AIG, Markel, AXIS Execs and Others Weigh In on the Importance of Diversity in WSIA Panel

The need for a more diverse and inclusive workforce has been thrust to the fore as Americans urge for equality and social justice.

By: Autumn Demberger | September 21, 2020

The concept of diversity and inclusion (D&I) has been permeating not just the insurance industry but also almost every industry for quite some time.

For at least the last two decades, there has been a significant push toward diversifying the workforce in order to bring in unique talent from all different backgrounds. The goal is to utilize this diverse talent to approach challenges and form solutions from different points of view. Many hold D&I initiatives in high regard, especially as studies show the effectiveness of having such a workforce.

One McKinsey report found that companies with gender, ethnic and racial diversity are at least 15% more likely to experience above-average financial returns. A survey from The Economist found 71% of respondents believe diversity and inclusion promote better talent management, employee satisfaction (64%), collaboration (57%) and corporate reputation (57%).

While the push is not new, awareness toward a more diverse and inclusive workforce has been thrust into the fore in recent weeks.

As Janet Jordan-Foster, EVP at AXIS Insurance, said, “The last four months have laid bare the systemic inequalities that permeate the lives and livelihoods of African Americans each and every day in this country.”

Devastating events — including the death of George Floyd, the killing of Breonna Taylor, the shooting of Jacob Blake and more — have led to a renewed desire for social justice across the country. Industry leaders are taking note. They see that this cry for equality extends beyond acknowledgement.

It must take root in action.

“Our country, our world and our industry are at an inflection point,” Jordan-Foster continued. “People finally acknowledge that the status quo is unacceptable.”

Using this as a backdrop, Foster led a panel of industry change-leaders at the 2020 WSIA Annual Marketplace virtual event held Sept. 13 through Sept. 16.

The panelists reviewed several important D&I trends, insights and more during the WSIA U40-hosted discussion.

Then and Now

The all-Black panel during the WSIA Diversity & Inclusion Panel Session began their discussions around D&I by reflecting on the resources and opportunities made available to people of color within the insurance industry.

Janet Jordan-Foster, EVP, AXIS Insurance

Some on the panel have been in insurance or related fields for over 30 years, while others are relatively new to the space. Yet everyone agreed that the last few years, particularly the last decade, have seen the most growth in D&I initiatives.

Kevin Husbands, territory distribution leader at AIG, said that there were little to no D&I structures or resources available when he entered the business.

“There seemed to be an apathy toward those initiatives with varying levels of importance by senior leadership at the time,” he said.

But that’s now changing.

For example, during his tenure with AIG, Husbands has seen the creation of a diversity and inclusion council within the last eight years. There are specific roles that have been created, he explained, focused solely on D&I strategy and initiative.

AIG is not alone in its creation of a diversity department/group, either. Several other panelists described the creation of D&I roles within their companies as well.

Terrance Meade, a specialty property broker at AmWINS, detailed a D&I council with different backgrounds and cultures that was built primarily on three pillars at his brokerage: (1) career and skill development for the advancement of women and minorities in leadership; (2) a focus on partnering with associations supporting diversity; and (3) ensuring diversity through recruitment, both internally and externally.

Richie Henry, chief information officer, Markel Specialty, at Markel, described several employee groups created within the last 24 to 36 months at his organization — one devoted to Black employees, another to Asian employees, and a third to employees in the LGBTQ+ community.

“It makes a safe environment for employees to share ideas and thoughts and have a dialogue,” he said.

These types of inclusive groups within a company also open the door to so much more opportunity to succeed in D&I. The fear of speaking out is fleeting as minority groups and women find their voice. What makes today’s current D&I strategies so important, Henry added, is that “we’re not just having the discussion, but we’re having the discussion on topics one would have never thought about bringing up in corporate America.”

So, What Qualities Do Leaders Need Today to Bring About D&I Change?

First and foremost, leaders have to be on board with D&I. That is the only way change can stick.

In order to do this, Meade said it helps to think about D&I as less of a “current trend” and more so a shift in how the industry should operate.

“I think of it in simple terms,” he said, using the example of a bus moving along the road from point A to point B. “D&I is not about changing the destination of the bus. D&I is about opening the door to let more diverse people onto the bus to help navigate,” Meade said.

Leaders must be willing to open the bus door and then listen to what their passengers have to say.

