Insurers implored to 'open the door' to Black founders
In mid-July, InsurTech NY held a unique online discussion, Overcoming Bias in Insurance.
Comprising two panels, the first included Lindsey Greene, Chief Strategy Officer, NYC Economic Development Corp. and My Chi To, Exec. Deputy Superintendent of New York DFS, as well a panel of Black insurtech founders. The other was on the topic of “removing race from underwriting.”
The first panel looked to answer the question of bias in the insurance industry against African-Americans. While 13% of insurance employees are Black -- tracking with the population nationwide -- minorities make up only four percent of executives at the top 10 P&C carriers and a mere two percent in life & annuity. Across both segments of the industry, six percent of underwriters are Black. Insurtech is bleaker: exactly 2% of the executives at the top 10 most funded Insurtechs are Black.
Enough said? Jae McKinney, cofounder of Infiniqo, suggested that for those in the community who aren’t Black, “you can reach out to us. And look at your team and figure out how you can start diversifying it.” Added Demetrius Gray, CEO of WeatherCheck: “Take the call. And don’t just take the call, continue the conversation.” Be aware of your bag and baggage and open the door!
Perhaps the most poignant moment of the Black founders panel was offered by the insurtech founder Anita Gardyne of Oneva: As a Black woman of 58, it has been impossible for her – and for others like her – to separate race, gender, and age issues: “I am stereotyped as an ‘old’ Black female, which makes me part of an ever smaller group.” She says while she doesn’t look like “the template” of Jeff Bezos or Mark Zukerberg, the industry needs to get to the point where “guys who do look like that template” are aware of and willing to deal with her. This is crucially important because, as a Black founder “you have to focus on cash flow and self-sustainability because you don’t have that safety net that many other founders may have,” she adds.
The panel on underwriting cited Circular Letter #1, which was issued by the New York Department of Financial Services and expressly prohibits insurers from using race in life insurance underwriting practices, However, it also noted that other external data, such as neighborhood, were being used, if unintentionally, as a proxy to reach the same outcomes as race-based underwriting. In fact, so-called “color-blind” algorithms are simply additive to underlying systems that reflect decades of discriminatory pricing. The Circular Letter does not specify practical solutions, so there is a huge challenge here for innovators to help better inform consumers about insurance, so that it’s not for them an impenetrable black-box solution.
The upshot of this event: Insurtech founders and insurers have the power to diversify their teams; to embrace innovative underwriting solutions; and open up new underserved markets. To do so, however, you must “Open the door!” If you’re interested in taking that step, perhaps you’d like to catch this event in its entirety at: https://www.youtube.com/watch?v=Bi5n1EFHvlI.