Thoughts on Diversity

Anti-diversity
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 of something 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!
By Mr Praveen Gupta

The glass ceiling game:

The heroic one comes from the HBR Blog Network, titled How Female Leaders Should Handle Double Standards. It is about how women are perceived how they dress, talk, their executive presence, capacity to fill 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 instructors and branding experts have filled the growing demand for these services. The premise, goes the blog, is that women have not been socialised to compete successfully in the world of men, and so they must be taught the skills that their male counterparts have acquired naturally. But, at the same time, they must tone it down or risk being labelled as having sharp elbows. The crux of the matter is that women are evaluated against a masculine standard of leadership that leave them limited options and distracts attention from the task at hand.

can easily turn womens attention inward as they try to reconcile conflicting messages about how to behave as leaders. What to do then, in a world when image and perceptions matter, and gender stereotypes remain firmly entrenched? Three prescriptions, in the blog, from three women leaders: We should just focus on what we have to do, says Ms Lubna Olyan, the Saudi CEO of Olyan Financing. She believes, women shouldnt be distracted by things that take away from what we are trying to accomplish. The story is never what she says, as much as we want it to be. The story is always how she looked when she said it, say the members of Ms Hillary Clintons press corps. What does Ms Clinton have to say? She does not fight it anymore; she focuses on getting the job done. IMF Chief, Ms Christine Lagarde says be yourself. Dare the difference. But do so skilfully. Dont just let it hang out; and never confuse being authentic with fatal flaws such as treating people poorly. So while you work towards breaking the glass ceiling, do not give up your originality. Being yourself is diversity too.

Advice from three women leaders

While women are likely no more susceptible than men to such diversions, subtle (and not so subtle) cultural biases

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April 2013

Thoughts on Diversity

The most misunderstood industry (TMMI):

Why is insurance TMMI, consistently across the world? That there 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 Stacey McMorrow, analyse the theme in Knowledge@Wharton Today. The focus of their study is USA, the worlds most developed and penetrated insurance market. Their findings do not seem to be any different for the rest of the world though it makes an interesting read.

An extraordinarily useful tool to manage risk:

Yet broadly misunderstood by consumers, insurance executives and regulators Many do not voluntarily buy coverage against potentially risky and serious losses Insurance firms also behave strangely after they suffer a severe loss State regulators often constrain insurance premiums because they are concerned that insurance will not be affordable Affordable Care Act (ACA) health reform legislation requires sellers of individual and small group insurance to sell coverage to all who wants insurance at premiums that do not take into account the buyers medical risk

Why do consumers, insurance firms and regulators behave 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 to purchase insurance protection. Only after suffering a loss will consumers voluntarily buy insurance. After a disaster, insurers may decide to restrict coverage, and state regulators are likely to prevent private insurers from charging premiums that reflect the actual risk. Behaviour of this kind defeats the three principal purposes of insurance: to provide information via premiums as to how serious your risk is; to provide motivation for undertaking financial protection against an event that could produce a significant loss but has a low probability of occurrence; and to offer incentives in the form of premium reductions to reward people who invest in risk-reducing measures. Incentives, rules and institutions that encourage a constructive role for insurance will ultimately improve individual and social welfare. Several recent pieces of legislation have set the tone for appropriately dealing with risk. Dealing with terrorism via the Terrorism Risk Insurance Act (TRIA); Biggert-Waters Act proposes major reforms to the National Flood Insurance Program (NFIP). The ACA requires insurers to offer insurance to all US residents who do not currently have coverage through either their job or a public plan.

horizon over which the event can occur. Studies have shown that people are much more likely to buy insurance or invest in protective measures if an event, such as a hurricane, that has a one in 100 chance of occurring next year is presented as having a greater than one in five chance of happening at least once in next 25 years. And if the disaster does not happen well, the truth is that the best return on an insurance policy is no return at all. One should celebrate not having a major loss! Insurers should construct worst-case scenarios for rare events. They can then determine a premium that reflects their best estimate of their expected future risks factoring in the uncertainty of the events happening. Insurers could also consider offering multi-year policies if state regulators allow them price coverage that reflects risk over that period. A multi-year insurance policy with risk-based premiums coupled with a multi-year home-improvement loan to pay for risk reducing measure may enable policy holders to reduce their overall costs. Having diagnosed what keeps us being the most misunderstood industry, the authors demystify our current state and also suggest prescriptions for overcoming this woe. Maybe anti-diverse at the outset but if each market and geography could discover its own remedies; we may soon be a reinvented entity.
Mr Praveen Gupta is MD & CEO at Raheja QBE General Insurance Co Ltd. The article represents Mr Guptas personal views. He champions the cause of diversity also in his capacity as member of Diversity Action Group, Chartered Insurance Institute (London). He is grateful to The Economist for the seminal themes. www.thediversityblog.wordpress.com

What can be done to make insurance a better policy tool and to avoid adverse side effects of the well-intentioned programmes already in place?
One way to convince people, prescribed the authors, of the long-term benefits of insurance is to stretch the time

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