Best's Review


Next Wave
Rooting Out Inequities

Taking a stand on social issues and removing bias from processes will help insurers attract young talent.
  • Carly Burnham
  • November 2020
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The death of George Floyd and the riots and protests that followed have forced many of us to take a hard look at ourselves as well as the role of race in the insurance industry. Many Americans have watched these events and the calls to address racial inequities in our country from a distance.

But I live in Minneapolis and for me, these events have felt personal.

Like many millennials, I feel strongly about social justice and believe insurance has a role to play in pro-social efforts. The renewed focus on racial equality ties in with two topics that are close to my heart. How can the insurance industry attract and retain talent? And how can we serve all members of society?

The insurance industry faces stiff competition for top talent and young people have choices when deciding where to work. With this generation projected to comprise three-quarters of the workforce by 2025, it's important for companies to take clear stands on social issues like racial inequality if they want to attract and retain young, diverse talent.

Many already have. CEOs such as Apple's Tim Cook to Microsoft's Satya Nadella to Verizon's Hans Vestberg have not only expressed support for the racial justice movement, but they also have pledged to examine their own companies for areas of bias.

Many insurance companies are making similar showings of support. A number of insurers have made donations in support of racial equality efforts in recent months and have also expressed their commitment to diversity and inclusion.

Canada's Manulife earlier this year announced specific hiring and recruitment goals to increase the proportion of minorities employed in its North American businesses as part of a new five-year initiative to increase the company's diversity and inclusion.

Even so, the insurance industry needs to actively further its own diversity. This matters for a number of reasons. First, millennial and Gen Z employees want to work at companies that reflect the diversity of our country. Secondly, a more diverse workforce will lead to more creative ideas and cultures, and the insurance solutions we build will reflect more voices. Finally, customers increasingly want to do business with companies that they trust, and one of the best ways to build trust is to reflect the actual landscape of the population that you are serving.

This also leads to examining our products with an eye toward uncovering racial inequities.

Our products use rating factors like location and credit score to determine the premium that we charge. While those factors are actuarially sound, and we can prove that they are correlated with the likelihood of a claim, the Center for Economic and Social Justice, a nonprofit consumer advocacy organization, believes that an effect of those factors is that Black Americans pay more for car insurance. Recognizing this is problematic, the National Association of Insurance Commissioners has formed a special committee to focus on race and insurance.

We must think critically at this time about what other examples may exist in our processes that have led to similar outcomes. We should consider whether new technologies, such as road risk ratings and telematics, provide a more accurate and unbiased view of driver risk than ZIP codes, which historically have been linked to redlining.

We should consider where we appoint agents and how our target markets may lead to favoring certain communities over others. A number of these considerations are more likely to surface with more diverse teams. Either way, we should commit to doing the work to find and root out any racial inequalities within our processes.

Employees and customers—both existing and prospective—increasingly expect companies to identify and remedy such inequities. We are up to the challenge, and we will better accomplish the goals of our industry if we meet it.

Carly Burnham, CPCU, MBA, has been in the insurance industry since 2004. She blogs at and can be reached at

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