Over the past couple of years, “business as usual” has been upended. But it’s not just about the shift to remote work and hybrid models. Organizations across sectors have a heightened focus on diversity and inclusion, as they respond to a moral imperative to take action and recognize the advantages of a more diverse workplace.
The insurance sector is among those embracing change. In a 2022 Canadian Underwriter Diversity and Inclusion survey, sponsored by Sovereign Insurance, an overwhelming majority of brokers (91%) agree they must address diversity to be a successful business. And nearly all (98%) agree that a diverse and inclusive workplace brings benefits.
The top advantages cited by brokers include: positive workplace culture (63%); more diverse perspectives (51%); understand clients/those we serve better (41%); and a greater sense of inclusion for employees and clients (37%).
When it comes to bottom-line benefits, numerous studies support the notion that diverse organizations are more effective and perform better financially. For example, a 2021 report from BofA Global Research shows that diversity supports stronger revenue-generating potential, as well as improved customer acquisition and increased capacity for innovation.1 A 2020 report from McKinsey & Company found that the business case for diversity remains robust, but also that the relationship between diversity on executive teams and the likelihood of financial outperformance has strengthened over time.2
What are the downfalls to not supporting a diverse culture? In the Canadian Underwriter/Sovereign Insurance survey, brokers identified the biggest threats if their organizations don’t address diversity. The top threats are: losing good employees (47%); losing access to the best new talent (46%); reputational risk and image management (32%); and the risk of homogeneity or groupthink (30%).
Challenges attracting and retaining employees are particularly problematic for the insurance industry, as the sector is already experiencing talent shortages. In a PwC survey, 86% of the 122 respondents working in the insurance industry said an employer’s policy on diversity, equity and inclusion is a deciding factor in choosing a new job. 3 Globally, these factors are a rising trend for employees across sectors. PwC states that employees want to work for companies that have a clear purpose, encourage diversity and inclusion, and hold themselves accountable for matching words with action.4
Having a diverse workplace also provides the right foundation for building relationships with business partners and clients, which is essential in the insurance sector. Without a diverse workplace, carriers and brokers may be challenged to genuinely understand the experiences and perspectives of different groups when trying to build relationships and conduct business.
Studies also show that diversity is a key driver of innovation. When diverse teams come together—with differences ranging from culture and gender to life experiences and viewpoints—they are more likely to come up with creative, innovative ideas. Diverse teams are also shown to be better at making decisions and bringing ideas to life. 5
In the insurance sector, innovation is now a top priority, as the industry transforms through technology and adapts to new and emerging risks. Carriers and brokers alike can leverage diverse teams to encourage innovation, creativity and problem-solving as the sector undergoes this shift.
While the benefits of having a diverse and inclusive workplace are clear, this is not to say an organization without it will fail. However, those that embrace diversity and inclusion will have a significant edge. The more an organization makes room for everyone at the table, the more successful it will be.
This article is part one in a series on diversity and inclusion. Stay tuned for the next installment and more results from the Canadian Underwriter Diversity and Inclusion Survey, sponsored by Sovereign Insurance.
1 BofA Global Research, “Everybody Counts! Diversity & Inclusion Primer,” March 2021
2 McKinsey & Company, “Diversity wins: How inclusion matters,” May 19, 2020
3 Canadian Underwriter, “Why insurers should be active diversity allies,” Sept. 1, 2021
4 PwC, “Hopes and fears 2021,” 2021
5 Great Place to Work, “Why diverse and inclusive teams are the new engines of innovation,” June 11, 2020