Motor insurers are in the business of predicting behavior – specifically, the driving behavior that causes damage. Like some other socio-demographic categorizations, gender is a predictor of driving behavior. But it is an imperfect predictor. The spread within the gender groups still exceeds the difference between the averages of the groups.
Organizations thinking about issues of gender diversity can learn from this episode in Insurance. Initiatives aimed at increasing gender diversity in the workplace have triggered significant controversy and resistance in some quarters.
In the absence of a perfect metric of talent (or a technology-based fix as in motor insurance), firms must instead rely on predictors. We believe that a firm’s ability to maintain gender diversity at all levels is exactly this: a key indicator for whether the firm is doing enough to recruit and keep a broad spectrum of talent of all types (not only women). A firm that can do better at finding and keeping talented women will become a more attractive workplace for its entire staff.