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Why Diversity and Inclusion in Insurance and Risk Management Must Start Early in the Recruitment Process

Understanding the benefits diversity and inclusion has on the workforce is just the beginning. Recruiting early and showing the vast opportunity in insurance comes next.
By: | August 18, 2020

For those working in insurance — an industry that touches every sector, from manufacturing and construction down to sports and recreation — it is imperative that they understand not just the industry they service, but also its people.

The United States is home to many cultures, ethnicities, generations, religions and races. Early reports from the 2020 census have already shown that the U.S. population is continuing to grow in its diversity. People from all walks of life are entering into the workforce every year.

This, said Victor Puleo, associate professor and Davey Chair of Risk Management and Insurance for Butler University, is a very good thing.

“Diversity has proven beneficial to an organization. The research I’ve conducted on diversity of experience on organizational performance in the insurance industry provides evidence that diversity positively impacts performance. Having different backgrounds and different people in leadership roles not only matches the diverse community we serve but also opens an organization to new views and different ideas.”

Diversity and inclusion have also had a positive impact on organizations’ financial performance, with one study finding companies with a more diverse management team had a 19% higher revenue due to innovation.

“The industry has done a great job of embracing social justice, diversity and inclusion so far,” Puleo said.

But there is still more to do, he said, especially for the Black and brown communities. “We have made significant strides. But now everyone is looking at, did we do enough? What else do we need to do? Our C-Suites still do not reflect what we see in our communities.”

In order to create change, Puleo said the time to act starts now.

Current Events Spark a Desire to Review and Continue to Improve Diversity Efforts

Victor Puleo, Associate Professor and Davey Chair of Risk Management and Insurance, Butler University

In late May, video surfaced of a Black man named George Floyd being arrested by three officers of the Minneapolis Police Department. After news broke that Floyd had died in police custody, the nation responded in a rally cry for change.

“It was the death of George Floyd that sparked a very deep desire to make change,” said Puleo. “The insurance industry responded that it, too, would embrace change. It has stated it wants to better its efforts in creating opportunity for people in the Black and brown communities.”

He reiterated that the insurance industry has already been focused on its diversity and inclusion efforts. This call for change has become a way to review what has already come before to create opportunity and what more is needed to move ahead.

“We have diversity and inclusion officers at many of the best insurance organizations out there,” Puleo said. “We know diversity counts. We wouldn’t have this role otherwise.”

The question then becomes, how can insurance take advantage of this moment in history and really give power to its D&I officers?

At Butler University, students involved in the risk management fraternity Gamma Iota Sigma get to see firsthand how the diversity and inclusion officer role works.

“One thing students in the Beta Lambda Chapter of Gamma Iota Sigma [an International Collegiate Fraternity for Insurance, Risk Management, and Actuarial Science students] at Butler University get to see is our diversity and inclusion officer performing his duties to create equal opportunity for a diverse student body,” Puleo said.

This officer engages with the local community and works with the National African American Insurance Association (NAAIA), on a regular basis.

Cameron Alford, a graduate of Butler, was one such student who saw the benefits of this role and worked to establish a student-led council of Gamma Iota Sigma called GammaSAID, which stands for Solutions for Authenticity, Inclusion, and Diversity.

GammaSAID has enabled 85 other universities with fraternity chapters to establish a diversity and inclusion officer position, further broadening the reach of the role.

“This is a great start for the industry,” said Puleo. “It shows we are ready to do something. Not just our industry, but I think our country as a whole, are much more prepared today than ever to start to break down barriers and make successes in our country available to all.

“The insurance industry has a role in that, and they’re willing to do it.”

Ways to Make Diversity and Inclusion Count from Day One

Because insurance has a role in promoting diversity and inclusion, it must start early to recruit a diverse workforce that reflects the communities it serves.

In order to do just that, Puleo said it starts as early as high school.

“The industry provides a number of career opportunities, but we do not have as many programs advertised or available to young students.”

There are approximately 85 different universities in the U.S. that have some type of risk management undergraduate degree program. This, Puleo said, is not enough exposure.

“These are great programs, but if every insurance organization recruited solely from those universities, we could not solve the talent crisis insurance is facing,” he said.

