Diversity isn’t just the right thing to do – it’s about managing risk

Australia is a vibrant, multicultural country. We are home not only to the world’s oldest continuous culture, but to a broad population with more than 270 ancestries.

Some 30% of us, or almost seven million people, are migrants from the past 70 years. This rich, cultural diversity is one of our greatest strengths and makes Australia unique.

Sadly, our multicultural progress doesn’t translate to opportunity in our institutions and businesses.

Nearly one in five Australians report being discriminated at work due to their skin colour, ethnic origin or religion. If English is not your first language, you are three times more likely to experience workplace discrimination.

As a business community, we lag on other diversity and inclusion progress markers too, from age to gender, sexual orientation and disability, and it’s costing us.

More than two million Australians over the age of 55 want to work but are unable to find it. This costs the Australian economy more than $10bn per annum in pensions, unemployment benefits and loss of taxpayer revenue.

One in five Australians have some form of disability, yet we have one of the poorest employment rates for people with disability in the developed world.

This is a sad state of affairs, given the overwhelming evidence that shows how diverse and inclusive workplaces drive social, financial and organisational results that create more prosperity for all.

As a proud member of the Australian business community, I believe we can, and must, do better.

We know that companies who demonstrate racial, ethnic and gender diversity perform better.

In addition, if we increased workforce participation in the over-55 age group by just 7%, we would add $25bn to Australia’s GDP by 2022.

Similarly, if we closed the gap in labour market participation between people with a disability and those without by one-third, we would add $43bn to GDP over the next decade.

We have work to do to ensure our businesses reflect the diverse society in which we live. In the insurance sector, we have more work to do than most.

While there are pockets of diversity in insurance, the reality is the industry is dominated by white, Anglo-Saxon men (like me) and our image is holding us back from attracting the world-class talent we’ll need to stay competitive and relevant to our customers.

That’s why the launch of the world-first, international diversity and inclusion event for the insurance sector is so important.

The Dive In festival saw 45 events around the world aimed at creating inclusive workplace practices that extend to all employees, regardless of gender, physical ability, ethnicity or sexual orientation.

For the 20 Australian companies that took part, we hope to formalise our commitment to more inclusive workplaces, and achieve some of the social and economic outcomes we need in order to grow and thrive.

This not only makes sense as the right thing to do; it is our industry imperative if we are to stay at the forefront of managing risk.

I am the fifth generation of my family to work at Lloyd’s and the change in risk since my great, great grandfather’s time has been profound. Back 328 years ago when Lloyd’s was founded, insurance was all about protecting the transfer of goods, and facilitating exploration and trade.

Today, businesses are exposed to risk our forebears wouldn’t have dreamed of. Everything from cyber security to the ‘internet of things’, from drones to climate change to the potential for chemical and nuclear weapon use.

So while our profession was built on understanding risk transfer, today it’s equally important to understand the technology behind the cyber-attacks, or the safety and licensing implications of drone operations.

The definition of diversity is changing: in insurance it is as much about hiring a broker with an IT security background to help counter cyber security risk as it is about embracing the physical and cultural differences that will lead to a greater exchange of knowledge, ideas and experience in the workplace.

Importantly, diversity alone is not enough. Without inclusive behaviour, diversity is just another target. This is the real challenge for finance and insurance sector businesses, where often we let the numbers do all the talking.

We need ongoing action to sustain our collective competitive advantage.

We need to display inclusive behaviour in staff meetings and representations with clients.

We need to ensure hiring practices and other organisational systems are free from bias – unconscious or otherwise.

We need to continually challenge our thinking and accept that we may not have all the answers – but that perhaps in the company of people who think differently, we may find them.