Insurance industry outlook

The evolving landscape of talent diversity in the insurance industry

Shifting from initiation of DEI efforts to implementation will be pivotal

Mar 14, 2024

Key takeaways

The insurance industry has shown improvement in workforce diversity, but gaps remain.

Unbiased third-party evaluations can deepen the understanding of workforce dynamics.

Companies can leverage diversity as an essential engine for innovation and corporate growth.

Financial services Economics Insurance

In recent years, the insurance industry has shown improvement in workforce diversity, particularly related to gender. The property and casualty sector and the life and health sector experienced notable progress in 2021, with the S&P Global gender diversity scores for both sectors rising to 52 in 2021 from 49 in 2020, demonstrating a growing commitment to gender equity. (The S&P score typically ranges from 0 to 100; the greater the gender diversity of the company, the higher its score.)

Still, a 2023 report from the Insurance Industry Charitable Foundation indicated that women hold only 12% of the industry's C-suite positions. This statistic underscores the gender disparity that persists at higher levels of management and the need for increased efforts to promote gender equity in leadership within the insurance sector.

As efforts continue, it's important to recognize and address fatigue around diversity, equity and inclusion (DEI) efforts. Companies need to be intentional with DEI initiatives so that those efforts remain effective and don't overwhelm employees. Shifting from simply initiation of DEI efforts to robust implementation is pivotal for the industry; it redirects attention from mere planning to tangible actions woven into the fabric of the business.

Embracing implementation is vital because diversity enriches the industry with a multitude of perspectives, ideas, and solutions, enhancing creativity, problem-solving, and decision making. Moreover, it reflects and serves the diverse customer base more effectively, fostering inclusivity and understanding, which are key to long-term success and resilience.

Diversity in the U.S. insurance industry

The picture of diversity in the insurance sector is varied; while women are well represented—making up 50% of insurance sales agents and holding 58.2% of roles like claims adjuster, appraiser, examiner and investigator in 2021, according to U.S. Bureau of Labor Statistics data—minority representation lags. For instance, Black or African American individuals represented only 11.8% of insurance sales agents, with Asian Americans representing 4.1%, and Hispanic or Latino individuals 16.5%. In roles like claims adjuster and policy processing clerk, these figures vary slightly but still reflect underrepresentation of ethnic and racial minority groups. This underscores the need for more inclusive hiring and advancement policies to create a truly diverse workforce.

Future strategies for diversity and inclusion

To build sustainable operations for the future, the insurance industry must integrate strategic workforce planning, continuous learning and technological innovation into its core operations to foster a more inclusive environment.

Strategic workforce planning, with its emphasis on global collaboration and remote work potential, aligns closely with the findings of Modupe Akinola's research at Columbia Business School. Akinola’s research underscores the performance benefits of diverse teams, highlighting the necessity of leadership commitment, strategic diversity integration and bias mitigation. Such an approach is not inherently effective but requires conscious effort.

Incorporating unbiased third-party evaluations can deepen the understanding of workforce composition and dynamics, crucial for developing an inclusive talent strategy. This step, focusing on representation gaps, not only meets inclusivity standards but also enriches the industry's intellectual and creative capacity, making the workforce strategy more comprehensive and effective. This process involves pinpointing and addressing gaps in representation, a step that not only aligns with inclusivity standards but also augments the industry's intellectual and creative wealth.


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Continuous learning initiatives—where organizations enable ongoing education and skill development for employees—are another way to promote a culture of inclusion. According to a recent report by Training magazine, U.S. training expenditures reached $101.6 billion in 2022, with companies providing an average of 62 hours of training per employee. This reflects the significant investment businesses are making in employee development.​ Teams grounded in an inclusive culture are more adept at navigating shifts in market trends and consumer preferences. Embracing this method nurtures inventive thinking and bolsters the company's competitive stance, positioning it as an inclusive, dynamic and forward-thinking leader in the industry.

Teams grounded in an inclusive culture are more adept at navigating shifts in market trends and consumer preferences. Embracing this method nurtures inventive thinking and bolsters the company's competitive stance.
Marlene Dailey, RSM US financial services senior analyst

The role of technological innovation is also pivotal in building a more diverse workplace. Immersive virtual reality training programs, for instance, can help employees understand an array of workplace scenarios, improving cultural competence and empathy in the organization. Artificial intelligence-driven analytics can help detect and rectify biases in recruitment and promotion, facilitating fairer processes.

Digital collaboration tools further complement these efforts by enabling flexible and remote work arrangements, accommodating diverse employee needs. Weaving these components into the core of the organization creates a dynamic, inclusive setting, leveraging diversity as an essential engine for innovation and corporate growth.

TAX TREND: Workforce diversity planning

Insurance companies that understand the tax implications of various recruitment and retention tactics may improve the returns on their investments in employees while moving closer to realizing the benefits of a diverse and inclusive workforce. For example, a company expanding the geographic area in which it recruits employees should understand the state tax implications in order to weigh the full costs and benefits of remote or hybrid work arrangements.

The takeaway

Diversity and inclusion awareness and efforts are becoming more prominent in the insurance industry, but there is still much work to do, especially when it comes to diversity among leadership teams. Strategic workforce planning, continuous learning and advanced technologies can help insurers make their DEI goals a reality. It's also critical to counter DEI fatigue by transitioning from nominal initiatives to meaningful implementation, ensuring sustained progress and impact.

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