And while interest in DE&I has grown exponentially, we’ve reached the critical point that requires some broader shifts to maintain the momentum.

Firms are now looking to take their DE&I programming to the next level to truly maximize the value that DE&I brings to organizational health and client relations. Our company, Critical Equity Consulting, recently partnered with The Council to analyze a survey of 47 firms across the insurance and brokerage industry, 70% of which were large firms of over 500 employees and many of which were multinationals. Our findings provided some interesting insights that could help shape future DE&I programming across the industry.

To start off on a positive note, we concluded that successful diversity initiatives have thus far allowed the insurance industry to outpace other industries with respect to the representation of women. Our findings show that, among the companies surveyed by The Council, insurance and brokerage firms were composed of 59% women on average. And of the 45 firms that reported gender demographics, 27 reported being predominantly women in their total employee count. These findings are well known to industry insiders. In a recent podcast, Kweilin Ellingrud, a senior partner at McKinsey and Company, shared a similar understanding, stating that insurance “is between seven and 14 percentage points more diverse compared to all other industries, and the entry level is two thirds women.”

Though the growth of gender diversity among firms is something to take pride in, there is still much work to be done. One issue is that diversity overall has not yet effectively translated into diversity in leadership positions. Our findings show that, while 41% of the industry identifies as male, that ratio jumps to 65% when it comes to positions of leadership. A recent U.S. House Committee on Financial Services report on diversity and inclusion offered similar results: that, among the companies surveyed in 2021, an average of only 33.5% of executives identified as women. The representation of female leaders grows even smaller as firms scale. An S&P Global Market Intelligence briefing determined that “approximately 21.4% of executives and officers at the large insurers that trade on the NYSE or Nasdaq are women.”

Gender diversity is also just one element of the greater DE&I pie. Despite 83% of industry firms committing to racial diversity by 2021, the industry continues to trail behind what is needed to effectively serve an ever-diversifying and globalizing world and right the structural wrongs of the past. In her podcast interview, Ellingrud goes on to say, “Diversity reduces as you look at more senior positions in the talent pipeline. Women of color are deeply underrepresented. We need to fix the talent pipeline not only in terms of gender diversity but also in terms of racial diversity, at least in North America.”

The Council’s survey confirmed this near homogeneity in the industry when it comes to racial diversity. Firms that reported their demographics were on average 73% white overall and 85% white in leadership roles (executive teams and senior-level officers). The U.S. House committee also reported that insurance is falling behind on employing people of color and that “the largest insurance companies had a lower percentage of employees of color (30.5%) compared to the largest banks (42%) and the largest investment firms (40.6%).” It goes on to reveal that racial diversity in executive positions was significantly lower, with an “average of 16.2% of executives identifying as people of color.” This is also not to say that racial demographics are equally represented by population. For example, the House report concluded that less than 1% of employees of surveyed firms identified as American Indians or Alaska Natives.

Lastly, individuals with disabilities were the least represented overall according to The Council’s findings. The data showed that only 3% of individuals in firms surveyed reported having a disability, with that number shrinking to 1% in executive and senior management roles. The U.S. House report, with similar results, determined that “just 4% of employees at insurance companies identified as having a disability in 2021, compared to almost 25% of adults in the United States who are living with a disability.

One does not need to look far to make the case for diversity, equity and inclusion, and depending on whom you reference, you can find multiple benefits both for your organization and for your clients. To avoid redundancy, we will concentrate on a specific value that DE&I brings to organizations, and that is navigating complexity. It’s no secret that, with demographic changes, globalization and the push for more socially conscious organizations, complexity is something there is little shortage of. And this can be quite intimidating. Nowadays, leaders are tasked with managing a form of complexity they are often ill-equipped to handle. No individual has the capacity to know the cultural and individual needs and goals of every single employee to build a consistently thriving workforce, much less learn all of the cultural nuances required to effectively develop inclusive products that fully cater to client needs.

This complexity requires us to design organizations that allow for the presence of diverse identities and experiences, provide avenues for the freer flow of information (individual and cultural values and needs) upward and across, and value those inputs enough to incorporate those norms and ideas deeply into the culture and design of the organization. It is with this systemic approach to inclusion that we will optimize organizational health and be able to serve our diverse client base. Who better to know the needs and wants of the various communities we serve than folks, or representatives, from those communities within our organizations? All of this speaks to the immeasurable importance of our employees’ feeling valued, both for who they are as well as for their contributions.

We don’t foresee this particular shift to expressing the value of inclusion as being difficult. In fact, according to The Council’s study, the industry overall is enthusiastic about DE&I: 85% of respondents felt that their leaders demonstrated a genuine commitment to it. Impressively, only 9% of surveyed firms reported having received no DE&I training at all. Many firms are actually eager to see what’s next for DE&I, and this means that there exists incredible momentum which should be leveraged. Some of the inclusion practices that were suggested in The Council survey included:

• Increased investment into employee resource group ecosystems
• Better marketing efforts for the diversity of client communities
• Inclusive benefits and workplace incentives for individuals with disabilities, early career employees, and underrepresented religious groups.
• Continued efforts for community engagement and relations, as well as better supplier diversity initiatives.

These practices point to both the necessity of having a psychologically safe working environment where employees are able to represent themselves and their needs and the imperative to have dedicated staff who are able to understand this complexity and work to develop strategies to meet these needs. It’s the type of complexity that only effective DE&I programming can manage.

Written by Farzin Farzad and Ulduz Berenjforoosh Azar