Regulator Focus on Driving Diversity in the Insurance Industry
This session at Business Insurance’s Absolute Inclusion Conference gathered industry regulators to discuss progress in creating a more diverse insurance industry.
Dave Jones, Commissioner of Insurance, State of California
According to Commissioner Dave Jones, California is home to the majority of the nation’s diverse suppliers. Every one of those diverse suppliers wants the ability to compete on price and quality and demonstrate what they can do. This caused him to investigate if the insurance industry was purchasing goods and services from diverse suppliers. There was no data on this.
As a result, he created the Insurance Diversity Initiative that includes three components: The Insurance Diversity Task Force, The Annual Diversity Summit & Matchmaking, and the first of the nation’s surveys to inspect diversity on insurer suppliers and on governing boards.
Since creation, they have seen an increase in diverse spend (63% since 2012), an increase in companies conducting outreach to their suppliers and an increase in tracking their spend with diverse suppliers. You can only manage what you measure and he believes, had they not started collecting the data, we would not have experienced such growth.
Studies on diversity on governing boards yielded useful information as well. For instance, companies with gender diversity are 15% more likely to have financial returns above the industry median and those with ethnic diversity are 30% more likely. Still today, 21 companies have no women on their boards and 45 companies have no people of color on their boards. This is something that needs improvement.
Latest developments: California, New York, Minnesota, Oregon, Washington and Washington D.C. are now moving forward with a national survey that will track and publicly report the supplier diversity spend and board diversity for insurance companies placing $300 million or more in premiums. The survey was issued to insurers on June 1, 2016, and will have an impact on over 75% of the nation’s insurance companies. Results will be reported at https://www.insurance.ca.gov/diversity.
Phillip L. Carson, Associate General Counsel, Director of Financial Regulatory Policy, American Insurance Association (AIA)
According to Phillip Carson, enhancing diversity and inclusion is an important goal at the AIA. Activities fall into several areas:
- Acknowledging and embracing that diversity and inclusion needs to begin at the top of each organization.
- Building partnerships locally and with educational institutions. This is a long-term initiative to enhance a more-diverse pipeline of talent.
- Partnering with community and professional organizations to reach out to communities that may be under representatives.
- Developing programs so that diverse vendors get a seat at the table. Spending has economic benefit and it will flow into the communities.
According to Carson, it makes good sense for companies to develop relationships with a broader understanding of various communities. As businesses, it is in their best interest to be more diverse, engage with that diverse market, hire from that diverse market and develop products for that diverse market.