One of the most important trends in the business world in the 21st century has been the concerted effort to bring more women into leadership roles. While progress has been frustratingly slow in some respects, women are getting more opportunities to step into leadership roles than they did in past decades. Given the nature of its diverse customer base and the broad range of its products and services, the insurance industry has much to gain from greater diversity among its senior leadership positions.
Women in the Insurance Industry: By the Numbers
To its credit, the insurance industry has made an effort to improve the gender diversity of its workforce and workplace policies. According to a 2018 McKinsey report, women make up 56 percent of entry-level positions. Traditional service positions, such as claims adjusters and policy clerks, are increasingly being filled by women.
Unfortunately, higher-level leadership positions continue to be male-dominated. The same 2018 report found that women make up only 30 percent of vice president positions and a mere 18 percent of c-level executive positions. Although many companies have made an effort to diversify their board membership, women business leaders still occupy less than 20 percent of insurance industry board seats. Viewed in historical context, however, there have been significant gains on both fronts. Board representation increased by about six percent between 2013 and 2017, and the share of insurance company boards without any women decreased from 28 percent to 15 percent.
Gender Diversity Challenges
The effort to diversify leadership highlights a number of structural difficulties with succession planning that will take significant time and work to overcome. Unconscious bias is a major obstacle that went largely unnoticed for decades. A lack of diversity at the executive level entrenched certain assumptions about what type of person was best suited to fill those roles. While not explicitly biased against women, it was not an accident that the “ideal” leadership qualities also happened to be overwhelmingly associated with male candidates.
Without other voices in the room, male-dominated leadership groups tended to exhibit an unconscious bias for candidates who thought and behaved the same as them. This led to the same sort of people filling these positions, which contributed to another major diversity challenge. With so few women in leadership positions, there were limited networking and mentoring opportunities for young, high-potential female candidates looking to advance their careers. As more women business leaders move into senior-level positions, there will be more support available for aspiring leaders, which will cultivate a larger, more diverse talent pool.
Women as Insurance Consumers
For the insurance industry, there is a significant business case to be made for promoting gender diversity in leadership positions. Women are driving consumer insurance decisions, both in the healthcare and financial services sectors. Not only do women typically utilize more healthcare services than men, but they also make 80 percent of the healthcare decisions for their families. When it comes to financial services, women are more likely to consult with an insurance agent or advisor before making a decision. Life stage is a factor in this trend, as the age groups most likely to seek assistance are Baby Boomers (64 percent) and Millennials (60 percent), while a smaller share of Gen X women (51 percent) do the same.
By placing more women in leadership positions, the insurance industry can do a better job of identifying the wants and needs of its customers. Greater diversity of thought can make the organization as a whole more agile, allowing it to react to changing circumstances and reevaluate the way it approaches the market. As leaders, women can bring a fresh perspective to how insurance companies provide services and design their products, as well as how they can best cultivate lasting relationships with consumers.
More importantly, greater gender diversity at the executive level broadens the talent pool for succession purposes by providing a variety of leadership models for young, high-potential leaders to aspire to and learn from. With women increasingly making up a majority of entry-level positions, companies must put the development programs in place to ensure that talented women don’t leave to seek opportunities elsewhere.
The insurance industry has made significant strides in terms of gender diversity and has significant incentives to keep promoting those efforts. As more women move into leadership positions companies will continue to become more agile in response to new perspectives on the market and consumer needs. Elevating these leaders will also help strengthen succession pipelines, demonstrating to younger, high-potential women that there is a bright future for them in the insurance industry and creating the opportunity for valuable mentoring and coaching relationships.