It’s Martin Luther King Junior day in the US when Paul Little, chief operating officer at re/insurance broker Protecdiv, speaks to Intelligent Insurer. The day, which fell on January 18 in 2021, is officially a holiday across the US, but Little says he’s happy to talk even though it’s the only work-related thing he plans to do that day.
As the conversation unfolds it becomes clear that diversity and inclusion (D&I), celebrated by remembering 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’s identity. 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 other companies 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 current demographic trends and the social climate. Think of the Black Lives Matter protests that spread worldwide 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 essentially follows economic activity, and that economic activity is driven by population, predominantly living in cities.
“To the extent that any industry is going to mimic the industry it serves, so insurance is going to serve the 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 insurance industry, particularly in mature markets. Little says this goes back to the point that insurance reflects the industries 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 the insurance industry hasn’t necessarily had the pressure that to be more competitive it needs to have a more diverse workforce.
“That’s changing as global competition is changing, and because of societal values. The insurance industry is following a lot of the societal trends.”
However, Little says, in some global regions, the link between being competitive and being diverse still does 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 or India. Those markets are somewhat homogeneous in terms of population so it may not have as much of an impact.
“But they do also trade with the rest of the world, so I think in the business sense it’s really about responding to the economic environment and responding to opportunities to be more competitive.”
“Companies that continue to think of D&I as non-essential are not going to be as competitive.”
Paul Little, Protecdiv
Competition is king
There is plenty of research to show that companies that have a more diverse workforce outperform companies with a less diverse one. A brief Google search reveals a plethora of quality reports from reputable 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 the Boston Consulting Group, titled “How Diverse Leadership Teams Boost Innovation”, published in January 2018.
In addition to the benefits, Little urges companies to consider the ways in which their customers are viewing them, as well as looking, in the case of a publicly listed company, at how the investment community and stakeholders are viewing them.
“It comes down to innovation and understanding the customer and being able to develop and design better 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, engineering and 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 than a business imperative.
Little feels that such attitudes very often come from the fact that a company may not 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 their assets are intangible. This can be intellectual property, but it is also a social contract, or the ability to sell into a particular community.”
The social contract that allows a company to sell its goods and services means that companies that continue to think of D&I as non-essential are not going to be as competitive and eventually they’re not going to be around, he says.
“It’s one thing to assemble a diverse group of people but you have to have a culture that supports the functioning of that team.”
For Little’s own company, Protecdiv—the first tier one minority-owned re/insurance broker—its very existence means it attracts a more diverse range of talent, as the company’s reputation has convinced individuals to actively seek out the employer.
But diverse talent is not enough on its own. Companies need to create an environment where the talent can meet their potential.
“It’s one thing to assemble a diverse group of people but you have to have a culture that supports the functioning 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 people want the company to look like in the next five years. As part of this, the broker has been building relationships with universities, targeting certain groups to ensure they can attract talent from different pools, 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 Risk Management, Insurance and Actuarial Science. The difference in the composition of the population of students there is clear, certainly in the actuarial practice,” Little explains.
The firm supports local educational institutions by making community donations, and it has a special focus 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 on 2020, and discuss what 2021 would hold for them and the type of things they could do together as a group.
At the corporate level, the company emphasises the importance of supplier diversity in its business communications.
“Companies that historically did business with companies that are not very diverse are now looking at things such as supplier diversity and concentrating on the fact that they want to invite more diverse companies 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, which makes 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 the automobile industry.
“We’ve seen auto industry companies that have very strict supply diversity goals. They’re measured, and they’re reported right up to board level.”
“Our success is in many ways going to be a measure of how far the industry has come.”
Reject tribal tendencies
Although Protecdiv launched only in January 2020, Little says that one year on the firm is already seeing the 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 to having 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 up to 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 Floyd and 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 a sense of globalisation and of being denied opportunities, unfortunately turns very naturally towards some tribal tendencies.
“It does sometimes take governments to bring about change, but it’s going to take individuals who understand that the world they would like their children to grow up in is the world that they need to actively 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 has made on D&I.
“The existence of Protecdiv is a sort of test for the insurance industry. We’re creating a minority-owned re/insurance broker, we’re targeting large corporations and our success is in many ways going to be a measure of how far the industry has come.”
Image courtesy of Shutterstock / noga f