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The insurance industry is more diverse and inclusive than it was 20 years ago, but women, people of color and other minority groups are still significantly underrepresented at senior levels in the sector.
Unconscious bias training, mentorship programs and more recently technological tools help companies develop effective diversity and inclusion strategies, but more work is needed to help the sector attract talent and become more representative of wider society, experts say.
In the early 1980s, when Shelley Yim, San Francisco-based managing director at Aon PLC, began her career, she said women were treated differently than men in the insurance industry, and that “minority women were treated even more differently.”
Diversity and inclusion initiatives were questioned, with conversations revolving around whether these types of programs and initiatives “were worth it,” says Monica Ningen, president and CEO of Swiss Re Canada and the English Caribbean, when she entered the business.
More recently, when Susan Johnson, chief diversity and inclusion officer for Hartford Financial Services Co. Inc., joined the insurer six years ago, she was “taken aback” by the lack of minority representation in the insurance industry.
Jonathan Wheat, middle market account executive in the Los Angeles office of Zurich North America, had a similar experience when he walked into his first day at an insurance training program in Philadelphia about five years ago.
As a black recent college graduate, he said he’d never seen a more “homogeneous” group of trainees. “But I think the focus has really shifted … not just pushing different ethnic groups, but finding the best candidate regardless of where they came from, and trying to see candidates as more than just their grades and schools have allowed a broader group of individuals to be brought in.”
There’s also enough research today showing the advantages of creating a diverse and inclusive work environment has led to its widespread acceptance, said Ms. Ningen. A McKinsey & Co. study found that companies with the most ethnically diverse executive boards had a 33% greater likelihood of increased profitability than companies with the least diverse leadership. “The conversation has converted more to, ‘how do you achieve it?’ and recognizing that it’s not an easy thing to achieve as an outcome.”
While statistics show that the industry has made strides in gender diversity, people of color make up a small amount of insurance professionals at senior levels.
In a 2017 study conducted by Philadelphia-based St. Joseph’s University, women on insurance boards increased from 12.6% in 2013 to 18.7% in 2017, and more than half of insurers had two or more women on their board. While women comprised more than half of all underwriters, claims adjusters, appraisers and examiners in 2016, according to the U.S. Bureau of Labor Statistics (see chart), and some minorities have significant representation in the industry, many insiders say women and minorities are still disproportionately absent from management jobs.
The representation in insurance is still very much majority white male, said Liz Walker, director of enterprise risk and global insurance at Chicago-based Groupon Inc. The broker teams she works with all include women, but there’s little racial diversity on the teams, she said.
“A lot more work needs to be done there,” Ms. Walker said. “I don’t think it’s because of a lack of effort.” “I don’t think it’s a surprise to anyone across the insurance industry that we have some legacy blind spots that we’ve had to work through over the last decade,” said Alex Amonett, Seattle-based global leader of inclusion, diversity and colleague experience for Marsh LLC. “As we look at the landscape now, we’ve never had a stronger army of leaders and colleagues who understand not only the business case for inclusion and diversity, but are truly embracing their individual responsibility and accountability for moving that dial forward.”
Middle management ranks can cause roadblocks for diversity strategies, some experts say (see related story).
One strategy being used to create a more diverse workforce is unconscious bias training, said Amy Waninger, founder and CEO of McCordsville, Indiana-based Lead at Any Level, a diversity and inclusion consulting firm. Unconscious, or implicit, bias is prejudice in favor of one thing, person or group that is triggered by quick judgments made by the brain.
There’s a significant relationship between implicit bias and real-world behavior, according to an analysis of more than 150 studies published in the Journal of Personality and Social Psychology.
Swiss Re introduced diverse sets of both interviewers and interviewees as a way of removing unconscious bias during the interview process several years ago, said Ms. Ningen. When the company is interviewing candidates, human resources is tasked with making sure that candidates come from a variety of different backgrounds.
