Improving Gender Parity in Insurance Company Leadership Positions
The underrepresentation of women in leadership roles within insurance companies remains a pressing issue, despite the widespread belief that gender parity is not a problem. Surprisingly, even some women hold this viewpoint. According to a 2018 study conducted by McKinsey and LeanIn.Org on Women in the Workplace, almost 50 percent of men and 33 percent of women across various industries believe that having one woman for every ten individuals in a senior leadership team is satisfactory representation.
However, the presence of fewer women in top positions within insurance companies means missing out on valuable sources of talent. Research published in the Harvard Business Review reveals that diverse teams are more proficient at solving complex problems and effectively targeting diverse markets and customer segments. To maintain a competitive edge, insurance companies must strive to cultivate effective and diverse teams at all organizational levels, which necessitates increasing the representation of women, particularly women of color, in leadership positions. Carriers must take bold and sustained actions to support women as they progress through the talent pipeline and assume more senior roles.
Unlocking Opportunities for Women in the C-Suite
Encouragingly, when compared to other sectors, the insurance industry demonstrates a slightly better representation of women in entry-level positions, with women comprising 57 percent of these employees compared to the sector average of 48 percent. However, this percentage drops significantly to 28 percent at the VP level (compared to 29 percent across sectors) and a mere 18 percent at the SVP level (compared to 23 percent).
Consider the fact that white women represent 45 percent of entry-level roles, yet they constitute only 18 percent of the C-suite in insurance. In other words, fewer than one in five direct reports to the CEO are women. The situation is even more dire for women of color, as they hold a meager 12 percent of entry-level positions and a mere 3 percent of direct-reporting roles to the CEO. This means that black, Hispanic, and Asian women combined account for only 3 percent of the insurance C-suite.
To make significant strides in improving gender diversity, insurers should excel in two key areas: setting a clear aspiration driven by the CEO and fostering accountability throughout the organization. Additionally, focusing on one or two specific initiatives and executing them systematically can make the talent pipeline more diverse. Creating a sponsorship program and addressing unconscious bias are two commonly adopted initiatives within the insurance industry.
Creating Sponsorship Programs to Foster Advancement
The gender gap in promotions becomes apparent early in the talent pipeline, specifically during the first promotion to a managerial role. Research indicates that women across various industries are 21 percent less likely to be promoted compared to men, while black women face a staggering 40 percent less likelihood of promotion. Several factors contribute to this disparity, but a significant reason is that assuming a leadership position necessitates having a robust network of formal and informal connections. Many men establish such networks early in their careers, leading to salary increases and promotions. However, women may encounter challenges in building these relationships, especially in organizations with limited female representation at the top.
To facilitate women's advancement, insurance companies should establish formal sponsorship programs that level the playing field by creating a broader network that can identify and promote talent more equitably throughout the organization. Moreover, both male and female leaders should proactively create informal social network groups to support the advancement of women and other diverse leaders. These programs should include structures that enable sponsorship and reinforce the expectation that leaders are responsible for sponsoring talented women within the organization. By perceiving this initiative as a directive from the top, it will be taken seriously and widely embraced.
For instance, one major insurance company's CEO decided to formally sponsor five women in the C-suite, assisting them in building connections and gaining access to
opportunities. These five senior women were then each tasked with sponsoring five women at the next level, creating a cascading effect. The sponsorship network comprised both formal and informal opportunities, fostering organic relationships. This approach allowed these women to establish broader networks, acquire essential skills, and gain exposure to significant development experiences, such as leading strategic projects or chairing key committees.
Addressing Unconscious Bias for Equal Opportunities
Insurance companies that actively tackle unconscious bias do not limit themselves to a few hours of diversity and inclusion training for their leadership. Instead, they adopt a thoughtful approach to identify areas where unconscious bias may manifest throughout the organization. They systematically evaluate potential biases in areas such as hiring, performance evaluations, promotion decisions, and the distribution of projects or opportunities among employees.
For instance, one carrier began leveraging advanced analytics and online tools to create job descriptions that appeal to a wider range of diverse talent. Other carriers employ advanced analytics to analyze feedback patterns in evaluations received by men and women. The data from one carrier's analysis of written feedback forms showed that women were more likely to receive comments on their communication style or appearance, while men were more likely to receive feedback on areas of improvement related to running the business.
While multiple strategies exist to facilitate the advancement of women in insurance, CEOs leading the charge and promoting sponsorship and unconscious bias programs have proven highly effective. According to the 2017 McKinsey and LeanIn.Org Women in the Workplace study, companies that implement a focused strategy to achieve gender equality and diversity achieve improvements across their talent pipeline three to four times faster than their peers. Moving forward, senior leaders must consider how they can actively support gender parity through individual actions and by sponsoring structured initiatives implemented throughout the organization. By doing so, significant progress toward gender parity can be achieved more rapidly.