Dr Patrick Dixon Chairman Global Change Ltd

Why Diversity Matters to Future of Insurance Industry

Patrick Dixon is Chairman of Global Change Ltd, author of 15 books and has been ranked one of the 20 most influential

business thinkers alive today (Thinkers 50), conference keynote speaker on global trends, strategy, leadership.

This keynote on diversity and insurance industry (Swiss Re)

>500 videos of Keynoteshttp://www.youtube.com/pjvdixon

Over 4 million views

Dixon’s Futurist Website:http://www.globalchange.com

14 million unique visitors

TRENDS                                                                                                              STRATEGY

 

FORESIGHT                                                                                                INSIGHT  

do things you really believe inLife  is  Short    

Why  I  believe  in  insurance    

     Insurance:  Confusing  Messages�Marke&ng:  We  are  here  to  protect  your  family,  to  pay  out  generously  and  quickly  if  something  happens  to  you,  giving  you  peace  of  mind  at  a  fair  price.    We  believe  in  the  value  of  what  we  do  for  you.

�Investor  Rela&ons:  Our  mission  is  to  make  shareholders  as  much  wealth  as  we  can  without  breaking  the  law  and  landing  up  in  prison.  We  raise  life  insurance  premiums  as  high  as  we  can  get  away  with,  and  pay  out  as  liBle  as  possible.  

Wild  Cards:  Risk  Management

Low probability, high impact events

WGP  1980-­‐2013  (%,constant  prices)

confidencereturning

EU  GDP  1980-­‐2013  (%,constant  prices)  

Vietnam  GDP  1985-­‐2011  

>40% WDP by 2015

� IMF - adjusted for Purchasing Power Parity

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The future is about

EMOTION

Diversity = Predictability

Passions Change

Demands for more sustainable, socially responsible and ethically managed business

Understanding  how  people  

FEEL

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90%  web  customers  lost  in  seconds  

Diversity  in  workplace  leads  to  diversity  in  marketplace

300 million move to cities in China and475 million to cities in Africa by 2025

Pollution of Air and Water

Europe Dying 4 couples to produce singlegreat-grand child

Stop Ageing

75% of all US and UK wealth owned by those over 65 - but many need to work

Slow or no ageing is a reality in animalsImpact on average EU retirement age of 60 • Rockfish,

Turtles, some Whales

• No signs of getting old

Understanding  how  people  FEEL  about  

their  workplace  

Corporate ValuesHelp Recruitment

• 82% would not work for company whose values they objected to

• 59% work for a company because they believe in it’s values

Values are about responsibility and care

1  trillionpages  a  month

Online HR Challenges• xxxxx is like working for that two-faced,

back-stabbing "so-called" friend you wish you had neve... Read More

• Just to give an overall perspective. I am trying hard not to EVER buy a product from this company a... Read More

• I am quite disappointed in the culture and diversity at xxxxx. The culture is similar to a popu... Read More

ReputaZon  for  hiring  WHITE  

Americans  leading  to  lawsuits

Coca  Cola  Diversity  Awards

Teams  in  top  half  of  Engagement

� 86% more likely to have better customer metrics� 70% more likely to have low staff turnover� 70% more likely to be highly productive� 44% more likely to be profitable

� 10 million surveyed by Gallup

Diversity  gives  more  chances  answers  to  complex  problems

Talent, skills, experience, language shortages

Diversity  Benefits

As  with  Sustainability,  Diversity  started  as  a  social  issue,  and  developed  as  a  business  case  -­‐  

innovaZon,  compeZZve  advantage

Forbes  study  of  321  companies  with  more  than  $500  million  in  revenue,  85%  agree    that  diversity  is  key  to  encouraging  innovaHon.

Diversity  linked  to  higher  sales,  market  share  and  profits

Diverse  teams  can  mean  less  loyalty,  lower  moZvaZon,  higher  sick  leave,  

conflict,  mis-­‐communicaZon

Expect many mergers and acquisitions even

Diversity  BenefitsBe^er  range  of  skills,  backgrounds,  experience

Be^er  understanding  of  customers  and  local  or  global  markets

Be^er  talent  pool  to  draw  from

Be^er  team  morale  /  corporate  pride

Be^er  corporate  image

Cost  of  Workplace  DiscriminaZon

$64bn  a  year  in  US  according  to  Centre  for  American  Progress  -­‐  partly  due  to  turnover  of  2  million  people  a  year  because  of  discriminaZon

Fedex  paid  $3m  to  se^le  cases  in  15  states  of  race  and  gender  bias  in  recruitment

40%  of  gay  and  lesbian  employees  say  they  face  harrassment  and  discriminaZon  at  work

Diversity  Challenges

Worse  internal  communicaZonWorse  sense  of  belongingWorse  staff  turnover

Worse  ability  to  make  rapid  decisions

Reproduce  own  imageTend  to  recruit  people  with  familiar  name,  voice,  accent,  personality,  culture,  appearance

GENDER  

Female Crisis

• Most sales to women• 60% US graduates• 40% primary earners• Most women leave corporations early

