Gender Pay Gap Report 2022

www.animalfriends.co.uk

About Animal Friends Insurance...

Wes Pearson Chief Executive Officer At Animal Friends, we are guided by three core values of being kind-hearted, passionate, and courageous. Through these principles we are building an

Tanya Johnson Chief People Officer

Over the last three years, the foundations of our business have significantly changed. The pandemic forced us into a new way of working that

environment that gives each colleague the opportunity to thrive, be their authentic self, and feel empowered to raise their voice and challenge the status quo. We are not afraid to grow from our mistakes, to take each learning and use it to drive meaningful change, for our colleagues, and for our customers. The road to equality and equity is long and not without challenge, but we have a clear and ambitious sense of direction here at Animal Friends. We believe that through our uniqueness and our individual experiences, we gain new perspective and opportunity to build stronger connections and an even more successful organisation. We trust in doing the right thing. We trust in one another. We trust that by working together, we can turn our vision into a reality. Our colleagues Companies of over 250 employees are required by the government to produce an annual report, and we are pleased to publish our fourth Gender Pay Gap Report produced from a snapshot of our company in April 2022. Total number of employees captured in the April 2022 report – 448.

meant we had to adapt and learn quickly, but it also gave us an opportunity to review how we recruit and retain talent, and really explore the type of business and culture we want to build. We’ve taken a bold step to cement our flexible working into a core policy while other organisations are choosing to revert to previous practices. We’re incredibly proud of this new approach and believe that it sets us apart as an employer, opening the door to greater inclusivity, diversity, and equity. With this path firmly set in late 2022 , our focus has now turned to further enriching our colleague experience.

61 .4% 38.6% men 61.4% women

Gender Pay Gap Report 2022 – Animal Friends Insurance

Our gender pay and bonus gap

What is the Gender Pay Gap? This is the difference in average earnings between males and females, given as a percentage . However, it means that even if all colleagues are paid fairly for their roles, should a business have more men in senior positions, and more women in junior positions, a larger gender pay gap will be reported. Mean Pay Gap 2022 Report mean gap is 29.2%

Mean vs. Median – What’s the difference? The mean is calculated by adding up all the salaries of the male colleagues and dividing this by the number of men we employ. Then the same is done for female colleagues. The mean pay gap is the difference between these two numbers, given as a percentage. The median is simpler – calculated by ordering every male’s salary from the lowest to the highest, and picking the number directly in the middle. This is also done for the females. The median pay gap is the difference between these two numbers, given as a percentage. While our pay gap metrics have widened compared to our 2021 report, this is largely due to an increase in recruitment for areas that traditionally attract male applicants and, due to the competitive nature of these specialisms, are also typically higher paid. On the following pages you can read more about the work we have been doing, and continue to do, to tackle this challenge along with other initiatives we’ve put in place to better support our colleagues.

29. 2%

Median Pay Gap 2021 Report median gap is 35.1%

35. 1%

Mean

Median

Mean

Median

Insurance*

17%

11.8%

Financial Services*

32.2%

28.8%

Animal Friends

29.2% 35.1%

Animal Friends

29.2% 35.1%

Difference to sector

+12.2% +23.3%

Difference to sector

-3%

+6.3%

*Data source: Office of National Statistics, 2022 Gender pay gap

Gender Pay Gap Report 2022 – Animal Friends Insurance

Pay Quartiles

Lower (0-25%)

Upper Middle (50-75%)

Quartile

70 %

52 %

Men %

30% 70%

Men %

48% 52% 6.4%

Women % Mean Gap Median Gap

-5.1%

1.0%

12.7%

Lower Middle (25-50%)

Upper (75-100%)

Quartile

77 %

38 %

Men %

23% 77% 1.7% 1.3%

Men %

62% 38% 6.6% 5.8%

Women % Mean Gap Median Gap

What are pay quartiles The information above shows the percentage of men and women employed by Animal Friends Insurance within four equally sized quartiles based on their hourly pay rate in April 2022. Quartiles are calculated by listing the pay rates for each colleague, from lowest to highest, splitting the list into four equal-sized groups and calculating the percentage of men and women in each group. Our quartiles explained Our median pay gap is smallest in the lower two quartiles, which typically include structured salary levels for roles which are not negotiated on joining the company. The pay gap is largest in the upper two quartiles, which is typically what drives a gender pay gap. At Animal Friends, as a greater number of males are employed in senior positions than in the lower two quartiles, this is driving an increase in both the mean and median gaps. Please visit page 6 to read more detail on the reason behind this increase.

