Congresswoman Maxine Waters (D-CA), Chairwoman of the Committee on Financial Services, and Congresswoman Joyce Beatty (D-OH), Chair of the Subcommittee on Diversity and Inclusion, released a Majority staff report entitled, “Diversity and Inclusion: Holding America’s Largest Insurance Companies Accountable.” On Tuesday, September 20, the Subcommittee on Diversity and Inclusion will hold a hearing entitled, “A Review of Diversity and Inclusion at America’s Largest Insurance Companies” to discuss the findings of this report.
While the insurance industry is a unique sector of financial services that has much less federal oversight than the rest of the financial services industry, it plays an extensive role in the everyday lives of consumers, given that it is often a requirement to obtain certain types of insurance. This report, which highlights the lack of diversity in the nation’s largest Property & Casualty (P&C) and life insurance companies, is the third in a series conducted by the Financial Services Committee and led by the Subcommittee on Diversity and Inclusion to hold the financial services industry accountable on its diversity and inclusion efforts.
The data requests were designed to inform Congress of the diversity levels, policies and practices of the country’s largest P&C and life insurance companies.
Highlights from Committee staff findings:
For the full list of findings, please see the report here. Below are some of the highlights of the Committee staff report.
- In 2021, the largest insurance companies had a lower percentage of employees of color (30.5%) compared to the largest banks (42%) and the largest investment firms (40.6%)
Executive Leadership Diversity:
- Among companies surveyed, people of color were underrepresented in 2021 in executive level positions, with an average of 16.2% of executives identifying as people of color.
- Among companies surveyed, women were underrepresented in 2021 in executive-level positions, with an average of 33.5% of executives identifying as women.
- The CEOs at the largest insurance firms were overwhelmingly White men (88.9%) in 2021. Specifically, 25 out of 27 (92.5%) of the largest insurance companies were led by men, and 26 out of 27 (96.2%) of the largest insurance companies were led by people who identify as White. Racial and gender CEO representation has remained unchanged since 2017.
- The Committee found that board diversity at the nation’s largest insurance companies was similar to board diversity at the nation’s largest investment firms and banks surveyed and covered in prior Committee reports: women comprised 28.5% of insurance boards, 28% of investment firm boards, and 30% of bank boards, and people of color comprised 22.3% of insurance boards, 17.5% of investment firm boards, and 20% of bank boards.
The Committee staff report recommended that insurance companies consider taking immediate actions to improve diversity and inclusion. Here are a few:
Workforce Diversity Recommendations:
- Insurance companies should regularly collect disaggregated data on their workforce, executive and board diversity, as well as conduct regular audits on pay and racial equity to better understand their current workforce, and why employees of color and women are not moving up the pipeline. This data should be made publicly available.
- Insurance companies should partner with historically Black colleges and universities (HBCUs), minority serving institutions (MSIs), and community colleges to build talent pipelines into these organizations.
Board and Executive Leadership Diversity Recommendations:
- Insurance companies should consider at least one diverse candidate for all executive positions and board positions when there are openings. Diverse candidates may include individuals with a disability, LGBTQ+ individuals, women, and people of color.
- Insurance companies should consider their board membership criteria and selection committee construction to reduce bias in the interview, selection, and appointment processes.
To view the full report on diversity and inclusion practices in America’s largest insurance companies, click here.