How the Black Insurance Industry Collective Aims to Open More Doors to Executive Suites

As an affiliate of The Institutes, the Black Insurance Industry Collective is poised to provide the support for more Black insurance professionals to advance beyond mid-level positions.

By: Raquel Moreno | July 20, 2022

By now, the insurance industry understands that its future and longevity depend upon a steady flow of new talent. And not just at the entry level. In the U.S.; greater attention is being placed on who makes up the executive ranks among insurers.

“If you just use strictly the U.S. population, and how people of color are represented in our industry, [they are] underrepresented in almost every category. And that’s not good for several reasons,” said Peter Miller, CPCU, president and CEO of The Institutes.

“I mean, it’s just not right … but also the industry doesn’t represent the people that [it] serves,” he said. “And I don’t think you get a diversity of opinion if you don’t have a diversity of backgrounds.”

Through its new affiliation with The Institutes, the Black Insurance Industry Collective (BIIC) is aiming to open pathways for more tenured Black insurance professionals to secure senior leadership opportunities.

Considering Miller’s point around the composition of the U.S. population, an analysis by the Pew Research Center showed that the Black population in the U.S. is growing — having increased by 29% over the past 20 years.

A venture many years in the making, BIIC has been designed with three main areas of focus to impact the growth and advancement of Black talent within the insurance industry. Tony Steadman a managing director in Accenture’s Insurance Industry group and member of BIIC’s leadership council shared the main focus points:

Provide a tailored leadership program for rising leaders.
Sponsorship and mentoring programs.
A host of educational webinars to build broad awareness and understanding.

Miller also acknowledged that getting more Black insurance professionals into senior leadership will come down to awareness and opportunity.

“And then people’s natural ability will shine,” he said.

How Is BIIC Different from NAAIA?

BIIC is not the only insurance industry organization on a mission to support Black insurance professionals.

Founded in 1997, the National African-American Insurance Association (NAAIA) also aims to empower Black professionals working in insurance and attract new talent to the industry.

At face value, BIIC and NAAIA may appear to be similar organizations, leaving some to wonder why the collective was launched. The key distinction, Steadman shared, is that NAAIA is an individual membership organization that also includes chapters across the U.S.

The New York chapter of 2021 At Large Power Broker Lael Chappell is one such example.

Tony Steadman, managing director, insurance industry group, Accenture

“BIIC is a trade association supported by funding organizations and does not offer individual memberships or chapters,” Steadman said. The Institutes being among the entities financially vested in BIIC’s programming.

“NAAIA supports the development and attraction of black talent in the industry and also focuses on the broader insurance industry including the concerns of insurance carriers, agencies, and issues affecting the industry,” he continued.

“BIIC is singularly focused on the development and retention of Black professionals in the insurance industry.”

Although workplace research on race shows people of color lagging their peers regardless of role and job level, “these adverse trends are even more pronounced for Black insurance professionals,” Steadman shared, citing a 2018 study conducted by Marsh with the participation of NAAIA.

“While starting with Black talent, the maturation of this work will include all people of color,” Steadman said.

Advancing Beyond the Mid-Point

A lack of corporate commitment and investment in professional development opportunities, is one of the factors that prompt many Black professionals to leave the insurance industry all together and seek alternative career opportunities after they plateau in mid-level positions.

Through its relationship with The Institutes, BIIC could play a pivotal role in shifting that paradigm.

“An affiliation allows us to more quickly devote resources and time, and it also represents an ongoing commitment,” Miller said.

“In this structure, we can be sure that we focus on it, that it gets into our work plans, and that we can put the resources on it for the long term, which I think will make it more successful.”

Risk & Insurance® is also an affiliate of The Institutes.

Among its inaugural endeavors, BIIC will host an executive education program for Black professionals in collaboration with Darden Executive Education & Lifelong Learning provided by the Darden School Foundation.

“We chose to partner with Darden Executive Education & Lifelong Learning based on its strong reputation, its commitment to diversity, equity and inclusion, as well as its extensive research and faculty experts focused on topics aligned with BIIC’s mission,” Steadman said. “They also have a track record of success with executive development programs and a long-standing relationship with The Institutes.”

Looking toward future programs, Steadman said BIIC is committed to establishing and building a range of partnerships to foster a spirit of collaboration and to gain synergies with other existing efforts.

BIIC will also seek to “learn from other industries to ensure effective best practices within our programs,” Steadman added.

Indicators of Success

Tangibly improving the representation of Black insurance industry talent at senior and executive levels is a core element of BIIC’s mission.

When asked about how the collective will measure its success, Steadman shared that programmatic measures will be tracked both quantitatively and qualitatively from Black talent participating from sponsoring companies and other organizations.

“Our initial focus was to launch an insurance industry leadership development program to cultivate the skills and capabilities to advance Black leaders into senior leadership roles. Our milestones and initial success criteria were geared towards that successful launch, and we’re now working to define the specific indicators of success,” Steadman shared.

For Miller, increasing the number of African Americans present, available, visible and in senior leadership positions, is the most meaningful metric.

“I think the industry does awesome things. And what’s really encouraging to me is that people see that and are taking steps to try to make it fair and more just. And I think that’s a great thing.” &

Raquel Moreno is a staff writer with Risk & Insurance. She can be reached at [email protected].

How a Carrier Partner Can Help Navigate a Challenging Management and Professional Liability Market

A combination of a choppy economy with increased claims frequency and severity could lead to rate increases in the Management & Professional Liability market.

