Addressing diversity disparities in insurance with Gen Z

Research conducted by McKinsey sheds light on the underrepresentation of people of color within the insurance industry. The study reveals that men of color occupy only 8 to 14% of positions across all levels within insurance companies. The representation of women of color is even lower, according to McKinsey findings. Women of color currently hold a mere 2% of board seats in insurance, in contrast to men of color who occupy 14% of such positions. Additionally, women of color occupy only 3% of C-suite roles, whereas men of color account for 12% in the same category.

To address this disparity and foster a more diverse and inclusive workforce, carriers are actively exploring avenues to tap into fresh talent. One approach involves forging partnerships and establishing collaborative ventures with colleges, universities and educational programs, to cultivate a more inclusive talent pipeline.

"The insurance industry in the U.S. was founded over 200 years ago and predominantly led by white males. Today, that is still the case with a lot of organizations, but there also has been a strong evolution. The insurance industry is due for a change in that image," said Carla Lynch, talent acquisition manager at Arbella Insurance. "The insurance industry is not always the first industry that a young professional or student might think about. Internships are a great way to really introduce them to insurance and really show all the great opportunities and stability of the industry."

Arbella offers a variety of internship programs in partnership with Benjamin Franklin Institute of Technology (BFIT), as part of the carrier's commitment to hiring an inclusive workforce. BFIT's population includes students who are 30% Black or African American and 20% Hispanic or Latino.

Arbella's internship program focuses on teaching students both technical and soft skills, with classroom training, on-the-job project experience, a mentorship program and networking opportunities.

"Diversity and inclusion is one of our top values as an organization. We had to relook at our recruiting strategy and where we were looking for talent, and so we have changed that over the last few years. With our college partnerships, we're now casting a wider net and including more diverse schools and partnerships. That's been a significant assistance to us in finding and hiring great students who then move into employees," said Lynch.

"I graduated last year with a computer tech degree. I've always been into computers, and I felt like that was just the natural path for me growing up, just to be in a career where it's tech-focused," said Teo Phan Tran, service desk analyst at Arbella Insurance, who was once an intern with Arbella and is now a full-time employee and a mentor.

Northwestern Mutual is also showing efforts to recruit diversely through educational opportunities. The insurer recently announced that it will be donating $2.5 million in grants and scholarships to 136 diverse students from local pipeline schools over the next five years. Northwestern Mutual has also previously donated a financial gift of $50,000 to Coppin State University, which is a historically Black college in Baltimore, MD, to help fund its insurance learning lab.

"As you know, African Americans and other minorities are highly underrepresented in the financial services sector. There are so many career opportunities. We are not able to help our students qualify for those opportunities if we don't have the program within our college,"  said Sadie Gregory, dean of Coppin State University. "What's big for us right now is building these partnerships with financial entities…like Northwestern Mutual, because it's not only the funding, but also having employees from these organizations come in and talk to our students, to visit the classes, to come to the lab and to have our students go into their businesses to build a mutually beneficial relationship with the business community."

Berkshire Hathaway Specialty Insurance (BHSI) is another carrier partnering with educators and nonprofit groups.

Starting in March 2022, BHSI partnered with Braven, an educational program that empowers underrepresented groups like first-generation college students, students from low-income backgrounds and students of color. Of the Braven graduates from Rutgers University in Newark in 2021, 92% of graduates identified as people of color.

The partnership with Braven aims to equip students with industry knowledge, offer internship opportunities and facilitate pathways to full-time employment. Additionally, BHSI volunteers take on responsibilities as leadership coaches and professional mentors, and even help with mock interviews.

BHSI also works closely with the National African American Insurance Association (NAAIA), which enables people of color to establish a professional network in the insurance industry.

"We're a national sponsor for NAAIA, and we're working with several of the local chapters of NAAIA in New York, Chicago and San Francisco. We attend conferences and provide speakers on panels, and participate in career fairs as well. I think having our presence of BHSI leaders at the events, and of course in generating specific referrals, is also encouraging young people to become members of the organization to be welcomed into the profession," said David Lee, BHSI's talent acquisition leader.

With the recent affirmative action ruling, which declared that race cannot be used as a factor in college admissions, many colleges and universities must reassess their admissions processes, though some have reiterated their ongoing commitment to diverse admissions. With this in mind, carriers may need to also reshape the way in which they engage with developing a diverse talent pipeline. 

"[The affirmative action ruling] highlights the importance of the work with organizations like Braven, or awareness and preparation for those that may not otherwise have been exposed to careers, industries or professions," said Lee. "It doesn't change a lot of our approach or the relationships that we have, and for me, highlights the continued importance of the work. I know some of the organizations like, Braven and Posse, put out statements in the last couple of weeks just saying that it further strengthens the purpose behind their organization's career preparation and creating those connections."

Lynch said, "Our approach has always been to hire the best, most qualified candidate for the position. But we really want to hire people whose demographics really mirror the states in which we conduct business. We're working to be more diverse, and it shows, and we're making good progress."