“A leader has to have a sense of awareness; empathy; the ability and willingness to listen; along with sensitivity,” said Oveta Mitchell, vice president, AXIS Insurance. “There should be training. Not one-day training but ongoing training on understanding the underlying causes of systemic racism and the effects it has on people of color.”

That training should not only produce effective leadership but also increase leaderships’ role and understanding of diversity and inclusion within their organization.

“Whether you’re leading a team in an office or an organization, your team has to know you have their best interest in mind when making decisions,” Meade said. Getting a full picture of what D&I means for the organization is just the start.

Bringing on Chief Diversity Officers

Once leadership is dedicated to advancing D&I efforts, the panelists agreed that having specific organizational roles dedicated to implementing D&I initiatives is key.

For some, that can come in the form of partnership with outside organizations like the National African American Insurance Association. For others, that means participating in group discussions surrounding their company’s efforts so far.

Many are implementing the role of chief diversity officer.

A chief diversity officer (CDO) acts as an organization’s executive level diversity and inclusion strategist. Their role is designed to help set up D&I programs and carry through on initiatives.

“Diversity and inclusion becomes the [CDO’s] focus. Councils and committees are a great place to start,” Henry said, but employees in those additional roles have their full-time job responsibilities to return to. “Whereas, this role has one focus.”

But, added Mitchell, the role is only as important as the company makes it. If leadership buy-in is missing or if leadership truly isn’t behind diversity efforts, the CDO may not be able to make a difference.

As panelist Kevin Davis, senior executive VP at Worldwide Facilities, LLC said, the CDO role is “not just a checked box” on the D&I journey; it’s a crucial element to implementing change.

The Benefits Reap Rewards

One final piece of the puzzle lies in showing why D&I efforts are not just the right thing to do, but also beneficial to the organization and its shareholders.

“I believe that this has to be a top down, bottom up, inside out approach,” Henry said.

Terrance Meade, specialty property broker, AmWINS

Top down stems from the executive suite, he explained. Bottom up comes from a grassroots standpoint — “The associates need to demand to know the numbers. The associates need to demand what they can do to make things different. The associates need to demand that their managers get involved,” Henry said.

From the middle out, he said a steering committee is a key place to put policies and strategies in place that will effect change within the entire organization.

All this has to be centered around the organization’s goals. This is how a company will meaure the rewards behind their D&I efforts. The goals can be a number of different things, including how D&I will increase profit, increase market share, attract diverse group of customers, so long as these goals are measurable.

In the end, the goals must “show that [D&I] is important to us, that we’re serious about this, that this is how we’re going to get our company to grow and [show] how everyone is going to benefit from it,” Henry said.

The Value in Working in Collaboration with Others

The biggest takeaway from the WSIA panelists’ discussion was that D&I does not start and end within one organization alone; effective action occurs when companies collaborate on what’s working.

Meade said, “Collaboration is important, because it gives organizations opportunity to learn what they’ve done correctly and what they haven’t done correctly.”

“Collaborating with different individuals is going to make decision making that much more easier and effective,” Davis added.

“Collaborating with others on diversity and inclusion is very important, because effective collaboration involves diversity of thought, diversity of views, and diversity of ideas, and in our industry we must learn from companies that are already engaged in D&I activities and build upon their best practices,” added Carlton Maner, CEO, U.S. division, AXIS Capital, in the virtual event’s introduction. &

Autumn Demberger is a freelance writer and can be reached at [email protected].

Partnering with the Distribution Channel

Jon Monks, Executive Vice President and Head of Distribution for North America at Sompo

Monks and his colleagues at Sompo believe that by being very deliberate about their product portfolio and being cognizant in avoiding overlap between distribution channels is one of the best ways they can be good partners to their brokers.

As a specialty insurer, Sompo places a great emphasis on its relationships with wholesale brokers. Ideally, wholesale brokers are in turn specialists who are adept at interfacing with the retail broker community to bring books of attractive business to specialty carriers.

Since they operate at scale, wholesale brokers can engage in relationships with specialty carriers that might balk at trading with retail brokers that lack the necessary scale or expertise in a specific product or industry niche.

The good news for brokers, carriers, and their clients in one major respect is that certain segments of the property market have shown signs of rate deceleration in response to a relatively benign CAT loss experience in 2023.

In financial lines, Monks points out that there is a lot of new capacity that has entered the market. But buyer beware, unlike Sompo, these entrants might not have the claims experience to price the risk adequately, and they may be sailing into the teeth of headwinds that might shred their risk transfer capital.