• Solve talent shortage

UrbanTribal

Women outperform menand then disappear

• High School, College, and workplace

• Lead <3% of Fortune 1000 companies

• Are 10% EU boards• More board members

– 42% higher sales– 66% higher ROI

• DBSI

Toxic Testosterone Culture

• Young children• Dependent parents• Double careers• Double shift patterns• Divorce / separation

Complex Homes

• 12% of mothers want to work full time• 31% do not want to work outside home• 28% men full time jobs want part time• Most fathers want more time with children

• 2009 UK Survey

Parents and Work

Life-Life Balance

Balance is usually about People

Better Flexibility

• Hours –part-time, job-sharing, flexible start and finish times or shorter working weeks

• Leave – extra unpaid leave for study, bereavement, parental care, voluntary

• Location – working from home, opportunity to transfer to a different area

RACE  

Different in Emerging Nations

“People  of  Colour”-­‐  USBy 2050, no ethnic majority in US

By 2050 new immigrants and their children will account for 83% of growth in workforce

People of colour own 22% of U.S. businesses

Women of colour own 1.9 million firms, with $165 billion in revenue annually and 1.2m staff

People of color and women only represent about 15% and 18% of corporate boards among the senior management of Fortune 500 companies

US  Race  DiscriminaZonThe  average  unemployment  rate  for  Blacks  is  double  that  for  Whites

Unemployment  rate  for  White  graduates  =  8.4%  but  19%  for  Black  graduates

95%  of  the  unemployment  rate  gap  is  due  to  higher  probability  of  losing  work

DiscriminaHon  on  ancestry,  color,  hair  texture,  facial  features,  name,  accent  or  manner  of  speech,  hair  style  (e.g.  locks  or  a  goatee).  Couch  and  Fairlie

EU  race  discriminaZonRise  of  xenophobia  across  EU

HosZle  reacZons  to  Italy’s  first  black  cabinet  minister  etcItaly,  Slovakia,  Hungary  NB  discrominaZon  against  Roma  people

Ethnic  Issues  in  UK  Workplace12%  of  working  age  are  ethnic  minoriHes20%  unemployment  rate  in  Black  workers7.6%  unemployment  rate  in  White  workers20%  unemployment  rate  in  white  youths44%  unemployment  rate  in  black  youths

1  in  6  UK-­‐domiciled  students  ethnic  groups1  in  15  ethnic  graduates  are  in  management

UK  Race  DiscriminaZonMany job applicants change their name or appearance to try to overcome prejudices

better chance of job interview / offer

UK  Race  DiscriminaZonOnly 1% of principals of colleges in Britain are

from ethnic minorities -16% of students

Benefit  of  Quotas  ?Black  Asian  and  Minority  Ethnic  People  in  UK

1  in  4  at  school  -­‐  1  in  8  in  workforce  -­‐    1  in  16  on  FTSE100  boards

Diversity  Blindness  in  White  Men700 managers at companies rated their managers for encouraging diversity in Alcoa, Bank of America, Intel, Exelon, Marsh & McLennan Companies, PepsiCo, Wal-Mart and PWC etc

45% percent of white men gave boss a positive rating21% percent of women and people of color agreed

Wide gaps in the perception of white men's abilities to coach and improve the performance of diverse employees; build strong, diverse teams; promote diverse talent on merit; and include diverse voices in decision making.

AGE  

Jim  Clements  is  100  years  old

Beyond  ReZrement

� What is your corporate position on retirement age?� Laws vary - challenge to take a position� Same with pollution standards between nations� What is “moral high ground” ?� Does it change when 40% of youth are out of work?

IMPROVEDIVERSITY  

Steps  to  Diversity:

Develop  hiring  strategy  to  make  workforce  look  like  community  you  operate  in

Keeping  new  hires  may  be  harder  than  recruitment  -­‐  helping  them  to  belong

Affinity  groups  etc

Steps  to  Diversity:Use  community  organisaZons  in  hiring

Be  culturally  sensiZve  in  descibing  company

White  men  “drive  Diversity”White  men  run  diversity  programs  at  big  US  employers  such  as  Coca  Cola,  PWC  and  Southern  Co.'s  Georgia  Power  unit.  

Benefit  of  Quotas  eg  Women  ?

• 50%  of  countries  have  some  kind  of  electoral  quotas  for  women  in  Parliament

• only  23.2%  of  MPs  in  the  EU  are  women.• Only  3.2%  of  the  Presidents  or  Chairs  of  the  largest  publically-­‐listed  companies  in  EU  are  women

• Only  13.7%  of  their  board  members  are  women

Start  at  the  Top

Modelling  right  altudesAbsolute  commitment  to  diversityClear  targets  -­‐  concrete  aspiraZons

Aggressive  steps  to  achieveRecruiZng  -­‐  mentoring  -­‐  encouraging

A^acking  insZtuZonal  prejudice  and  barriersAgents  for  change  in  wider  society

•Individuals•Family•Corporation•Community•Wide World

Making Life Better

Dr Patrick Dixon Chairman Global Change Ltd

Why Diversity Matters to Future of Insurance Industry