Gender Pay Gap Report 2022 – Animal Friends Insurance

Mean Bonus Gap – 46.9%

our flexible working policy and our commitment to supporting new and existing talent at Animal Friends. For the second year at Animal Friends, the median bonus gap – which accounts for extremes at either end – was 0, which is significantly lower than the average gap in Financial Services (26.5%). At the time of this report, 41 women and 5 men were part-time workers.

46. 9%

Median Bonus Gap – 0%

0 %

12.1% more women than men received a bonus

Year on Year comparison 2021 Mean Bonus Gap was 81.4%

12. 1%

81. 4%

A higher proportion of women than men received bonus pay in the 12 months prior to April 2022 at Animal Friends, with 77.1% of women and 68.8% of men receiving bonuses. This difference can be attributed to more men than women joining Animal Friends outside of the qualifying calendar period for bonuses and, as such, becoming ineligible to receive a bonus. Our mean bonus gap remains higher than the Financial Services average (36.9%) but has fallen significantly year on year as a result of lower bonuses being paid at the most senior level. Bonus pay gaps are not adjusted for the number of hours worked. Therefore, a larger number of women working part-time will lead to a larger bonus gap, as bonuses were pro-rated for part-time working. We had a large increase in the number of women working part-time in this report (41 compared to 29 the previous year) which we believe is an excellent reflection of

2021 Median Bonus Gap was 0%

0 %

The mean bonus gap for 2022 (46.9%) has fallen but the median bonus gap has remained steady with our 2021 report at 0%. It is encouraging to see that our median bonus gap has remained at zero for the third year in a row.

Gender Pay Gap Report 2022 – Animal Friends Insurance

The detail behind our journey...

IT and data. This has presented us with many challenges in terms of recruitment, and although it has ultimately been the driving force behind the widening of our gender pay gaps, we are proud of what we have achieved in this area so far. LinkedIn workforce data indicates that the proportion of female candidates in the market for many IT and data roles is very low – sometimes as low as 14% – and that the average proportion of women working in technological roles is just 17%. At the time of our report, 25% of our IT team was female and 27% of our Data team was female . The year prior to this, there were 20% females in IT and none in the Data team. Although we’ve made some great progress in these fields, we still believe there is more room to improve. To help address the challenge of the lack of diverse individuals, including women, entering into these specialisms through traditional academic routes, we will be turning our focus to growing our own talent in these areas, encouraging those colleagues with an interest and passion for IT and data to develop their experience and skills through an internal apprenticeship scheme . We are committed to courageously pursuing progress and talent, encouraging open conversations and the application of our own authenticity to all aspects of life at Animal Friends. Our passion for empowering every colleague at Animal Friends, regardless of their lived experiences, gender, sexuality, faith, age, ethnicity, or anything else, drives us to continually push boundaries and ensure our policies and culture are as richly diverse as the team we’re so incredibly proud to support. of the senior leadership roles at Animal Friends were filled by females.” 44 %

Tanya Johnson, Chief People Officer

At Animal Friends Insurance, we are proud to live our values, embody our purpose, and be unmistakably different. It is our goal to continuously strive for

positive change, not only in meaningful outcomes for our customers and the fight for global animal welfare, but in ensuring we are pushing for a culture that fosters respect, inclusivity, equality, and equity. It would be understandable for anybody reading this report to assume from the figures that Animal Friends is not progressing quickly enough, but context is key . While these reports act as a good mechanism for keeping organisations accountable and challenging them to create equal and fair opportunities, the data on its own does not convey the many and significant steps that Animal Friends has taken and continues to take, to support our colleagues on their career journeys, from job application through to retirement. There are many challenges that still need to be faced, but we are passionate about moving the needle on gender equity and diversity . We know that this change, if done correctly and meaningfully, happens over time. At the time of this report, 44% of the senior leadership roles at Animal Friends were filled by females . At the point of publication, April 2023, this figure has increased to 45%. Additionally, thanks to our new agile working policy, at the time of publication 98% of our workforce is now either fully remote or hybrid working , a shift that has enabled the business to attract a diverse range of people, talents, and expertise. Over the past few years, the growth strategy for the business has necessitated the significant expansion of areas which are typically male dominated, specifically

