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Insurance industry urged to create diverse workforce

Insurance industry urged to create diverse workforce

NEW YORK — Creating a diverse and inclusive workforce in the insurance industry requires actually changing internal systems to accomplish true equity, along with engaging middle managers in these efforts, observers say.

American International Group Inc. is making a major push on equity in 2016, including implementing an equity management team to examine and “attack” issues such as unconscious bias, Walter Hurdle, chief diversity officer for the New York-based insurer, said at Business Insurance's 2015 Women to Watch conference in New York City Tuesday. The committee will also take a “hard look” at the protocols and procedures within the company that lead to inequitable outcomes and develop specific recommendations to correct for those processes, he said.

“I think one of the most important things about addressing equity is to have the courage to really look at your organization, where it really is, and especially in our industry where you know the equity hasn't been there,” said Nichole Barnes Marshall, global head of diversity and inclusion with Aon P.L.C. in Chicago.

This year, Aon “lifted the rock” and looked at every part of its business to get a clearer picture of the patterns of inequity across the organization, she said. Her responsibility and that of the executive leadership in 2016 is to develop strategies to address that inequity, she said.

A subtle difference exists between equality and equity and there tends to be an overemphasis on how to get to equity without considering the process that creates unequal outcomes, said Bo Young Lee, global diversity and inclusion leader with Marsh L.L.C. in New York. For example, a company can conduct a pay scale equity analysis that finds major pay differences and attempt to correct the problem by increasing salaries to achieve equal levels. However, if the system that contributes to unequal pay stands unaddressed, the company will experience the same problem two years later because the system is fundamentally flawed, she said.

“You have to fix the system in order to get to that equity,” she said.

The insurance industry has a major challenge with millennials as an annual leadership survey conducted by the Hartford Financial Services Group Inc. showed the sector to be the third-least preferred industry by millennials, who do perceive themselves as leaders, said Susan Johnson, vice president, diversity and inclusion for the Connecticut-based insurer.

Millennials are by far the most diverse age group, leading to the misperception that they are also more inclusive than other age groups, Ms. Young Lee said.

“They were taught by their parents don't look at color, which has increased their inability to have discussions about racial and ethnic diversity,” she said. “They don't know how to have those conversations so what's happening is they are actually becoming more polarized.”

Another major diversity and inclusion challenge is the “frozen middle” — that layer of middle management that exists between a strongly supportive executive team and the aware and engaged broader population, Ms. Barnes Marshall said. The middle management group is most responsible for executing on behalf of a firm, meaning demands and expectations for the group are “through the roof” and diversity and inclusion shows up as one more item on the list of things they are responsible for, she said.

“We found that with this group, it's important to really teach and support practical behaviors — how do you create an inclusive culture,” Ms. Barnes Marshall said. “There's all this talk about inclusion. Rarely is there a discussion on the mechanics of how to do it.”

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