For companies looking to retain their competitive edge, if they aren’t already taking the business case forD&I seriously it is about time they caught on, Paul Little, chief operating officer at re/insurance broker Protecdiv tells Intelligent Insurer.
It’s Martin Luther King Junior day in the US when Paul Little, chief operating officer at re/insurancebroker Protecdiv speaks to Intelligent Insurer. The day, which fell on January 18 in 2021, is officially aholiday across the US, but Little says he’s happy to talk even though it’s the only work-related thing heplans to do that day.
As the conversation unfolds it becomes clear that diversity and inclusion (D&I), celebrated in part byremembering the renowned civil rights campaigner, is close to his heart.
For Little, D&I in business means a workforce and workplace that has team members of varying ages,ethnicities, genders, sexual orientation, abilities, education and background.
Inclusion is central to getting the best out of a diverse workforce, he says.
”Inclusion is fundamentally a feeling of belonging and that’s the experience of being rooted in one’sidentity. Diversity is similar to being invited to the party and inclusion is being asked to dance,” he adds.
“For some companies it’s a real thing—it’s being measured and a part of their goals, but for othercompanies it may be more aspirational.”
But he is clear that D&I is increasingly being embraced by companies and a lot of that is down to currentdemographic trends and the social climate. Think of the Black Lives Matter protests that spreadworldwide in 2020 following racially motivated murders and brutality at the hands of US police officers.
The importance of D&I for the re/insurance industry is clear, he says, because the industry essentiallyfollows economic activity, and that economic activity is driven by population, predominantly living incities.
“To the extent that any industry is going to mimic the industry it serves, so insurance is going to servethe economic interest of the businesses that are in that industry.”
There’s widespread recognition that historically there has been a lack of diversity in the insuranceindustry, particularly in mature markets. Little says this goes back to the point that insurance reflects theindustries that it’s supporting, as well as the regions and countries where it operates.
“There have been social injustices and systemic issues to do with race, certainly in the US, so theinsurance industry hasn’t necessarily had the pressure that to be more competitive it needs to have amore diverse workforce.
“That’s changing as global competition is changing, and because of societal values. The insuranceindustry is following a lot of the societal trends.”
However, Little says, in some global regions, the link between being competitive and being diverse stilldoes not hold as much sway as it does in the US, for example.
“In business terms, it may not have as much resonance in the insurance markets in China, Africa orIndia. Those markets are somewhat homogeneous in terms of population so it may not have as much ofan impact.
“But they do also trade with the rest of the world, so I think in the business sense it’s really aboutresponding to the economic environment and responding to opportunities to be more competitive.”
Competition is king
There is plenty of research to show that companies that have a more diverse workforce outperformcompanies with a less diverse one. A brief Google search reveals a plethora of quality reports fromreputable researchers highlighting the overwhelming evidence of a business case for diversity.
A sample of the results includes the McKinsey report
“Diversity Matters”
, re-published in February 2015,showing that companies with more diverse workforces perform better financially, and a study from theBoston Consulting Group, titled
“How Diverse Leadership Teams Boost Innovation”
, published inJanuary 2018.
In addition to the benefits, Little urges companies to consider the ways in which their customers areviewing them, as well as looking, in the case of a publicly listed company, at how the investmentcommunity and stakeholders are viewing them.
“It comes down to innovation and understanding the customer and being able to develop and designbetter products, so more diverse companies can be innovative in that way.”
Attracting and recruiting the best talent is another area where diversity holds a trump card.
He says that if you look at most of the finance universities in terms of science, technology, engineeringand maths (STEM) courses, you tend to see a very diverse population of students.
“If you want to attract the best talent and you want to be as competitive as possible as a business,clearly there is going to be pressure to have a more diverse workforce.”
Surprisingly, perhaps, there are still those in insurance who still think D&I is an optional extra, rather thana business imperative. Little feels that such attitudes very often come from the fact that a company maynot yet have been forced to embrace D&I.
“It comes down to the level of maturity, or the level of development, of that particular company.Increasingly, companies are going to be forced to attract and retain more diverse talent.
“It boils down to survival,” he adds. “Companies are evolving to the point where the majority of theirassets are intangible. This can be intellectual property, but it is also a social contract, or the ability to sellinto a particular community.”
The social contract that allows a company to sell its goods and services means that companies thatcontinue to think of D&I as non-essential are not going to be as competitive and eventually they’re notgoing to be around, he says.
Building relationships
For Little’s own company, Protecdiv—the first tier one minority-owned re/insurance broker—its veryexistence means it attracts a more diverse range of talent, as the company’s reputation has convincedindividuals to actively seek out the employer.
But diverse talent is not enough on its own. Companies need to create an environment where the talentcan meet their potential.
“It’s one thing to assemble a diverse group of people but you have to have a culture that supports thefunctioning of that team, so that team can be maximised.”
To ensure this, Protecdiv is setting D&I goals. It has created an employee consensus for what peoplewant the company to look like in the next five years. As part of this, the broker has been buildingrelationships with universities, targeting certain groups to ensure they can attract talent from differentpools, and is active on social media and in its interactions with the broader media and communities.
“I’ve spoken over the years, for example, at St John’s University’s Maurice R. Greenberg School of RiskManagement, Insurance and Actuarial Science. The difference in the composition of the population ofstudents there is clear, certainly in the actuarial practice,” Little explains.
The firm supports local educational institutions by making community donations, and it has a specialfocus on schools in the city of Philadelphia where its headquarters are based.
On a personal basis, the Little organised a call with black men in the insurance industry to reflect on2020, and discuss what 2021 would hold for them and the type of things they could do together as agroup.
At the corporate level, the company emphasises the importance of supplier diversity in its businesscommunications.
“Companies that historically did business with companies that are not very diverse are now looking atthings such as supplier diversity and concentrating on the fact that they want to invite more diversecompanies to compete for their business, to develop relationships and have a seat at the table,” he says.
Little points out the automobile industry as a sector where D&I is inculcated into the culture, whichmakes it more open to doing business with a firm like Protecdiv.
It’s not only the car manufacturers, he adds, it is all the parts that go into the supply chain for theautomobile industry.
“We’ve seen auto industry companies that have very strict supply diversity goals. They’re measured, andthey’re reported right up to board level.”
Reject tribal tendencies
Although Protecdiv launched only in January 2020, Little says that one year on the firm is already seeingthe tangible benefits of greater diversity in terms of the talent it can attract into the business.
On top of this, he says, there have been more opportunities as “companies are much more open tohaving meetings with us and listening to the different types of solutions we think we can bring to bear”.
“We all have blind spots, but the tragic circumstances of George Floyd’s murder have woken people upto their own blinkers and made them more open,” Little says.
However, he warns, while sensitivity to racial injustice was heightened as a result of the murder of Floydand many other African-Americans, there is still a long way to go for D&I.
“Clearly, with so many things that are happening and so many population trends, people’s reaction to asense of globalisation and of being denied opportunities, unfortunately turns very naturally towards sometribal tendencies.
“It does sometimes take governments to bring about change, but it’s going to take individuals whounderstand that the world they would like their children to grow up in is the world that they need toactively participate in trying to create,” he says.
Little points to his own company as being an indicator in itself of the progress the insurance industry hasmade on D&I.
“The existence of Protecdiv is a sort of test for the insurance industry. We’re creating a minority-ownedre/insurance broker, we’re targeting large corporations and our success is in many ways going to be ameasure of how far the industry has come.”