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Thoughts on Diversity

Anti-diversity

The glass ceiling game:The heroic one comes from the HBR Blog Network, titledHow Female Leaders Should Handle Double Standards.

It is about how women are perceived how they dress,talk, their executive presence, capacity to ll a room,leadership style and public image has been the object of

vast, well-intentioned efforts to get more women to the top.Voice coaches, image consultants, public speaking instruc-tors and branding experts have lled the growing demandfor these services.

The premise, goes the blog, is that women have not beensocialised to compete successfully in the world of men, andso they must be taught the skills that their male counterpartshave acquired naturally. But, at the same time, they musttone it down or risk being labelled as having sharp elbows.

The crux of the matter is that women are evaluated against amasculine standard of leadership that leave them limitedoptions and distracts attention from the task at hand.

Advice from three women leadersWhile women are likely no more susceptible than men tosuch diversions, subtle (and not so subtle) cultural biases

can easily turn womens attention inward as they try to rec-oncile conicting messages about how to behave as leaders.

What to do then, in a world when image and perceptionsmatter, and gender stereotypes remain rmly entrenched?

Three pre scr iptions, in the blog, from three womenleaders:

We should just focus on what we have to do, says MsLubna Olyan, the Saudi CEO of Olyan Financing. Shebelieves, women shouldnt be distracted by things thattake away from what we are trying to accomplish.

The story is never what she says, as much as we want itto be. The story is always how she looked when she saidit, say the members of Ms Hillary Clintons press corps.

What does Ms Clinton have to say? She does not ght itanymore; she focuses on getting the job done.

IMF Chief, Ms Christine Lagarde says be yourself. Darethe difference. But do so skilfully. Dont just let it hangout; and never confuse being authentic with fatal awssuch as treating people poorly.

So while you work towards breaking the glass ceiling, donot give up your originality. Being yourself is diversity too.

The biggest enemy of diversity is anti-diversity anything that stomps over things

diverse and intending to homogenise them or conversely anything coming in the way ofsomething attempting to diversify. Over the last couple of weeks, I picked two stories

both defying this hypothesis. One in a heroic sense and the other in a mysterious way!

ByMr Praveen Gupta

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The most misunderstood industry (TMMI):Why is insurance TMMI, consistently across the world? Thatthere is little room for diversity, in the ways it is perceived,remains a mystery.

Two professors at Wharton, Howard Kunreuther and

Mark Pauly together with Urban Institute researcher StaceyMcMorrow, analyse the theme in Knowledge@WhartonToday.The focus of their study is USA, the worlds mostdeveloped and penetrated insurance market. Their ndingsdo not seem to be any different for the rest of the worldthough it makes an interesting read.

An extraordinarily useul tool to manage risk : Yet broadly misunderstood by consumers, insurance

executives and regulators

Many do not voluntarily buy coverage againstpotentially risky and serious losses

Insurance rms also behave strangely after they

suffer a severe loss State regulators often constrain insurance premiums

because they are concerned that insurance will not beaffordable

Affordable Care Act (ACA) health reform legislation re-quires sellers of individual and small group insuranceto sell coverage to all who wants insurance at premiumsthat do not take into account the buyers medical risk

Why do consumers, insurance frms and regulatorsbehave as they do? There is a tendency for those at risk to assume that

disaster losses or major health related expenses will not

happen to them. Given this view, they feel no need topurchase insurance protection. Only after suffering aloss will consumers voluntarily buy insurance. After adisaster, insurers may decide to restrict coverage, andstate regulators are likely to prevent private insurers fromcharging premiums that reect the actual risk.

Behaviour of this kind defeats the three principal pur-poses of insurance: to provide information via premiumsas to how serious your risk is; to provide motivation forundertaking nancial protection against an event thatcould produce a signicant loss but has a low probabil-ity of occurrence; and to offer incentives in the formof premium reductions to reward people who invest in

risk-reducing measures.

Incentives, rules and institutions that encourage aconstructive role for insurance will ultimately improveindividual and social welfare. Several recent pieces oflegislation have set the tone for appropriately dealing

with risk. Dealing with terrorism via the Terrorism RiskInsurance Act (TRIA); Biggert-Waters Act proposes majorreforms to the National Flood Insurance Program (NFIP).

The ACA requires insurers to offer insurance to all USresidents who do not currently have coverage througheither their job or a public plan.

What can be done to make insurance a betterpolicy tool and to avoid adverse side eects o thewell-intentioned programmes already in place? One way to convince people, prescribed the authors, of

the long-term benets of insurance is to stretch the time

horizon over which the event can occur. Studies haveshown that people are much more likely to buy insur-

ance or invest in protective measures if an event, suchas a hurricane, that has a one in 100 chance of occurringnext year is presented as having a greater than one inve chance of happening at least once in next 25 years.

And if the disaster does not happen well, the truth isthat the best return on an insurance policy is no returnat all. One should celebrate not having a major loss!

Insurers should construct worst-case scenarios for rareevents. They can then determine a premium that reectstheir best estimate of their expected future risks factor-ing in the uncertainty of the events happening. Insurerscould also consider offering multi-year policies if stateregulators allow them price coverage that reects risk over

that period. A multi-year insurance policy with risk-basedpremiums coupled with a multi-year home-improvementloan to pay for risk reducing measure may enable policyholders to reduce their overall costs.

Having diagnosed what keeps us being the most misun-derstood industry, the authors demystify our current stateand also suggest prescriptions for overcoming this woe.Maybe anti-diverse at the outset but if each market andgeography could discover its own remedies; we may soonbe a reinvented entity.

Mr Praveen Gupta is MD & CEO at Raheja QBE General Insurance CoLtd. The art icle represents Mr Guptas personal views. He championsthe cause of diversity also in his capacity as member of Diversity ActionGroup, Chartered Insurance Institute (London). He is grateful to TheEconomist for the seminal themes.

www.thediversityblog.wordpress.com