Insurance workforce diversity improves but more work is needed
Industry-wide diversity efforts show modest signs of progress as non-white insurance employees increased by 1.6% YOY in 2019.
As the insurance industry seeks to improve minority representation, new data shows that despite modest improvements in the insurance workforce over the past decade, diversity still lacks at the top levels.
According to data S&P Global Market Intelligence compiled from the U.S. Bureau of Labor Statistics, 21.4% of employees in the U.S. insurance workforce considered themselves “non-white” in 2019, increasing from 19.8% in 2018. Nearly a decade earlier, in 2010, the percentage of non-white insurance workers was just 15.3%.
The analysis also shows that 12.9% of the insurance workforce was made up of Black or African American employees in 2019, up from 2.0% in 2010. Additionally, Asians represented 6.2% of the workforce last year, increasing from 4.4% in 2010. Employees in the “other” category, including American Indian, Alaska Native, Native Hawaiian, or other Pacific Islanders, represented 2.7% of the insurance workforce.
Employees of Hispanic or Latino ethnicity are not specified in the data.
Top-level diversity needs work
It was only a few decades ago when Black Americans began perceiving insurance as a viable career option, Jerald Tillman, owner of J.L. Tillman Insurance Agency and founder of the National African American Insurance Association, told S&P Global Market Intelligence.
Tillman also shared how he lacked Black mentors or role models within the insurance industry — an experience Black insurance professionals continue to face in 2020, experts say, as executive seats are primarily filled by white males industry-wide.
A recent survey from Marsh and Latin American Association of Insurance Agencies (LAAIA) also found similar struggles among Hispanic insurance employees. Participants in the study said they don’t feel supported enough to climb that ladder at their respective companies: “They hire Hispanics, but then it is hard for them to advance since they don’t have the right support system to reach the top,” said one survey partaker.
How a firm’s boardroom or C-suite looks like can be the ultimate ”proof point of a company’s inclusion and diversity agenda,” Susan Johnson, chief diversity and inclusion officer at The Hartford, said during an American Property Casualty Insurance Association conference. “I appreciate that a company might be committed to and value diversity, but show me,” she added.
George Nichols, president and CEO of the American College of Financial Services, told S&P Global Market Intelligence that diverse leadership teams could also benefit a company’s bottom line. He referenced research that has found a correlation between diverse leadership and above-average profits. Nichols also emphasized the value of a company’s workforce, reflecting the demographics of its customer base. Consider that many non-native English speakers in the U.S. would prefer to speak with someone in their first language about their insurance, which is especially true in the Hispanic community.
“You can choose to wait until that happens to change your business model, or you can get in front of that and begin to change your business model and have a longer-term relationship, a better understanding of [your] client base,” Nichols said.
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