Women are still underrepresented in insurance company leadership positions. Yet most men, and a surprising number of women, don’t believe gender parity in leadership is an issue. According to the 2018 McKinsey and LeanIn.Org study on Women in the Workplace, 33 percent of women and nearly 50 percent of men across industries believe that 1 in 10 women in a senior leadership team is pretty good representation1
But having fewer women in top positions means insurers are missing out on critical sources of talent. Harvard Business Review research shows us that diverse teams are more effective at solving difficult problems and reaching diverse markets and customer segments. To grow and keep their competitive edge, insurance companies want to have effective and diverse teams at all levels—meaning more women and women of color. Carriers must take bold and sustained actions to support women as they move through the talent pipeline and into more senior leadership roles.
How to get more women into the C-suite
The good news is that the insurance industry, when compared with other sectors, fares a bit better in terms of female representation in entry-level positions; 57 percent of these employees are women, compared with 48 percent across sectors. However, this number decreases to 28 percent at the VP level (compared with 29 percent across all sectors) and 18 percent at the SVP level (compared with 23 percent).
Consider that white women make up 45 percent of entry-level roles yet only 18 percent of the C-suite in insurance. In other words, fewer than one in five direct reports to the CEO are women. And the situation is much more dire for women of color in insurance—they hold only 12 percent of entry-level roles and a mere 3 percent of direct-reporting roles to the CEO. That means that black, Hispanic, and Asian women altogether make up only 3 percent of the insurance C-suite.
Insurers that make significant strides to improve gender diversity do two things better than others—they set a clear, CEO-driven aspiration, cascading accountability across the organization, and they identify just one or two initiatives and execute them systematically to make the talent pipeline more diverse. Two of the most common initiatives for insurers are creating a sponsorship program and addressing unconscious bias.
Create formal and informal sponsorship opportunities
The gender gap appears early in the talent pipeline, upon the first promotion to manager. Our research finds that women across industries are 21 percent less likely to be promoted than men, and black women are 40 percent less likely than men to be promoted. Why such a big gap? There are several reasons, but perhaps the most significant is that moving into a leadership role requires solid informal and formal social networks. Many men establish such informal social networks early in their career, resulting in salary increases and promotions. Women, however, may find it hard to establish these relationships, especially in organizations where there are fewer women at the top to look up to.
To help women advance, therefore, insurance companies should establish formal sponsorship programs that level the playing field by creating a broader set of networks that can help identify and promote talent more equally across the organization. And women and men in leadership roles can take the initiative to create more informal social network groups to help women and other diverse leaders advance. These programs should include the structures to enable sponsorship but also reinforce the expectation that leaders are accountable for ensuring talented women in the organization are sponsored. Seeing this initiative as a directive from the top will also help make sure it’s taken seriously and adopted.
For example, one large insurance company’s CEO decided to formally sponsor five women in the C-suite, helping them make connections and gain access to opportunities. Those five senior women were asked to each sponsor five women at the next level, and those twenty-five women to sponsor five women at the next level. They offered a mix of both formal and informal sponsorship opportunities to make room for more organic relationships to start as well. This sponsorship network created opportunities for these women to build broader networks and to learn important skills and gave them exposure to key development experiences—for example, leading an important strategic project or chairing a key committee.
Address unconscious bias at a deeper level
Insurers that make strides in addressing unconscious bias don’t just make leadership sit through a few hours of diversity and inclusion training. Instead, these carriers are thoughtful about where unconscious bias exists across all areas of an organization. They systematically evaluate the places where bias might be in play and work to proactively address it in hiring, in performance evaluation and promotion decisions, and in the ways that projects or opportunities are given to employees.
For instance, one carrier began using advanced analytics and online tools to help write job descriptions that appeal to more diverse talent. Other carriers are using advanced analytics to see the patterns in the feedback that men and women receive in evaluations. For instance, one carrier used advanced analytics to analyze its written feedback forms and found that women were much more likely to receive comments on their communication style or even how they dressed in written evaluations. In comparison, men were much more likely to receive feedback on the things that they needed to learn to run the business.
While there are many ways to help women in insurance move into top positions, having a CEO develop and promote sponsorship and unconscious bias programs are two of the most effective. According to the 2017 McKinsey and LeanIn.Org Women in the Workplace study, companies that have implemented a focused gender equality and diversity strategy have made improvements across their talent pipeline three to four times faster than peers. Looking ahead, senior leaders should consider how they can specifically support gender parity, both through their individual actions and as a sponsor of more structured, organization-wide initiatives. Doing so can significantly help accelerate progress toward gender parity.
1 Unless otherwise noted, all data throughout comes from this study.