Gender Pay Gap Report 2022 – Animal Friends Insurance

4 Reviewed and refreshed our colleague value proposition (CVP) . This project spanned the entirety of 2022 and will continue to be developed in 2023 and beyond. There are a number of key initiatives that have and will be delivered as part of our new CVP, which include but are not limited to: a. Surveying prospective and existing colleagues to analyse the perception and reality of what it’s like to work at Animal Friends, and whether there are any hidden barriers that may inadvertently make certain groups of people feel excluded. b. Continuing to explore our people data, providing our talent acquisition team with access to demographic insights that enable us to better understand our challenges and how to make improvements to our recruitment process. c. Analysing our job adverts to check for and remove any gender bias. d. Made important changes to the way candidates apply for our roles to increase pay transparency. The salary for each role is benchmarked in line with market data and every role is advertised with a salary range. We also no longer ask candidates for their current salary or salary expectation during the application process, which can be a driver of the Gender Pay Gap. e. Encouraging our People Managers to consider if a role can be fulfilled by alternative working patterns, such as on a part-time or job-share basis. 5 After listening to the concerns raised from across the business, in September 2022, a one-off cost of living support payment was given to all colleagues, with the exception of the Senior Leadership Team, to help ease some of the pressures being faced as energy prices and inflation soared. 6 At the end of 2022, all colleagues had their leave entitlement enhanced , receiving at least 25 days of holiday a year, with an additional day for every 2 years of service (up to 28 days).

What we’ve achieved:

Throughout 2022 and into the opening months 2023, we have implemented a number of initiatives all aimed at turning colleague feedback into tangible and meaningful actions. Collectively, these changes are strengthening our culture, adding a deeper level of authenticity to our narrative, and demonstrating our very real commitment to empowering every individual at Animal Friends.

These include: 1 In December 2022, we announced further improvements to our enhanced pay offering for colleagues going on maternity, shared parental, and adoption leave . We believe that by increasing our support we can encourage a wider range of talent to see Animal Friends as a place they can build their career, at any stage in their life. 2 Introduced a refreshed Performance Management process that not only enables clear accountability in line with our core values and strategic pillars, but also sets in place more robust plans for personal and professional development. 3 In 2022, we created a new strategic project to further develop inclusivity and diversity at Animal Friends. We also took the key decision to invest in a specialist whose sole focus is to work with our colleagues to identify areas of opportunity and build a roadmap of activity that ensures that any changes made are done with authenticity and meaning. Real change must come from a place of understanding and collaboration, it can’t just be about ticking a box. This is a journey and we’re committed to doing it right.

Gender Pay Gap Report 2022 – Animal Friends Insurance

What our colleagues say...

As we look to improve our gender pay gap and mean gender bonus gap, we will: 1 Continue to review benchmarking of all roles in the company and provide our colleagues with a grading structure, so they can see how their role compares to others in the company and how they can progress in their career. 2 Undertake quarterly gender pay gap reviews to identify trends and feed insights into our People and Culture Committee so that further actions for improvement can be taken in real time. 3 Implement Talent Management and Succession Planning to support the future success of the business and better understand the aspirations of our people and support the progression of their careers. This project has been under development since our previous report but has not progressed to a level that we would have liked. The primary reason for this has been because other initiatives that colleagues have told us are more important to them have taken priority. 4 Develop a new internal apprenticeships scheme to help develop the skills and expertise of colleagues who wish to enter new specialisms and start a new career journey within Animal Friends. 5 Introduce a matched pension contribution scheme, enhancing our existing pension provision , to make sure that all our colleagues feel supported and valued throughout their career journey.

Every year, we ask our colleagues for their feedback on how they feel we are doing and where there are still areas for improvement. We believe that our colleague-centric approach has had an overwhelmingly positive impact on our people, and that by simply listening to what’s important and taking action to address these challenges, even if small, can have a big impact. The results from our 2022-23 Colleague Engagement Survey told us that 84% of colleagues are very proud to work at Animal Friends and 82% sharing that they would recommend us as a great place to work. 93% of colleagues agreed that everyone here is treated fairly, regardless of race, gender, sexual orientation, or other background. 96% of our colleagues feel comfortable reaching out to their manager when they need help and support.

Completion rate: 88% Last year: 84% (+4%)

88 %

Overall engagement score: 80% Last year: 64% (+16%)

80 %

Job category score: 75% Last year: 65% (+10%)

75 %

Manager category score: 93% Last year: 84% (+9%)

93 %

People category score: 84% Last year: 78% (+6%)

84 %

Organisation category score: 72% Last year: 59% (+13%)

72 %

Gender Pay Gap Report 2022 – Animal Friends Insurance

Our senior leadership team

Westley Pearson Chief Executive Officer

Tanya Johnson Chief People Officer

Patricia Gardiner Chief Marketing Officer

Laura Barry Chief Financial Officer

Richard Mills Chief Operating Officer

Bogdan Szostek Chief Strategy Officer

Andrew Hyde Chief Information & Data Officer

Margaret Traynor Chief Risk and Compliance Officer

Gender Pay Gap Report 2022 – Animal Friends Insurance

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