Backsliding on Diversity
There is myriad research showing the value diversity of talent and diversity of thought bring to a company’s bottom line.
And I think everyone in our industry agrees that now is the time for diversity of thought and innovation. We are facing numerous catastrophic risks that require us to think differently about risk mitigation and transfer. The same old solutions aren’t going to solve these problems, and neither are the same old people.
When I think about the rise of insurtechs and the money that has poured into that sector over the past five to 10 years, I wonder, are we really funding the people who are going to bring this innovation to our industry?
According to Harvard Business Review, 2.8% of venture capital funding went to female-led startups in 2019; in 2020, that fell to 2.3%. The HBR article went on to note that there is speculation that “the pandemic made investors more wary of risks and more likely to stick to their existing networks—which is very much a ‘boys’ club’ and tougher for women to break into.”
Indeed, Axios reported in 2020 that nearly 12.4% of decision-makers at U.S. venture capital firms are women—this number is actually up from previous years—confirming that venture capital is still very much a boys’ club.
I can’t leave this topic without noting that I do see some small pockets of progress being made on this front. Global investor and advisor Astia is committed to investing in high-growth companies with female leaders. With more than 132 investments and more than $30 million directly invested, Astia is chipping away at the VC boys’ club.
Now let’s forget startups for a second and look at agents and brokers. According to the Bureau of Labor Statistics, agencies, brokerages and other insurance-related activities employ 55.3% women (this does not include insurance carriers). But the percentage of women in C-suite roles in all of financial services was 23% for white women and 4% for women of color, according to a 2021 McKinsey report. The bottom line is, if women aren’t being elevated to senior-level, decision-maker roles, we’re not really seeing the true value they can bring to our businesses.
Make no mistake about it, for women to reach these levels, we must commit not only to recruiting them but also to providing them with professional development right from the start so they can see the path toward a future. And yes, the same goes for all minorities in our workforce.
To me, the argument for equity in our workforce seems like common sense. Yet we have very conflicting laws and regulations at this point in time that make it hard for companies to make progress and remain in compliance. This is especially true when it comes to racial diversity.
In his column for Leader’s Edge, The Council’s chief legal officer, Scott Sinder, covers the latest in ESG developments. Among these is the United States Supreme Court decision in Students for Fair Admissions, Inc. v President and Fellows of Harvard College “in which the Court held that the consideration of race by Harvard and the University of North Carolina as a “plus” factor in their college admissions processes violates the U.S. Constitution’s 14th Amendment Equal Protection Clause,” Sinder writes. This led to immediate targeting of businesses with DE&I programs, and, according to Sinder, at least two dozen lawsuits have been filed since challenging a wide swath of DEI initiatives.
The issue of racial diversity in insurance requires much more work, and it will continue to be a goal of The Council to drive progress in that area. But we also can’t give up on gender equity. Some progress is not good enough.