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One way for organizations to become more diverse and inclusive is by hiring diverse talent. The insurance industry, however, has had a mixed record in recruiting diversity, observers say.
"Overall, people historically went into the insurance industry because their father was in it," said Corbette Doyle, lecturer in Leadership Policy and Organizations at Vanderbilt University in Nashville, Tennessee. "Insurance has never been an industry that was highly active in recruiting people out of college or enhancing its reputation with the next generation or doing the things that other industries have done with their workforces," she said.
"The industry does a lot of recruiting by word of mouth. That's because the industry tends to hire more experienced people. Contrast that to Ernst & Young, Deloitte and other firms that hire 6,000 to 8,000 people out of college every year. That's just not happening in the insurance industry," Ms. Doyle said.
The two main problems that are contributing to the homogeneity of the insurance industry are "a desire to hire experienced people and a current talent pool that's not very diverse," Ms. Doyle said. "This cycle makes it harder to recruit diversity into the insurance industry."
On-campus recruiting by insurance industry companies is improving, but it's happening relatively slowly.
"Our industry never had a single college major to recruit from, like accounting. The industry's talent model never made a priority of recruiting large cohorts from colleges and universities," said Bo Young Lee, global diversity and inclusion leader at Marsh L.L.C.
"A lot of people end up in insurance because they had another connection to it, such as a family member. There are a lot of parallel networks feeding into each other. That more close-knit, closed environment inadvertently created a significant barrier to entry for much of our history and created an artificial bubble that was immune from larger societal changes. Now the insurance sector is changing very rapidly, and companies are transforming their business models," she said.
One development that is helping the industry with its talent pipeline is the growth of schools offering risk management, insurance and actuarial science majors. These colleges and universities are producing graduates with skills that are in demand by all companies in the insurance industry. But even some of these schools are not seeing a great deal of recruiting.
"In terms of diversity, the biggest problem is that industry companies lack diversity in their recruiting," said Noelle Codispoti, executive director of Gamma Iota Sigma. The Philadelphia, Pennsylvania-based international risk management, insurance and actuarial science collegiate fraternity represents 70 colleges and universities, and has about 4,000 student members, interested in opportunities across all fields of the insurance industry. "Many of the schools that the insurance industry recruits from are not as diverse as Gamma Iota Sigma schools," she said.
For example, "New Mexico State University and the University of Houston Downtown boast diverse populations of students, and diversity in not just the mainstream meaning of the word," Ms. Codispoti said. "But how many times do NMSU or Houston Downtown appear on a target school list or how many industry companies have set foot on the campus of NMSU in the past six years? The same could be said for many of our schools."
"Part of the problem is that HR and recruiting aren't given decent budgets to permit travel to these more diverse schools," she said. "Current industry employees often go to the schools they or the company's senior management graduated from, and they end up picking people like themselves, so you're also losing out on diversity of thought and background," Ms. Codispoti said.
Debbie Babcock, associate director of the Katie School of Insurance & Financial Services at Illinois State University in Normal, Illinois, said "there is more interest across the board in building the talent pipeline, and our students, like those in other risk management and insurance programs, have a step ahead of other graduates without the insurance knowledge and experience." The school is seeing hiring interest for jobs in reinsurance, claims, third-party administration, brokerage, underwriting, actuarial and other areas, she said. "It's a broad stroke."
"We continue to work toward increasing our diversity through high school outreach programs and partnering with board member companies on various initiatives," Ms. Babcock said. The Katie School has 220 RMI majors and minors, and 150 students in the actuarial science program that is housed within the mathematics department, she said.
"One struggle for companies, however, is keeping RMI graduates challenged during training programs after they're hired. Retaining talent is important and graduates want to see their career path. Successful companies that we see generally have a three- to five-year plan for a new hire, bring in mentors and have the ability to keep the new employees engaged."
Susan Johnson, vice president of diversity and inclusion at The Hartford Financial Services Group Inc. in Hartford, Connecticut, said her company realizes the importance of creating an attractive culture for diverse talent.
"We want to help people understand the distinctions between diversity and inclusion. Diversity is about individuals and all they bring, both in personal and professional experiences. That includes race, gender, age, sexual orientation, disability, ability, life experiences, where they grew up, where are they in their career. Inclusion is very specific; it's an action," said Ms. Johnson. Over the next two years, The Hartford is rolling out enterprisewide training to help employees appreciate those differences.
"Diversity and inclusion is very much a talent play and a business play at The Hartford," she said. "We want to have a strong reputation as a company to work for, to attract and retain talent and to leverage that talent to look at our customers differently and better."
The Hartford has eight employee resource groups, or ERGs, "all focused on specific groups of our employees," she said. "About 30% of our employees are members of an ERG. Our newest ERG is FAN, the Flex-Abilities Network, which is helping employees understand a day in the life of a person with a disability. Another ERG is Yo-Pros, or Young Professionals Stepping Up, which often teams up with other ERGs to help managers understand what's important to millennials and understand what perspectives they bring to create a positive work environment."
Word-of-mouth remains an important tool for the industry's diversity efforts. "When you're recruiting risk management and actuarial students, they become the best ambassadors for your company," Ms. Codispoti said. "If we're not recruiting 25 students at New Mexico State University and other schools, then we just lost 25 ambassadors, who could turn that into 75 ambassadors" for the industry by talking to other students.
Ms. Babcock said, "The best ambassadors for us are students talking to their peers about their own insurance experiences that the industry is a good place to go."