According to Monks, “Last year, security class actions rose almost 20%. From 2022 to 2023, we saw an increase in average settlements, and some of these new entrants have yet to be tested in a claim scenario,” hinting at the possibility of challenges insureds and brokers might face in partnering with carriers who have yet to prove themselves in working through complex claims.

This is yet another example where stability and transparency matter in a carrier’s relationships with buyers and brokers.

“When making major changes to the terms offered on a renewal, we need to be up front about those changes and let our distribution partners prepare their clients for potential impacts,” he said.

“Minimizing surprises is critical to effective client management, and we have a role to play in that equation for our brokers.”

Competency, Diversity and Growth

Optimism at Sompo that it can be a trusted risk transfer partner in any part of a given line’s market cycle stem from three important factors. They are:

A strong, diverse portfolio managed by expert underwriters.
A resilient balance sheet and global capabilities
And risk control and claim services that provide that vital support to an important piece, or what should be an important piece of an insured’s risk management program; that being avoiding losses in the first place and/or efficiently managing an insured through the claim process.

First, to the portfolio and its underwriters.

Monks and his colleagues point out that Sompo is increasingly satisfied with the performance of its casualty and specialty portfolios in admitted and E&S offerings.

Going forward, that confidence in its product portfolio will be bolstered by the specialty expertise of the company’s underwriters.

“The underwriter has a lot of power in our organization,” Monks added. “We believe that empowering the underwriter can provide a differentiated experience in the transaction for our brokers and clients, as well as a better financial result for us as a firm.”

“There’s value in being really strong in our specialty disciplines,” Monks said, “whether that falls across product or industry lines.”

Geographically, Sompo opened offices in Toronto, Houston and Denver in the past 12 months and is gearing up to open a Miami office. Existing footprints in Boston, Dallas, Los Angeles, and Chicago have also been expanded.

Being in the right locations matters, because it gives Sompo’s underwriters better access to the brokers with which it conducts business. The more frequently they can engage in face-to-face communication, the better for all concerned.

It’s one thing to hop on a plane to conduct business. It’s quite another to have a favorite lunch spot where you can meet an important distribution partner weekly or monthly.

“We’re focused on attracting talent and putting it in places where we haven’t been as local as we need to be to harvest the portfolio that we want,” Monks said.

“We are trying to get closer to our brokers because we know that the closer we are and the more we’re in front of them, waving that specialty banner and highlighting our underwriting talent and expertise, the more we’re going to get differentiated results.”

Speaking of geography, that despite its ongoing North American expansion, Sompo is a global organization that continues to experience growth across key markets worldwide. That perspective and experience just adds to the sophistication of its leaders and practitioners.

Sompo banks on underwriting, as any competitive specialty underwriter would. But its distinctiveness in risk control may set it apart even more starkly. The company continues to invest in a deeply specialized risk control team that assists its underwriters in assessing and mitigating risks across a variety of products.

Those include property, casualty, builder’s risk, excess casualty, ocean marine and cyber. Ongoing and consistent communication with risk control and claims helps underwriters envision programs that can cut down on the risk of injury and other losses on job sites or on properties owned by the insured.

“Loss avoidance, via risk selection and/or risk improvement is a critical competitive advantage,” Monks said. “We have a team of dedicated risk control specialists and engineers with deep industry and technical expertise whose role in the firm is integral to our underwriters and our clients as we work together to reduce their risk profiles.”

“If you talk to product leadership, the first thing they tell you is that risk control support is vital to the health of our business,” Monks said.

Here and Staying Here

As we’ve said throughout, being a reliable risk transfer partner in any market cycle means having the expertise and the acumen to offer sustainable capacity for our clients and most importantly, deliver on our promise in a claim scenario.

“We all feel a responsibility to our insureds and our brokers to deliver stability and market insight,” Monks said. “That’s ultimately how you build long-term partnerships. You make every effort to avoid surprising your partners and you provide optionality, where possible, when situations become challenging.”

To learn more, visit: sompo-intl.com.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Sompo. The editorial staff of Risk & Insurance had no role in its preparation.

We are Sompo, a global provider of commercial and consumer property, casualty, and specialty (re)insurance. Sompo employs approximately 9,000 people around the world who use their in-depth knowledge and expertise to help simplify and resolve your complex challenges. Because when you choose Sompo, you choose The Ease of Expertise.