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Cultivating an increasingly diverse workforce could help determine whether the property/casualty insurance industry thrives or stagnates in the near future, according to industry experts.
But cultural changes also need to be taken into account for diversity to be sustained over the long term.
The industry has a relatively old workforce, they say. Replacing retiring baby boomers with younger workers will be a difficult task because insurance has to compete with industries perceived as being more attractive for the best and brightest.
But simply attempting to create a more diverse workforce in terms of gender, ethnicity and other qualities will not win the battle for talent. There have to be organizational changes as well.
“We absolutely have a lag in cultivating a diverse workforce,” said Elizabeth McDaid, senior vice president of leadership and management resources at the Council of Insurance Agents & Brokers in Washington. “You have to be blind not to see it.”
“I don't think there's a choice,” said Cheryl Vollweiler, president of the Association of Professional Insurance Women and a partner at Traub Lieberman Straus & Shrewsberry L.L.P. in Hawthorne, New York.
“The people coming in are different,” she said. “If you want to have succession, you've got to use those people. If they leave, where are you?”
The industry lags behind some industries, said Brian Little, senior vice president and head of human resources at Zurich North America in Schaumburg, Illinois. He said that “you have to get really talented people to come to work for you” — not just those straight out of college, but potential employees with experience as well.
“You're competing with the best companies in the world for talent,” he said. “We have to make insurance cool enough where the best people want to come work for us.”
Insurance Information Institute Inc. President Robert Hartwig said in an email that to the extent that some segments of the property/ casualty industry or specific employers may lag behind other industries in terms of employing a diverse workforce, it's “primarily because the industry's workforce is a relatively old one.”
Mr. Hartwig added, however, “with up to 400,000 retirements expected through 2020, aggressive hiring into the industry in the years ahead should narrow any imbalances that exist.”
But merely trying to recruit a more diverse workforce will do little good if it is not followed up with cultural changes, say observers.
“A lot of organizations make the mistake by not making any changes in their culture,” said Bo Young Lee, global diversity and inclusion leader at Marsh L.L.C. in New York. Simply targeting a more diverse workforce without changes is a “nonwinning strategy,” she said. “It's not a sustainable strategy.”
The successful company has to look within, and “that's what we're trying to do at Marsh — what do we have to change that resonates?” she said.
“We have to have a strategy for hiring inclusively, and then create the culture that allows them to thrive, said the Council of Insurance Agents & Brokers' Ms. McDaid. Doing so includes instituting what she called “micropractices,” small changes that can change the workplace. This would include such things as celebrating and encouraging women, she said.
Managers also need to mentor more diverse employees, said Ms. McDaid.
“We tend to mentor people who are like us,” she said. “You have to step outside your comfort zone and mentor people who are not like you.”
Chubb Corp. has employee resource groups, said Trevor Gandy, chief diversity officer for the Warren, New Jersey-based insurer. The company has an internal women's leadership conference and mentoring program, he said. Senior leaders are all directly involved, with each of Chubb's senior leaders serving as a direct sponsor of our employee resource groups, he said.
Zurich wants to “be as broad as the customer base that we have,” said Mr. Little. In the United States, the company focuses on groups like veterans, which is “is a very large and diverse group, they bring a lot to the table,” he said.
The company also has a large Women's Innovation Network, of which Mr. Little is executive sponsor. That “helps us understand how we can meet the needs of women and also how to create a more inclusive culture,” he said.
Ms. Vollweiler said the industry hires lots of women at low to middle levels. “I think the gap occurs in getting them to upper management and more senior positions,” she said. “I think that the way to correct the situation is to invest in old-fashioned ways of training, mentoring and sponsorship.”
There's a need for women and members of other groups not traditionally well-represented in insurance management “to make sure they have the tools and opportunity to get to the next level,” she said.
Marsh's Ms. Lee said that U.S. census data shows that a little under 40% of the workforce are members of the so-called millennial generation.
“We are already behind the eight ball in attracting that emerging workforce,” she said. “We don't want to get to the place where we are completely noncompetitive in the work environment. I do think the insurance industry is aware that we have to change. The level of dialogue that is happening between now and three years ago is very different. The challenge is changing that from an intellectual conversation to real actionable change.”
Ms. Lee noted that the London insurance market recently hosted a diversity and inclusion festival called Dive-In to encourage companies to understand the business case for increasing the diversity of the industry.
“I'd love to see the same sort of concerted cross-organizational conversation in the U.S.,” she said.
It's been 10 years since Business Insurance started the Women to Watch awards program.