measure can be significantly skewed by wages of the highest earners.

A case in point is Tesco Underwriting, which rubs shoulders with the London market carriers among those with the widest mean pay gaps, but also has the fourth narrowest median pay gap by virtue of a 4.8% decrease between 2018 and 2019.

Admiral and health insurers Bupa and Axa PPP Healthcare fill the top three positions for both narrowest median and mean pay gap, all boasting single-digit differences in the former category.

Axa is unique among the insurers that make up the sample looked at here in that it three of its constituent entities are included: beside health insurance arm Axa PPP Healthcare, there is also Axa UK PLC, which accounts for the insurer’s head office and support teams, and Axa Services Ltd, which primarily employs people in Axa’s insurance business.

Pay gap primer

The gender pay gap is the percentage by which women earn less than men, based on average hourly earnings. A 5% pay gap denotes that women in a particular organisation earn 5% less per hour, on average, than men.

It is calculated by either a mean or median average. The median average represents the very middle of the sample. For instance, in a company, half the employees earn more than the median, and the other half earn less. The median pay gap, therefore, represents the difference between men and women at that median point.

The mean average is the sum total of salaries, divided by the number of employees. The mean pay gap represents the difference between men and women at the mean value. It tends to be skewed by the highest paid employees. If there are more men at the highest level of the company, the mean average pay gap will likely be higher than the median average.

Narrowest pay gaps

Median   Mean  
Bupa Insurance 3.8% Admiral 12.9%
Admiral 4.5% Bupa Insurance 15.6%
Axa PPP Healthcare 7.3% Axa PPP Healthcare 16.3%
Tesco Underwriting 10.3% Direct Line Group 16.3%
Direct Line Group 13.7% Axa (Axa UK PLC) 17%

 

Widest pay gaps

Median   Mean  
MS Amlin 37.9% MS Amlin 45.9%
XL 34.5% Tesco Underwriting 38.1%
Beazley 32.5% RSA 33.6%
Covéa Insurance 31.4% XL 32.9%
Chubb 30.6% Chubb 32.7%

 

Biggest decreases

Median   Mean  
AIG -9% Brit -5.7%
Axa PPP Healthcare -6% Axa (Axa UK PLC) -4.1%
Tesco Underwriting -4.8% Beazley -3.7%
Beazley -4% Axa PPP Healthcare -3.4%
Axa (Axa UK PLC) -3.3% Ecclesiastical -3%

 

Biggest increases

Median   Mean  
XL +4.1% XL +1.9%
Ageas UK +3.5% QBE +1.6%
QBE +2.9% Legal & General +1.3%
Legal & General +2% Axa (Axa Services Ltd) +1%
Covéa Insurance +1.6% Covéa Insurance +0.4%
 
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