4 Steps to Help Diversify the Insurance Industry

Agency Culture, Personal Lines, Small Commercial Lines

Every year, Black History Month provides a natural jumping off point for conversations about diversity, equity and inclusion (DE&I). But even after February ends, it’s essential that insurance professionals continue these conversations year-round.

The population of the U.S. is growing more diverse. By 2060, racial minorities will make up more than half of the U.S. population.

However, the insurance industry remains largely white. According to the 2018 Agency Universe study, 88 percent of principals are white, while only 4 percent of insurance agency principals and producers are African American.

Many insurance companies, associations and agencies are taking steps to attract and retain diverse talent, but we still have far to go.

Studies have shown that diversity and inclusion leads to better business results, higher employee engagement, and better decision making.

As Raina Walton wrote in her article, “Starting Conversations About Diversity in the IA Channel,” “If we in the IA channel are not targeting diverse markets, we’re missing out on a big piece of the pie. And we can only reach those markets if we reflect diversity within our agencies, as well.”

1. Name the issue and educate yourself

Last summer, protests over the police killing of George Floyd sparked many conversations about racial justice. Many companies took a hard look at their efforts around DE&I.

While conversations about race may feel uncomfortable to bring up at work, providing opportunities and spaces for these conversations is a first step toward building more inclusive workplaces.

In her article, “Navigating Inclusive Leadership During Times of Crisis,” Big I Director of Diversity and Inclusion, Whitnee Dillard, recommends that leaders lean in, educate themselves, and take steps to understand their own privilege. As a resource to get started, she recommends visiting the Talking About Race page from the National Museum of African American History and Culture.

2. Get buy-in from leaders to create an inclusive culture

Individual efforts will make little impact company-wide if there’s not a wider commitment to diversity from agency leaders.

Buy-in from leaders can help DE&I efforts move from abstract ideas to strategic goals.

The report “The Journey of African-American Insurance Professionals” from Marsh in partnership with the National African American Insurance Association (NAAIA), recommends getting buy-in from upper management on diversity efforts:

“Recognition of, and respect for, different perspectives must be signaled from the top of an organization and be a strategic priority. Senior management engagement is a crucial element of success, including in such areas as sponsoring and mentoring; rectifying inequities in compensation and promotion; holding others accountable for diversity goals; promoting lines of communication that expose a diversity of ideas, experiences, and personalities; encouraging employees to own their careers; and opening doors for individuals to contribute.”

3. Diversify your recruiting pipeline

The Marsh report found that the biggest barriers to success for African American insurance professionals were a lack of exposure to the industry, lack of networks and lack of opportunities for initial experience (for example: internships, work/study jobs and first jobs).

Study participants pointed to the fact than many insurers hire from within their own networks of friends, family and business contacts.

Changing up recruiting practices and tapping into different talent pools can help insurance companies recruit more diverse talent. Expanding recruiting tactics may also help address the talent shortages the industry has faced in the last few years.

The Marsh report recommends broadening the search. For example, visiting career fairs at historically black colleges, tapping into the talent pools in African-American professional groups (such as NAAIA, Executive Leadership Council, National Black MBA Association and National Association of Black Accountants), and building relationships with college faculty members, business leaders and community leaders who can spread the word about opportunities in the insurance industry.

4. Create mentorship and sponsorship opportunities

It’s not enough to just hire diverse talent, you also have to make sure there are opportunities for everyone in your company to grow their careers.

According the Marsh study, black professionals say they face more obstacles and are given less room to make mistakes. When black professionals don’t see themselves represented at the top levels at the company, and don’t see a path to advancement, they are more likely to leave for another organization or strike out on their own.

In a recent Insurance Journal webinar, Mernice Oliver, founder of the National Association for Advancement of Women in Insurance (NAAWI), said in her time as an insurance professional, she often felt isolated and excluded from advancement opportunities.

“Honestly, as a black leader in the insurance industry, I do believe it was harder for me to advance as opposed to my white counterparts,” she said.

Along with creating clear pathways for promotions, companies can also invest in coaching, mentorship and sponsorship programs.

More resources

Here are just some of the many resources on diversity from around the insurance industry:

Industry associations and diversity efforts:

Read more from around the industry:

Agent for the Future™ Staff

Agent for the Future exists to help independent insurance agents succeed. On AgentForTheFuture.com, we share insights from agents and industry experts.

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