The insurance industry is expanding rapidly. Accenture research shows that there will be $1.4 trillion in growth over the next five years. To keep up, insurers need to think about building their teams effectively if they want to boost market share and meet the demands of tomorrow’s customers. In light of success we’ve experienced here at Accenture, one of the key opportunities I see for insurance organizations strategizing to grow sustainably is focusing on inclusion and diversity in their workplaces.
Rather than seeing inclusion and diversity as a short-term reaction to current events, treating it as a strategic initiative helps insurance carriers get ahead. Over the past two years, we’ve seen fundamental changes to how we work. Employees and leaders are reassessing what’s meaningful to them. Insurance carriers must emphasize inclusion and diversity as part of their company’s core value system to attract and retain the talent that will push their business forward.
Why a diverse team matters to sustainable growth
Research from Harvard Business Review separates diversity factors into two categories: inherent and acquired diversity. The study refers to companies whose leaders display both inherent and acquired diversity traits as having two-dimensional diversity. They found that companies with 2D diversity are 45% more likely to report market share growth and 70% more likely to report capturing a new market.
Diversity is quickly becoming a key differentiator in the eyes of customers, potential employees, and investors. Here are three areas where diversity initiatives drive results:
Accenture Research has found that about $200 billion in growth in the insurance industry will come from innovation initiatives in the next five years. Diversity drives innovation. With a variety of experiences and perspectives at the table, diverse teams are better able to create unique solutions. They’re also primed to recognize new opportunities with an expanded awareness of different markets. For example, individuals with disabilities often manage their everyday lives through creative problem solving, agility, and persistence—traits that contribute to innovative thinking.
2. Customer experience
Customers want more digital experiences, but they also need personalized, human touchpoints to build trust. Diverse team members in customer-facing roles better understand how to meet the needs of a diverse customer base. When it comes to developing and improving your products, including the voices of a diverse group of decision-makers helps you better address the needs of emerging markets across different demographics.
Additionally, customers are increasingly looking for value alignment with the brands they choose. Eighty-three percent of millennials want the companies they buy from to align with their values. Our research also shows that 74% of millennial and Gen Z consumers want companies to take a stand on issues that matter to them. For example, consumer surveys have revealed that millennials highly value wellness—both physical and mental. This is reflected in the 2021 ranking of top brands for the demographic, which included iFit and Headspace with Peloton in the top spot.
Pew Research Center data reveals that Gen Z is the most ethnically and racially diverse generation with millennials coming in at a close second. Members of these groups are looking to work at organizations that have comprehensive inclusion and diversity programs and cultivate an empowering workplace culture. Additionally, we’ve found that there’s an untapped talent pool of 10.7 million individuals living with disabilities. There’s a significant employment gap between able-bodied individuals and disabled individuals. Staff turnover is 30% lower at companies with great disability community outreach programs.
How insurers can increase and maintain diversity
My colleague Darcy Dague has previously discussed how the insurance industry is struggling to put diversity initiatives into action and reap business benefits.
Diversity is not just about hiring individuals with different backgrounds, abilities and experiences. It requires a commitment to a workplace culture that actively supports individuals’ unique needs. Developing sustainable inclusion and diversity practices across the business is an iterative process. Along the way, it’s important to be willing to make mistakes, stay accountable, and be open to feedback. Maintaining inclusion and diversity initiatives calls for ongoing conversation and a commitment to empathy.
Setting deliberate, actionable goals to increase team members’ well-being through inclusion and diversity initiatives matters more than optics. Companies like State Farm, Zurich and Progressive have published key highlights from their equity, inclusion and diversity (EDI) reports that outline some of the actions they’ve taken to enhance inclusion and diversity. Here are initiatives they’ve employed to boost and cultivate diverse workplaces:
Promoting a culture of openness and emotional safety creates an attractive workplace for those that have faced discrimination and challenges based on their identity.
At State Farm, 24% of executive leaders are minorities and 37% are women. Their initiatives include hiring a Chief Diversity Officer who established a governance council made up of executives from across the company. The company also hosted an event where leaders spoke about racial bias and allyship, which inspired an ongoing talk series dedicated to open conversation about these issues. They’ve also set up Employee Resource Groups to encourage connection and open dialogue.
Support flexible work
Our research found that women stand to benefit significantly from continued remote work. Seventy-five percent of women are the primary caretaker for children or elderly family members. Flexible work schedules and remote working options give women the opportunity to better balance work and life, encouraging them to thrive in their role and to stay at your company.
In 2020, Zurich reported that their board is 54.6% female. They were included on the Forbes 2020 list of America’s Best Employers for Diversity. Pay equality and extended family care policies are key initiatives that support the women who contribute to their company.
Create room for growth
Progressive reported that their new hires in 2020 were 60% female and 46% people of color thanks to a recruitment campaign aimed at diverse individuals. They filled 78% of their above-entry-level positions by promoting from within. Their voluntary turnover rate in 2020 was just 6.9% and the average tenure is nine years. These outcomes are due to a focus on learning and development, providing opportunities to engage in technology and analytics skills training targeted at women and people of color.
Creating opportunities for reskilling and upskilling is another avenue for increasing workforce diversity. In 2016, Accenture created an apprenticeship program that provides professional development opportunities for individuals who may not have a four-year college degree. Through the program, three-quarters of apprentices report that the skills they acquired helped them secure a job. In 2021, we hired 575 individuals into the program—the majority of whom we’ve since hired into full-time roles. Due to the success of the apprenticeship initiative, Accenture is aiming to recruit 20% of our new hires from the program this fiscal year.
80% of the apprentices in our program do not have a four-year degree and 60% of them are ethnically diverse. Companies that screen applicants by degree eliminate 76% of Black adults and 83% of Hispanic adults, significantly reducing the talent pool they have access to. Only 34% of veterans and just 11% of those with disabilities have a bachelor’s degree. Insurers can boost their recruitment strategies and broaden their talent pool by providing similar apprenticeship opportunities and opening doors for individuals with varied educational backgrounds.
Bear in mind that Accenture’s inclusion and diversity programming is constantly undergoing review and improvement as we figure out the most effective, meaningful ways to create systemic change. Many leaders are hesitant to get started on inclusion and diversity initiatives because they don’t want to fail.
Starting out with clearly defined goals and maintaining transparency about your inclusion and diversity initiatives along the way is paramount to their success. Remaining humble and open-minded throughout the process is the best way forward. Being intentional about cultivating an environment where it’s safe to speak out and make mistakes contributes to your overall employee trust and sense of wellbeing at work — and that goes for your executives, too.
You can read more about how Accenture prioritizes inclusion and diversity, and how your organization can make lasting change, here.
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Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.