By: Risk & Insurance | April 3, 2024

Rates in the management & professional liability (M&PL) markets were on the rise from 2020 to early 2023 and are now falling rapidly.

M&PL divisions manage a number of different insurance products including management liability (D&O), professional liability (E&O), employment practices liability (EPL), fiduciary liability policies, cyber, etc. In 2023 and into 2024, a big influence on the marketplace has been the extremely aggressive and softening public company D&O market.

Though these rates have been softening for management liability, that may change over the next few years as companies continue to adjust their business models motivated by economic uncertainty. Layoffs were up nearly 200% last year, Forbes reported, even as other recession indicators, like the inflation rate, improved. A recession could lead to an increased claim activity and force carriers to raise rates.

“Whenever there is a meaningful downturn in the economy, we tend to see claim frequency pop up,” said George Schalick, Jr., senior vice president of the Management and Professional Liability Division at Philadelphia Insurance Companies (PHLY).

With continued fiscal uncertainty, businesses potentially already burdened with pandemic-related claims should seek a carrier with a long history in M&PL products. They will provide much-needed risk management guidance and be better positioned to support their insureds during market fluctuations.

Why Insureds Might See an Uptick in M&PL Claims

George Schalick, Jr., Senior Vice President of the Management and Professional Liability Division, Philadelphia Insurance Companies

The current soft market might come as a bit of a surprise as it does not track with previous underwriting cycles and economic conditions. Afterall, many privately held and non-profit organizations struggled during the early days of the pandemic with shutdowns and rapidly declining revenues. But the Government assistance programs, like the Paycheck Protection Program loans, helped keep many afloat during the tough times.

“During COVID many organizations stopped doing business until they were able to sort out all of the health and safety challenges,” Schalick said. “They were forced to lock down, but then all the government assistance programs allowed them to keep people employed. The increased volume of claims we anticipated we would see coming from the lockdowns and restrictions that were imposed upon businesses in the U.S. didn’t manifest at first.”

“Just because there wasn’t an onslaught of reported claims at the beginning of the pandemic, doesn’t mean the circumstances that would give rise to a claim being reported didn’t occur. Courts and the judicial system were closed or slowed and now that they are back open, we’re starting to see the circumstances that occurred during the COVID lockdowns becoming claims today,” Schalick said. “Litigation is progressing.”

Added to the delayed pandemic litigation is a concern over newer claims that might be filed as the country inches toward an economic downturn. Though a recession was avoided in 2023, experts think a soft dip could occur in 2024, with 76% of economists saying there’s a 50% or less chance of an economic downturn this year — that almost always results in more management liability claims.

“During the Great Recession in 2008, we saw an almost immediate spike in claims because of the economic conditions and the pressure it placed on organizations. They were making personnel changes with significant belt tightening almost immediately.” Schalick said.

What’s in Store for M&PL Policy Rates in 2024?

Despite an uptick in claims and increased economic uncertainty, management liability rates haven’t increased, resulting in market-wide pricing levels that may not meet the increased pressure of rising settlements and jury verdicts.

“Rates are going the other direction and settlement values are not falling,” Schalick said.

The mismatch between rates, claim frequency and severity is, in part, because carriers experiencing the dramatic soft market in the public D&O market are seeking premium gain in the private and non-profit market.

“In the public company market, the rates have been decreasing significantly. The rates were increasing in the private, not-for-profit market, and rightfully so, but there’s a desire to supplement overall mid-size D&O for carriers who also write private not-for-profit, and they see that as an opportunity to aggregate premium,” Schalick said. “So the always competitive landscape in the private, not-for-profit market has dramatically increased in the last 18 to 24 months.”

Still, companies of all sizes and types should be concerned about management liability rates in the future. Legal system abuse is resulting in increases in both the amount of litigation and the size of verdicts plaintiffs are receiving.

Certain areas of the country are particularly vulnerable to this type of legal system abuse. As a result, insureds in these localities are likely to be vulnerable to rate increases.

“The environment is so positive for the plaintiff that forces premium increases so carriers are able to stay in that market long term,” Schalick said.

Why a Tenured Carrier Partner Can Help Insureds Navigate An Uncertain Market

It’s clear that insureds are facing an uncertain M&PL market over the next few years. Fortunately, carriers with a long history in the M&PL space will be there to offer stability.

Philadelphia Insurance Companies has been supporting this market for 35 years. PHLY is committed to offering long-term rate stability, even as economic and claims trends start to push premiums upwards. They have an appetite for all sorts of companies, large and small, for-profit and nonprofit alike.

“We’ve been at this game for a long time and are one of the most tenured underwriters in this space,” Schalick said. “We like to stay very consistent.”

PHLY has worked with both for-profit and non-profit on management liability policies. With dedicated M&PL teams throughout the company’s 13 regions, PHLY provides the support agents and brokers are looking for on behalf of their clients. The teams know their regions well and can respond to local trends. They’re also dedicated to making the renewal process as easy as possible for their partners and policyholders.

“We have real confidence in our results, so we focus a lot on making the renewal experience as painless as possible for all agents and insureds,” Schalick said.

The company is also investing in tools to help insureds avoid losses. Earlier this year, they launched a new online risk management platform, PHLYGateway, which offers resources for insureds on how to create an employee handbook and trainings on issues such as recognizing workplace sexual harassment and discrimination.

If insureds have questions, they can consult a Best Practices Help Line, provided via the platform. That way, they can get on the spot risk management guidance to help them prevent claims.

To learn more, visit: https://www.phly.com/mplDivision/managementLiability/default.aspx.

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