13 June 2018Analysis

Captives sector must embrace diversity and inclusion, says son of Fred Reiss

Creating an authentically inclusive corporate culture is not always easy – but companies that achieve this and embrace a more diverse workforce will benefit, Jonathan Reiss, chief financial officer, Hamilton Insurance Group, told delegates at the annual  Bermuda Captive Conference, which is taking place at the Fairmont Southampton Hotel on Bermuda this week in a keynote speech, which received an outstanding reception at the conference.

“Companies that have captives, have better risk management, they are better managed companies and perform better as a result,” he said. “Equally, organisations that embrace diversity and inclusion are better managed and they too get better results as a consequence of that.”

Reiss explained how he is the lead for Hamilton’s diversity and inclusion (D&I) strategy which is now being formulised and includes input from staff at all levels. He described how he felt it is important or a senior person to lead efforts on this front but also how the issue is one that he is passionate about.

“Hamilton has always championed this issue. We put a stake in the ground on this since our formation and that has been backed up by many things including our former CEO Brian Duperreault which gave an important speech in 2014, when he asked: where are all the women?

“We have always been vocal on inclusion and the diversity and all forms of inclusion. I feel strongly about this issue and making positive change. But I also know this will help the bottom line. It is hard to implement an effective strategy on this but that is also why we must all do more.”

Reiss, who is the son of Fred Reiss, credited with first establishing Bermuda’s captive sector, described how his family, from a working class background, suffered from prejudice and when they first moved to Bermuda. 'The business community here was dominated’ by a local white minority and racism was prevalent. There were exceptions but it felt like a protectionist boys’ club. And bear in mind my dad was a white male – imagine how difficult it would have been for a woman or person of colour,” he said.

He described how his father’s success in the captives space created the platform for further insurance growth on the island with many world-class individuals launching new businesses and sectors on the island. When Reiss then started his career he found, given his father’s legacy, doors were opened to him and he was promoted quickly. But he said he was aware he was benefitting from advantages because of his connections, education and because he was white.

“Unfortunately, the shameful legacy of the past remains unresolved today,” he said. “The issues are not unique to Bermuda but I worry about my children’s future and the unfairness they will be exposed to. I think there needs to be more urgency addressing unfairness and creating an environment that is more diverse and inclusive,” he said.

He said that the majority of companies – in the risk-transfer world and beyond – have a lot of work still to do. He said a 2012 description of the average C-suite of a US corporate as “male, pale and stale” remains accurate for too many companies. “Women remain a distinct minority and persons of colour are almost non-existent. That is true in Bermuda, America and Lloyd’s despite may efforts in recent years.”

He cited statistics that illustrate this. The number of women leading Foture 500 companies actually fell by 25 percent last year. He noted the clock in Davos, Switzerland, that counts down to the world achieving gender parity, which now suggests it will take 217 years.

“Not only does it appear that we are not making progress, we seem to be going backwards,” he said. But he stressed the drivers should be there – both because it is the right thing to do and for business reason. He noted a report by McKinsey that illustrates a statistical correlation between a more diverse leadership team and a company’s performance.

He said that while the pace of change has been ‘glacial’ he acknowledged that there are many reasons for this and it is not an easy problem to tackle. “It is a devilishly complex issue – it is not a tick the box issue. It is a long and winding road,” he said.

He likened the problem to an iceberg where the obvious issues, which might include outright discrimination and bias, only represent the top 10 percent of the problem. There are many complex issues below this including economic disparity, access to education, sexual orientation, unseen disabilities and unconscious bias – these represent 90 percent of the challenge, in his opinion.

“Progress has been made but we need to do more to make the insurance and captive industries more accessible. At Hamilton, we have a saying that we want employees to bring their bring whole self to work – to not worry that differences will affect how they are treated and the opportunities they will get,” Reiss said. “But we appreciate that some of the challenges are deep rooted and not easily solved.”

He stressed that there are reasons to be positive. He said most companies are much better informed and have better data representing their diversity and inclusion. There is a better understanding of what this means and where they want to get to.

“It is tough – especially when you are dealing with historical legacies and unconscious bias – but there are actions companies can take,” he said.

He recommended that companies understand that they cannot tackle the whole issue in one go and instead deal with it in steps. He said they should start by gathering data and, once they understand the picture, set goals and implement specific initiatives around things like training and recruitment designed to tackle the problem. He also recommended learning from others that have done this before. “Take advantage of the knowledge of others; don’t try and reinvent the wheel,” he said

He concluded: “It is not easy. It takes careful planning and a long time to change behaviors and it requires diligence. It is a marathon not a sprint on a long and winding road. But I also believe we are at an inflection point and attitudes are changing quickly. Organisations must be fearless in tackling the status quote for we hold the hopes and dreams of those we hire – and that is what we all need: hope.”