Insurance Europe has issued its response to the International Association of Insurance Supervisors (IAIS) regarding their draft application paper on supervising diversity, equity, and inclusion (DEI).
First and foremost, Insurance Europe has expressed support for the IAIS’s commitment to DEI and acknowledged the importance of considering local legal, cultural, and historical contexts in shaping DEI activities. They also highlighted that the size and type of a company will impact DEI policy, affecting data collection capabilities and the speed of implementing initiatives.
Insurance Europe has also emphasised the importance of sharing best practices, noting its DEI Hub launched in 2022 as an example. This platform facilitates the dissemination of industry initiatives to promote equal access, opportunity, and inclusivity in the workplace.
The organisation also urged the IAIS to foster a collaborative approach with stakeholders on key principles, referencing a joint declaration with the European Insurance Social Partners, which outlines recommendations for equal opportunities, training, and inclusive recruitment policies.
In its response, Insurance Europe called for the IAIS and national supervisors to play an educational role, offering industry support and information to advance DEI efforts. They condemned DEI-washing, suggesting that companies should complement their strategies and targets with internal policies to ensure accountability.
Insurance Europe agrees that focusing on DEI helps build positive corporate cultures that support sound prudential and consumer outcomes. They stressed the importance of attracting and retaining diverse talent and supporting employees to thrive within their organisations.
However, Insurance Europe cautioned that over-emphasising DEI or ineffective implementation could negatively impact corporate governance and risk management. They highlighted the risk of creating a culture where constructive challenge is stymied by fears of not being perceived as politically correct. This risk, they believe, can be mitigated by fostering a culture of psychological safety.
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The response also addressed the significant risk posed by groupthink, which can hinder the attraction and retention of diverse talent and the encouragement of a questioning and contributing culture. Emphasising both attractiveness and inclusion is crucial to minimising these risks.
In discussing the importance of diverse representation at the board and senior management levels, Insurance Europe noted that nurturing a diverse talent pipeline at all organisational levels is essential for creating the desired change. They appreciated the IAIS’s focus on building a diverse talent pipeline.
Overall, Insurance Europe supports the early warnings identified by the IAIS but cautions that supervisors should carefully consider context to accurately identify the causes of challenges, which may not always be related to DEI issues.
The IAIS suggested monitoring DEI dynamics in board meetings by observing interactions and interviewing individual directors for additional insights. However, they acknowledged that the presence of supervisors might alter board behaviour, thus individual interviews can provide further insights into regular practices.
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