“It’s really to ensure that we have a good, diverse slate of applicants … it doesn’t supersede hiring the best candidate,” she said. “When it comes to interviewers, people have the tendency to like and hire people like them. We look at the panel that’s interviewing and bring diversity into that. We have found that it yields better diverse outcomes.”
Blind resume screening is another strategy for reducing unconscious bias during the hiring process, said Margaret Resce Milkint, managing director of The Jacobson Group, an insurance executive search and staffing company based in Chicago.
“With unconscious bias, everybody knows what it is, everybody knows everybody has it, it’s how do you combat it?” she said. “You do it with intentionality. Being able to educate and create awareness and openness goes hand in hand with belonging.”
Marsh recently introduced an approach to reducing bias through customized diversity and inclusion toolkits. Mr. Amonett said the kits contain information on issues such as creating diverse and inclusive client-facing teams, how to be cognizant of D&I issues when answering a request for proposal, information on fluency and consistency in inclusive language and tips and competencies that employees can apply to their day-to-day jobs.
Creating mentorship opportunities
Helping underrepresented professionals find a career path and a mentor to help pull them up through ranks remains a challenge in insurance, said Ms. Waninger.
“If we’re only connected to people like us, we pull people like us up and we’re perpetuating the cycle,” she said. “We want to find the next generation of C-suite leaders and help them diversify their networks today, so that over the next 10 or 15 years, they’re bringing people with them from all walks of life. If we just keep mentoring and having coffee with the same people over and over … the same people who look like us, we’re never going to change this.”
When Bonnie Boone, executive vice president at Arthur J. Gallagher & Co., was rising in the ranks in the industry, she was inundated with requests from women seeking direction. At the time she worked for Marsh, and eventually she created an outreach group for black women in insurance called the African American Female Network for Commercial Insurance.
Each month, except during the summer, she hosts a lunchtime phone call with women employed at insurance agencies, brokerages and other companies across the country and in Canada, Bermuda and London. About 225 women participate in the calls, and the network has no dues or prerequisites, other than a phone call with Ms. Boone herself and the verbal pledge to help out others in the group.
What Ms. Boone, who in July was named one of the most influential women in corporate America by Savoy Magazine, would like to see more of is accountability on the part of the industry to work to bring up people of color.
While working for Mountain View, California-based LinkedIn Corp., Charu Sharma noticed a similar lack of mentorship and sponsorship opportunities for women and underrepresented minorities.
“I wanted to make it more accessible for all professionals to get the same access through mentoring,” she said, which led to the development of San Francisco-based NextPlay.Ai, an app that helps pair mentors and mentees. Individuals create profiles and answer a series of questions, which allows the software to create a mentor/mentee match and provides resources to help facilitate conversations.
A mentee may request to be matched with a leader who is a woman of color, a working parent, or someone in another area of business that the worker desires to learn about. Currently, NextPlay has about 30 client companies.
Businesses are looking into how to create opportunities for underrepresented groups, and Mr. Wheat said he hopes to see more projects that enable workers to prove their capabilities or low-level leadership roles available to create opportunities for those workers to prove themselves and move up, which will then later broaden the diversity of organizations in upper management.
The key question is how to get executives “not part of ethnic groups to be mentors to younger, underrepresented groups to allow them to build those skill sets?” he said. “I think everyone is trying to figure out that right now.” “We’re all facing similar challenges … everyone is concerned about the mass of intellectual capital that will be leaving the industry in the next five to 10 years due to retirement,” said Ms. Yim. “You have to demonstrate that … you really want to have the best talent, and it has to be diverse because the client base is diverse and becoming more diverse.”
If your company is thinking of embarking on a diversity and inclusion program, your top three priorities, based on the 2019 Business Insurance diversity survey, should be to demonstrate fairness in performance and compensation decisions, increase the focus on retention and development of diverse talents, and ensure diversity at all levels of management.