gender pay gap

Gender Pay Gap Report 2019/2020

"Embracing all contributions, valuing diverse opinions and making every voice heard are part of our core values."

Mark Hartigan, CEO

Gender Pay Gap report

“Embracing all contributions, valuing diverse opinions and making every voice heard are part of our core values. Central to this is creating a business that has a more even gender balance.

While companies do not need to disclose their gender pay gap this year due to the on-going Covid pandemic, I feel it is important not to let this important issue slip down the agenda. For this reason, we are publishing our current gender pay gap. We are making progress and our mean gender pay gap decreased by 1.4% this year to 28.6% which is ahead of the Financial and Insurance activities sector which sits at 29.5%*.

Clearly at this level there remains much more to do if we are to achieve a balanced business. Where we have seen greatest progress is in the percentage of females in upper pay quarterlies. In the upper quartile over a third are females (36.1%), an increase of 7.1% on 2018/19 and in the upper middle quartile just over half are females (51.5%), an increase of 4.9% on 2018/19.

Closing the pay gap will require commitment and action over a number of years. We know what we need to do, we are determined to do the right thing and I’m confident in the plans we have in place.

I can also confirm the data in this report to be accurate.” ~ Mark Hartigan, CEO

*Source Office of National Statistics 7 December 2020

What is the gender pay gap?

All UK companies with at least 250 employees are legally required to report their gender pay gap on an annual basis.

This is a measure of the difference between all males’ and all females’ average pay across the whole organisation.

It is not the same as equal pay which deals with the pay difference between males and females who carry out the same jobs, jobs that are rated/graded the same, or work of equal value.

Read more on gender pay.
Equal pay means that males and females in the same employment performing equal work must receive equal pay.
The gender pay gap is different and measures the difference between males and females average earnings across an organisation (or the wider market).

Gender Pay vs Equal Pay diagram

Fair and equitable

We’re confident that pay at LV= is fair and equitable.

This is because we regularly review market pay benchmarks based on band, job and location against a large source of market data. We also continue to make improvements to our bonus and salary review processes to better ensure all employees are treated equally.

We share the ambition of the Government to see gender balance at all levels across financial services firms. As a diverse and inclusive employer it’s imperative we take steps to tackle our gender pay gap. We understand why we have a gap today, and we continue to take the steps we need in order to close the gap.

Our results

We’re encouraged to see our mean gender pay gap decrease by 1.4% this year to 28.6%. There is still a lot of work to do and we are committed to continuing to close the gap. Where we are seeing good progress is against our target for female representation in senior roles. We have set ourselves targets of having 33%, or above, female representation on our executive team and their direct reports and 40%, or above, representation at our senior bandings (Bands C-E.) As of September 2020, we have 41.9% female representation at executive and direct report level and 43.0% at Band C-E. You can read more about what we’re doing in the “Gender Pay Gap – What Are We Doing?” section below.

	2018/19		2019/20
	Median	Mean	Median	Mean
Gender pay gap	30.7%	30.0%	27.8%	28.6%
Gender bonus pay gap	37.5%	59.1%	35.9%	48.2%

	2018/19		2019/20
	Median	Mean	Median	Mean
Gender pay gap	30.7%	30.0%	27.8%	28.6%
Gender bonus pay gap	37.5%	59.1%	35.9%	48.2%

Gender pay gap data

Understanding our gender pay gap data:

Mean - the average value of the data we’re using
Median - the middle value of the data we’re using when the data is ordered consecutively

When we compare with companies similar to LVFS we look at organisations who undertake Insurance, reinsurance and pension funding, (except compulsory social security) activities
A positive mean / median value means that the average of all male salaries is higher than the average of all female salaries.

Structural gender balance between the pay quartiles

The quartiles represent our employees ranked by hourly rate from highest to lowest and evenly split into quartiles. We're confident that pay at LVFS is fair and equitable and we believe that our gender pay gap is largely a result of the structure of our workforce. We have a higher representation of males in the most senior roles and a higher representation of females in more junior roles – a position we would like to see change and one we have made some progress on over this year with a higher representation of females in the upper quartiles when compared to 2018/19.

	2018/19		2019/20
Quartile	Female	Male	Female	Male
Upper	29.0%	71.0%	36.1%	63.3%
Upper Middle	46.6%	53.4%	51.5%	48.5%
Lower Middle	59.5%	40.5%	63.8%	26.2%
Lower	66.3%	33.7%	69.6%	30.4%

	2018/19		2019/20
Quartile	Female	Male	Female	Male
Upper	29.0%	71.0%	36.1%	63.3%
Upper Middle	46.6%	53.4%	51.5%	48.5%
Lower Middle	59.5%	40.5%	63.8%	26.2%
Lower	66.3%	33.7%	69.6%	30.4%

bonus payment

Proportion of males and females receiving a bonus payment

In the 12 months preceding 5 April 2020.

