Diversity in insurance and beyond with Kweilin Ellingrud - McKinsey

March 8, 2022On average, gender equality is better across the insurance industry than in other fields in North America. Racial diversity, however, is less prevalent in insurance, particularly in positions at the vice president and C-suite level. In fact, only one in 25 direct reports to CEOs in insurance is a woman of color. McKinsey spoke with Kweilin Ellingrud, a senior partner and the leader of McKinsey’s life insurance practice in North America, to learn more about the state of gender equality during the COVID-19 pandemic and to explore areas of hope and concern as we look ahead.

McKinsey: What’s the current state of diversity in insurance?

Kweilin Ellingrud: Insurance—including life, home, and auto insurance—is more gender diverse but less racially diverse than the average industry in North America. There are a lot of strengths to build on, especially across more junior levels of the talent funnel, but we’ve got quite a ways to go to increase diversity across the more senior half of the talent funnel, for women of color in particular.

Across industries in North America, almost half of entry-level workers are women, and just shy of one in four C-suite executives are women. In insurance, two-thirds of the entry level is women, and there are between seven and 14 percentage points more women in manager and senior-manager roles compared with other industries. While the gap narrows at the more senior levels of the talent pipeline, insurance is still three to five percentage points more gender diverse than all industries at the vice president, senior vice president, and C-suite levels. Large and relatively diverse contact centers and large field claims organizations, particularly in auto and home insurance, are helping drive this diversity, especially across the more junior half of the funnel.

Female team leaders are supporting their teams by providing emotional support, checking in on overall well-being, and ensuring manageable workloadsâand theyâre doing so between six and 11 percentage points more than the average male manager.

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In terms of racial diversity in insurance, we have a long way to go at all levels, particularly at the more senior levels. In insurance, the entry level is 19 percent women of color and 8 percent men of color. It then drops all the way to 3 percent women of color in the C-suite, compared with 7 percent men of color, and 2 percent women of color at the board level, compared with 22 percent men of color. In other words, only about one in every 35 people in insurance who report to a CEO is a Black, Latina, or Asian woman. And one in 50 board members is a Black, Latina, or Asian woman. I think we can do better.

McKinsey: Where have we made progress with diversity, and what areas are you still concerned about?

Kweilin Ellingrud: We have made progress in the past five or so years in increasing diversity at the more senior levels. We are seeing more women—primarily White women—at the senior vice president and C-suite levels. Unfortunately, the numbers only move by 1 percent or less each year at the entry, manager, and senior-manager levels, which is where the majority of women and employees are. So most people are not seeing much improvement in diversity at their level.

But we know that female team leaders are supporting their teams by providing emotional support, checking in on overall well-being, and ensuring manageable workloads—and they’re doing so between six and 11 percentage points more than the average male manager, according to our survey of more than 65,000 employees across industries.1

We also know that the average senior-level woman carries a much heavier sponsorship load than the average senior-level man. Compared with senior-level men, the average senior-level woman sponsors 2.3 times as many White women and 2.5 times as many women of color, as well as more White men and men of color. This takes time and energy. We also know that women in general are much more likely than men to spend significant time on diversity, equity, and inclusion (DEI) efforts, even when those duties are not part of their primary role.

So, we have made some progress, and it is encouraging that female managers are doing more to support their teams. But I’m concerned that we are leaving the responsibility of making progress on DEI to the few diverse leaders we have in insurance instead of having allies drive that effort more actively.

McKinsey: Diversity and inclusion is a long journey. In the past two years, how has COVID-19 changed this landscape, and what should we watch out for in the future?

The talent marketâespecially for hard-to-find talent and more senior talentânow has fewer geographic constraints. That could be good for diverse leaders and industries looking to hire them.

Kweilin Ellingrud: COVID certainly changed things in many ways. Many dual-career couples became single-career couples as families adjusted to remote schooling overnight. In fact, while we now have more men in the US workforce than we did pre-COVID (100,000 more men), we have one million fewer women in the workforce. Black workers and Hispanic workers were also more likely to exit the workforce during COVID. Unfortunately, in the first year of COVID, Black women in the United States were nearly three times more likely to experience the death of a loved one, making it a particularly challenging time. Women with children, senior-level women, and Black women were all more likely to consider downshifting in their careers—either moving to a less intense role or giving up work altogether.

Now that many companies are embracing a hybrid work environment, we are seeing that all groups of employees, on average, prefer some form of hybrid arrangement. However, preferences differ by gender, seniority, and whether someone has kids or is a caretaker. Women prefer to spend more days working from home than men do, as do employees with children and more junior employees. The challenge is that if some workplaces make the return to work more flexible, those with childcare and elderly care responsibilities will likely come into the office less. And that may result in those individuals being less visible and less top of mind for step-up opportunities and promotions, putting them on a slower career trajectory.