As Baby Boomers retire from 40+ years in the industry, they are leaving behind hundreds of thousands of seats for new talent. The next five to 10 years are predicted to have a huge turnover rate, and many in insurance are scrambling to fill open roles.

“To be able to fill that gap in the talent crisis, we need to be able to reach back into the high school systems and explain to students in high school the importance of what we do,” said Puleo. “We need to get them interested early in a path toward the industry.”

Puleo said that recruiting from a diverse pool of applicants will also give organizations the ability to fill in the gap created by retirees and extend diversity and inclusion efforts. Insurance can start to transform the talent pool coming into the industry to be reflective of the communities recruits are coming from.

“This industry is ripe with opportunity from the start. We have licensing, we have credentialing, we have professional education development through designations and certifications,” he said. “We are an industry of lifelong learners. This opens a door to any number of careers in insurance.”

Finding the Place Where Diversity and Inclusion Must Start

Butler University has a long history of diversity and inclusion.

Founded in 1855, Butler’s fundamental beliefs were rooted in the idea that education should be available to everyone regardless of race, regardless of gender, regardless of religion.

“Our school still has that as its founding mission,” said Puleo. “And, starting this fall, there is a new Social Justice and Diversity (SJD) requirement in the curriculum for all students matriculating at Butler University August 2020 and thereafter. The SJD courses have student learning outcomes (SLOs) that focus on critical scholarship on the historical, cultural, political and/or social experiences of marginalized communities and recognize and critique local, national or global conditions that enable, perpetuate and/or challenge social injustice and inequality. The SJD requirement will provide an opportunity for our students to be more aware of the presence and sources of injustice prior to entering the workforce and prepare them to actively counter them.”

Butler University’s risk management and insurance program includes an undergraduate degree program in risk and insurance, an undergraduate degree program in actuarial science and an online master’s in risk and insurance.

While considered a smaller university, with a total undergraduate enrollment around 4,500 students, Butler’s risk management program shines, even being named one of the top 10 programs in the country.

“We’re working hard to keep that top-10 status by focusing on not just our educational offerings, but also through embracing social justice and inclusion as part of our mission,” said Puleo.

To learn more about Butler’s master’s program, visit: https://www.butler.edu/msri.

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




The Butler University Master of Science in Risk and Insurance is a fully online program that utilizes a unique mix of insurance and MBA courses to prepare students for the growing risk and insurance industry.

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The Betrayal of Elizabeth

In this Risk Scenario, Risk & Insurance explores what might happen in the event a telemedicine or similar home health visit violates a patient's privacy. What consequences await when a young girl's tele visit goes viral?
By: | October 12, 2020
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

PART ONE: CRACKS IN THE FOUNDATION

Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.

Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.

Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.

But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.

First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.

Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.

Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.

Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.

“Sounds dreadful,” she said to herself.

Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.

It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.

She felt like she was suffocating.

One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.

Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.

Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.

Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.

“So can you tell me what’s going on?” she said.

Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.

“It’s just… It’s just…” she managed to stammer.

The doctor waited patiently. “It’s okay,” she said. “Just take your time.”

Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”

More tears streamed down her face.

Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.

“Okay,” Elizabeth said, some semblance of relief passing through her.

Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.

PART TWO: BETRAYAL

As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.

Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.

#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.

Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.

By noon of the following day, her well-connected father unleashed the dogs of war.

Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.

“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.

“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”

“Great. Thanks, kid,” Rand said.

“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.

It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.

Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?

He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.

He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.

PART THREE: FALLING DOMINOES

Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.

In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:

Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.

The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.

Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.

Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.

The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.

Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.

That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.

“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.

There was a long silence from the underwriters at the other end of the phone.

“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.

Rand just sat silently and waited for another shoe to drop.

“Well, what can you do?” the broker said, with hope draining from his voice.

The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.

Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.

Medwell’s relationships with the insurance markets looked like it almost never would. &

Bar-Lessons-Learned---Partner's-Content-V1b

Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?

Risk Management Considerations:

The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:

  • maintain a strong patient-physician relationship;
  • protect patient privacy; and
  • seek the best possible outcome.

Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.

A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.

This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.

This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.




Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]