There is a -2.3% difference between the proportion of males and females who received a bonus. This means that more females than males were in receipt of a bonus in the 2019/20 period. These bonus calculations include any type of bonus payment (annual, sales incentive, all other) received plus any long term incentives (LTIP).

GENDER PAY GAP – WHAT ARE WE DOING?

How LVFS is tackling its gender pay gap

We believe fostering a diverse and inclusive culture is key to the successful delivery of our future strategy.

While we recognise that we need to continue our efforts on increasing the female population at senior levels within LV=, this is only one part of the equation.
Taking a broader view we also want to continue supporting all areas of our existing Diversity & Inclusion programme (disability, multi-cultural, sexual orientation and gender) to further foster an inclusive culture in order to bring about real change.

What's next?

We have an understanding of our gender pay gap and have identified a number of actions.

There are broad, complex and varied causes of the UK gender pay gap, and no short term solutions. We recognise that the measures we're taking to reduce our gender pay gap will need time to take effect before a meaningful impact is made.

Board diversity policy

LV= recognises and embraces the benefits of having a diverse Board. We see it as an essential element in maintaining a competitive advantage. A truly diverse Board will benefit from differences in the skills, regional and industry experience, education and professional background, race, gender, and other qualities of Directors. These differences are considered in determining the optimum composition of the Board.

All Board appointments are made on merit and reflect the skills and experience the Board as a whole requires to be effective. The Corporate Governance and Nomination Committee (‘NomCo’) reviews and assesses Board composition and recommends the appointment of all new Directors to the Board.

In reviewing Board composition, NomCo considers the benefits of all aspects of diversity in order to maintain an appropriate range and balance of skills, experience and background on the Board.

In identifying suitable candidates for appointment to the Board, NomCo considers candidates on merit against objective criteria and with due regard for the benefits of diversity on the Board.

As part of the annual performance evaluation of the effectiveness of the Board, Board Committees and individual Directors, NomCo consider the balance of skills, experience, independence and knowledge of the Society on the Board and the diversity representation of the Board.

‘Inclusion’ is now one of our four new values: For LVFS, being inclusive is all about embracing all contributions, valuing diverse opinions and making every voice heard

To bring about real change we believe focus is required on building inclusion, as well as diversity.

Actions speak louder than words and to be truly successful our values need to be ‘lived and breathed’ through the actions we take and how we operate as a business. Our values form a key part of our performance management process and evaluation. Our people are measured, rewarded and held accountable both on ‘what’ they deliver and ‘how’ they deliver.

As part of embedding our new values we ran workshops with our managers where we explored inclusive leadership- building awareness, commitment and shifting behaviours.

Supporting our parents through the pandemic and working with the Chartered Insurance Institute to develop financially inclusive flexible working good practice for Financial Services

The Equality and Human Rights Commission has highlighted flexible working as its primary recommendation to improve gender equality in the workplace and tackle the gender pay gap.

We recognise that there is a huge demand for permanent roles that offer flexible working options, giving employees flexibility on where, when and the hours they work. At LVFS many of our people benefit from fixed and non-fixed flexible working patterns.

The pandemic has shone a spotlight on the importance of flexible working particularly for our parents who have been balancing childcare, home schooling, caring, home and work responsibilities. With the majority of our population are working from home we have seen that flexibility and work life balance is both really important for our people’s wellbeing and their productivity more generally.

In 2019 we worked with the Chartered Insurance Institute (CII) ‘Insuring Women’s Futures’ market-wide flexible working initiative. The workstream focused on redefining agile working with the aim of improving the profession’s gender balance by enabling talent of any gender to have rewarding careers, balancing caring and professional roles. As part of the manifesto proposals published in 2020, the CII encouraged employers to sign up to two pledges and show leadership in support of women’s financial resilience. We’re proud to be standing with the CII and a number of other financial organisations in committing to:

Financial Flexible Working pledge – we’ll work to ensure that at every point where our employees make a change to their working arrangements, they are prompted to consider the immediate and longer-term financial implications of this change.
Inclusive Customer Financial Lives pledge – we’ll work to ensure that at every customer interaction point we adopt an inclusive ‘whole customer’ approach, helping customers to consider the impact of their life circumstances and potential changes, and empowering them to achieve a positive outcome.

To ‘super charge’ and celebrate our talented females, who have the desire and potential to thrive.

As part of our commitment to ensure equal opportunities and support for all employees to advance their careers, we have developed a targeted development program for women.

People on the program benefit from a blended learning approach with access to an external coach, psychometric assessments such as Myers Briggs Type Indicator (MBTI), creation of a robust development plan, tailored external development activities to meet individual and group needs, a learning support network and much more.

