Diversity is much talked about in today's business world: equal pay, board diversity, employment of diversity, campaigns, etc. Each part of a company is analyzed to determine if and where types of prejudice may be present. Some prejudices are more visible, while other prejudices require a microscope to be applied to the corporate culture and the unconscious bias of employees.
Insurance is not immune to these trends, although insurance is also an industry that is less public eye. There have been no major scandals or customer protests against, for example, operators. Is it because we just have not done it in the spotlight yet, or that things are good enough to satisfy the current employee and customer base?
It is important to analyze how diversity is talked about. More specifically, is the discussion about diversity in insurance companies really transparent and meaningful, or is it too marketing and market-oriented? Throughout the series, I will focus on data and examples to dive into the diversity of the insurance industry.
The current conversation about diversity in insurance
A quick Google search for "diversity in the insurance industry" shows how often the topic is rewritten and discussed. Pages and pages with statistics, opinions and future predictions analyze the importance of diversity in insurance. But what do all these articles, reports and surveys really tell us?
In many ways, this level of discussion is enormously positive. Action is often based on thorough discussion and analysis. By talking about diversity in insurance, we can also see gaps in understanding and help make the conversation mainstream, which can open doors and make employees feel more comfortable being upfront and honest about diversity.
When "Talk" Becomes a Problem
The insurance industry is still at an early stage of openly discussing its diversity issues. Just four years ago, insurance executives signed a letter of commitment at the Business Insurance Diversity & Inclusion Institute Leadership Conference to reaffirm their commitment to increasing the diversity of their companies.
This is a great sentiment, but it is only as powerful as the follow-up measures that make it a reality. In particular, the commitment description does not set a timeframe for increasing diversity, nor does it provide a basic benchmark, even if it creates an annual check-in of progress.
Now, of course, insurance managers will look at diversity from a company. perspective. While diversity was previously considered a societal benefit (and it is, of course), more data is emerging that highlights diversity as a path to innovation and revenue. According to the Harvard Business Review, companies with two-dimensional diversity are 45% more likely to report market share growth and 70% more likely to report that the company conquered a new market. When it comes to insurance, companies in the top quartile for racial and ethnic diversity in leadership are 32% more likely to outperform their peers, while companies in the top quartile for gender diversity are 21
Measures have not been trickled yet
The insurance industry has seen some progress in diversity over the years, but it has been uneven.
The table below compares the diversity in insurance 2014 versus 2019, compiled using data from the US Bureau of Labor Statistics. Unfortunately, "actuaries" had no diversity distribution, so I did not include that occupation.
Source: https://www.bls.gov/cps/ cpsaat11.htm
Overall, the increases over the 5-year range decrease less than, which is a good sign. But it is important that we dig deeper into individual professions.
- Insurance salesman : The diversity distribution has been broadly the same for this profession, although women had a small increase of 3.6%.
- Insurance claims and insurance officers : Increased diversity for white-collar workers is a double-edged sword. On the one hand, it is fantastic that insurance companies are taking in more different jobs in general. But diversity employment in administrative roles can not have such a big impact on culture or decision-making. The high increases for black or African Americans (6.6%) and Hispanic or Latino (5.4%) are about the fact that perhaps managers are simply trying to increase their diversity numbers for a good PR story and not actually influence change.
- Insurance Guarantees
- : This is a very disappointing story. Underwriters are major decision makers in the industry, and there has been a drastic reduction in diversity here. Almost 10% fewer women in 2019 than in 2014. Blacks or African Americans had an equally frightening decrease of 6.4%.
- Claim Adjusters, Evaluators, Reviewers, and Investigators : The star of this occupation is the 6.6% increase in black and African Americans. This is especially important compared to their reduction as insurers as adjusters are equally important decision makers. Outside of this demographic, however, the story is largely flat.
With a few exceptions, the overall story that these data tell is that administrative positions are where most of the diversity rentals that take place in insurance. As an industry, we must ask ourselves: What prejudices make us avoid diversity in decision-making positions?
According to the Insurance Journal, although women make up 60% of the insurance workforce, they hold only 19% of board positions and only 11% of named positions. Only 1% of insurance organizations have a female CEO.
Similarly, a Reuters analysis showed that only three of the 168 senior executives in the top 10 US insurance companies are black. Among the 119 board members in the same company, only 13 are black.
In my next blog post, I will highlight good and bad examples of diversity in the industry and discuss the importance of openness.