Combatting DE&I fatigue in insurance
Combatting DE&I fatigue in insurance | Insurance Business Canada
Insurance News
Combatting DE&I fatigue in insurance
Embracing diversity can drive innovation and boost bottom lines
Insurance News
By
Nicole Panteloucos
The year 2020 was a watershed moment for Diversity, Equity, and Inclusion (DEI) initiatives. The heightened awareness of social justice issues, sparked by the tragic death of George Floyd, ignited a global movement for racial equality and justice. Organizations across various sectors, including insurance, made impressive commitments to DEI.
Four years later, however, there is evidence that some of this momentum is starting to wane.
“DEI is, unfortunately, an easy target for a decline in investment,” shared Colette Taylor (pictured above), chief operating officer at Sovereign Insurance.
Taylor pointed out that as companies face economic difficulties or budget constraints, DEI programs are often among the first to experience cuts. This trend is worrying, especially considering the significant strides made in recent years.
Are insurers pulling back on DEI?
Amid escalating political tensions, cybercrime, rising costs, and the impact of climate change on certain risk profiles, it’s no secret that the insurance industry is facing greater instability compared to years past—and it’s affecting corporate diversity efforts.
Describing the phrase, Taylor uses the term “DEI fatigue” to indicate that corporate concern for inclusivity initiatives is becoming less proactive.
“Anything done repetitively without regularly reaffirming its importance can become monotonous, causing us to lose sight of its purpose,” said Taylor.
“We need to keep support programs like employee resource groups fresh, vibrant, and dynamic. It’s essential to constantly challenge ourselves with new and innovative approaches to ensure DEI stays at the forefront.”
This hesitation could be attributed to a fear of public scrutiny or of ‘missing the mark,’ as corporate DEI initiatives are sometimes viewed by consumers as disingenuous marketing ploys. Further findings from the Association of Corporate Citizenship Professionals support this, indicating that 33% of respondents have experienced additional scrutiny or legal review of DEI-related initiatives.
To make matters worse, after reaching their peak in early 2023, DEI positions dipped 5% by the end of last year. Additional research from Forrester predicts organizational DEI investments will fall from 33% in 2022 to 20% by the end of 2024.
Competing priorities could be the culprit
As organizations shift away from emphasizing DEI as a primary focus, Taylor highlights a vicious cycle where reduced attention diminishes its perceived importance. She underscores that even when DEI initiatives are included in corporate agendas, without dedicated staff members focused on these efforts, DEI often takes a back seat.
“When professionals with DEI responsibilities also focus on other areas of the business, they can be pulled and strained in various directions, reacting to different priorities,” Taylor confirmed.
The competitive necessity for insurers to invest in technology may also be diverting attention away from DEI initiatives.
According to estimates by McKinsey, AI technologies could inject up to $1.1 trillion in annual value into the global insurance industry. Additionally, findings from Gradient AI show that more than 90% of surveyed insurers plan to increase AI investment, especially to assist in areas such as underwriting and claims management.
Taylor shared: “The need for investment in areas like these represent competing priorities that weigh on businesses. It makes it challenging to try to determine what should get prioritized and how.”
The value of perspective
Despite the necessity to invest in technology to excel in an increasingly digital market and meet the evolving expectations of modern consumers, teams with unique viewpoints foster innovative problem-solving and creative thinking, which can enhance organizational performance and positively impact bottom lines.
Data from McKinsey shows that companies whose boards are in the top quartile of gender diversity are 28% more likely than their peers to outperform financially.
A study from LinkedIn confirms that diverse teams:
earn 2.5x higher cash flow per employee.
are over 35% more productive.
make better decisions 87% of the time.
In globalized industries like insurance, the value of a diverse workforce is particularly crucial. A team that reflects the diversity of its customer base is better positioned to understand and address the unique needs of various demographic groups.
Reflecting on her nearly 30 years in the insurance industry, Taylor added: “I’ve witnessed a significant shift in the opportunities available to women compared to when I started. Attracting diverse talent is crucial, but we also need to invest in their growth and development. It’s essential to prioritize this investment so that they gain the confidence, capabilities, and resources needed to advance to senior leadership positions, ultimately enhancing diversity at the top.”
How to keep the momentum going
Strategies insurers and brokers can use to bolster DEI commitment in their own organizations include:
Leadership commitment: Ensure that top leaders are visibly committed to DEI. This can include setting DEI goals, allocating resources, and holding themselves accountable for progress.
Training and education: Promote regular training and education on DEI topics for all employees. This can include unconscious bias training, cultural competence workshops, and DEI seminars.
Community engagement: Engage with and support diverse communities through outreach, partnerships, and corporate social responsibility initiatives.
Transparent communication: Communicate openly and transparently about DEI goals, initiatives, and progress. Share successes and challenges with the entire organization to foster a culture of accountability and continuous improvement.
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