We also apply a gender lens to our Board and Executive roles succession plans, where the gender mix of succession contributes to executive pay. Overall 55% of the identified talent population is female and we are supporting their development with targeted career conversations.

Listening and responding to the challenges faced by our women through COVID-19

There is growing evidence of the potentially disproportionately negative impact on women of COVID-19. We used our engagement pulse survey in May to really listen to the experiences of all our colleagues, and specifically the females within our business.

As a result of the feedback we launched a ‘Calm amongst the chaos’ coaching programme and a series of expert led parental webinars. While these were open to all, they were designed in response to female specific feedback and insight from our gender network.

The webinars were designed to support parents during this challenging time to balance home-schooling, working, caring and managing the home. Lorraine Lee, a childhood education and training specialist, provided very practical guidance on a number of issues ranging from mental health, school holidays, work life balance, how to manage conflict and address feelings like guilt and pressure and more. We received excellent feedback – people were able to make real changes leading to better family and work outcomes, and build connections across our internal community.

We also ran a number of virtual ‘Calm amongst the chaos’ coaching programme cohorts. Run by a certified women’s coach this programme has been built to address feelings of overwhelm and build personal resilience enabling participants to find more energy to achieve what’s important to them, pursue their career ambitions and harmonise work and home.

Supported by the HM Treasury Women in Finance Charter these awards are Europe's largest diversity initiative in the Finance sector, recognising the high-achievers, advocates, and role models for women in the industry.

We have supported and sponsored these awards since they launched in 2017. In 2020 we were thrilled to have two shortlisted nominations of our own; Lisa Simmons for Legal Advisor of the Year and Anna Rogers for Insurance Leader of the Year.

Women in finance

Women in Finance Charter (WIFC)

Signing up to the Women in Finance charter in 2016 is another way we’ve shown our commitment to supporting gender diversity. This includes our executive team and board-endorsed commitment to increase the proportion of women in senior positions.

We’re pleased to announce that we’ve exceeded both of our pledges; to reach 40%, or above, female representation in senior roles by 2020 and 33%, or above, female representation on our executive team and direct reports by 2019.

Experience of developing female talent pipelines shows us that we will change our organisation ‘one appointment at a time’, and our success has been driven by a number of factors including our leadership teams’ commitment and sponsorship. An increase in female representation in our senior roles will support a reduction in our gender pay gap. We know that this is just the start to some really positive changes and we’re encouraged by the progress we’ve made.

We continue to monitor progress towards gender parity on our executive team and direct reports and have set a target to continue to achieve 43%, or above, female representation in our senior roles by 2021.

WIFC commitments:

We’ve committed to achieving 43%, or above, female representation at senior levels by the end of 2021.
We’ll annually publish our progress against our targets.
A member of our executive team is responsible and accountable for gender diversity and inclusion
These targets are embedded in our executive teams’ performance plans and performance against these aspirational targets will be directly linked to performance-related pay.

Targets and statistics

LV= set group targets from 2017 which included both our general insurance and life and pensions businesses. At the start of 2017, 26.2% of our executive team and direct reports were female and 36.4% of our senior management were female. Since establishing these targets, we completed the sale of the general insurance business on 31 December 2019. LV= General Insurance (LVGIG) is now a subsidiary of Allianz Holdings plc. We’ve re-calculated the starting point for the life and pensions business which is now LV= Financial Services Limited (LVFS)**.

Level	Gender	2018** Starting Point	September 2018	September 2019	September 2020	Target-Future State
Executive Team and Direct Reports*	Female	34%	39%	39.5%	41.9%	Maintain 33% or above (FTSE target)
Senior Management	Female	36.2%	36%	39.7%	43%	42%
All Employees	Female	51.3%	52.5%	53%	55.8%
All Employees	Male	48.7%	47.5%	47%	44.2%

Level	Gender	2018** Starting Point	September 2018	September 2019	September 2020	Target-Future State
Executive Team and Direct Reports*	Female	34%	39%	39.5%	41.9%	Maintain 33% or above (FTSE target)
Senior Management	Female	36.2%	36%	39.7%	43%	42%
All Employees	Female	51.3%	52.5%	53%	55.8%
All Employees	Male	48.7%	47.5%	47%	44.2%

As LVFS has a population of circa 1500 employees it can be heavily impacted by minor role changes. We'll continue to focus our efforts on taking action to improve our gender balance especially at senior management, where progress is still required. By setting targets and taking action we're moving closer towards gender balance.
We want to make sure that the skills and capabilities of the entire workforce are recognised and nurtured. This is about levelling the playing field where everyone can succeed on merit.

We’re confident that as we progress towards our targets - driven by the successful implementation of our programme of activity and an increase in female representation in our senior roles - our gender pay gap will reduce. We know we’re on a journey and we’re excited and committed to making real progress.