Conscious action needed to overcome unconscious bias

Insanity is doing the same thing and expecting different results, as Einstein never said. When it comes to boosting diversity, the definition might be looking in the same places and hoping to find different people.

Unconscious bias has long been an issue in hiring in the re/insurance industry, as Caroline Bedford, chief executive officer and founder of EDII, noted during a panel discussion on diversity and inclusion (D&I) for Intelligent Insurer. The tendency for those within businesses to hire those like themselves is well recognised. Less clear, though, is how to stop doing it.

To discuss this and other issues around D&I, Bedford was joined by a panel from across the industry: Kael Coleman, chief executive officer and founder of US-based tech-enabled re/insurance broker Protecdiv; Maurice Rose, senior manager for the ERM pillar at MS Amlin in London and chair of Link, the cross-insurance industry LGBTQ+ network; Ian Simons, based in the UK as customer director of the Chartered Insurance Institute; Patrick Tannock, chairman of the Association of Bermuda International Companies and chief executive officer of AXA XL’s Bermuda Insurance Operations, and Audry Torrence, executive vice president of North America with executive search business Stephens Rickard.

Together they looked at the barriers to greater diversity in insurers and how to overcome them.

Looking in the same places

At least part of the problem, according to Torrence, is that not all aspects of diversity are obvious. Race may be apparent, but other characteristics, such as sexual orientation or neurodiversity, may not be.

To address that, those hiring should go back to fundamental assumptions. The question they must start with is: “What is the job that needs to be done; what is the task at hand?” as she put it.

“Then they can drill down to the qualities required to accomplish the task at hand without regard to the decision-makers’ own comfort zones.”

In this respect, the sector has made limited progress, according to Simons. While it’s getting a little better with practices such as removing names from resumés or using more diverse interview panels, it is not enough.

“They’re chipping away at a fundamental problem, which is that we still have a picture in mind that’s quite defined in terms of not just the skills and behaviours we’re looking for but the type of person,” he said.

Too often, businesses set out looking for “cultural fit rather than cultural add-on”.

To address this requires conscious action, and there has been some progress. In the UK, for example, many of the leading companies have traditionally looked to certain graduates from the Russell Group universities—the 24 top universities that include Oxford and Cambridge and others respected for their research as well as education. That’s starting to change.

“We’re starting to get over the perception that you need to come from a certain background or a particular university and reach out to communities, doing more around apprenticeship schemes and using networks and charities,” said Rose.

Time for targets

For many people, however, progress remains too slow. For Tannock, the issue is personal.

“When I came into the industry, I couldn’t get a job, and there was a perception that people who look like me or came from my kind of background didn’t have the mental aptitude to participate in international business,” he said.

While there’s been some progress, there’s still too much talk and not enough action.

“We need to dig a lot deeper; we tend to go to the same pools all the time and I refuse to believe that there’s any truth that we just can’t find qualified people,” he said.

“That is a false premise. I believe CEOs have to hold everybody accountable in terms of digging deeper. Don’t just go to the same places all the time. There are historically black colleges that don’t even get any consideration. We have to expand.

“We did a study in Bermuda to look at the qualifications in terms of educational pedigree of people who are involved in the industry and we transposed that against the actual demographics of people in positions of leadership.

“We found that, by and large, people of colour who were highly educated were underrepresented in those roles, especially in middle and executive management. So from my perspective, they’re out there. We must dig deeper and hold people accountable and as an industry we’re not doing that as assertively as we should.”

That will only happen if issues such as unconscious bias are front of mind, which requires a more resolute approach to D&I. That means concrete targets, said Tannock.

“Companies need to stop making D&I ‘that thing over there’. It needs to be innate and as imperative as any other key strategic initiative,” he said.

“There’s been so much discussion on the topic of diversity, I struggle to see how people couldn’t be aware of how diversity can move the needle, especially when you factor in that we’re in the business of taking risk, and notwithstanding that we have to continue to harness as much data as possible to get a better handle on scenarios and outcomes and get comfortable with things such as ambiguity.

“If we’re going to have any chance of dealing with variation and a rapidly changing environment, we have to recruit diverse thinkers. That’s absolutely vital.

“I also struggle with unconscious bias on the racial side. When people say they don’t see colour to a person of colour, that’s probably one of the most insulting things that people can say. There are one or two distribution partners where there’s not a single person of colour in 2022. I find that unbelievable, especially in countries where the population is predominantly people of colour.

“We don’t have to deny that there’s been some progress made to have an honest conversation about some of the challenges that remain. There has been some progress but not as much as we would like to see.

“A lot of the insurance organisations signed what we called a ‘diversity pledge’ four or five years ago and that got a lot of press. But if you track what has happened since the diversity pledge, not much has happened. Execution eats a pledge for breakfast every single day in terms of moving the needle,” he explained.

Coleman is also sceptical of “pledges” that commit to action far in the future. “Pledges are for 2030, 2040 or 2050—what that really means is it’s the next leadership team’s job,” he said.

The way to get around unconscious bias is the same as how businesses address other problems, such as slower growth or shrinking margins.

“The CEO will go on their investor call and say they’re going to grow revenue by 8 percent annually over the next three years or increase margins by 1 percent or more per year over that period,” he said.

“When the CEO makes that promise to investors, they don’t know how they’re going to do it; they are telling their people to do it, or they’ll find somebody else who will.” It’s an order rather than an aspiration.

“People will very quickly figure out how to get over their own unconscious bias if they know their job is on the line, their bonus is on the line, or they’re not going to be in line for promotions.”

Broadening our appeal

That’s not to say it is easy. For a start, recruitment is only half the problem. As Bedford commented: “attraction and retention are two very different things”.

Tannock agreed, saying: “We have to do a better job as an industry if we’re going to stand any chance of remaining relevant and attracting the best high-quality talent. And it’s not just the question of getting the talent because once you get the talent, what do you do with it?

“If they come here and it’s not a welcoming environment, they’re going to leave. Things such as sponsorship, who gets the opportunities and who do they see in the company who looks like them who they can aspire to be like all matter.

“All those things are very important when it comes to attracting people of colour specifically, and also the diversity of talent we’re looking for so that we can be best in class to tackle some of the most challenging issues that we have as an insurance industry.”

To ensure all people feel welcome once they’re in the organisation, it’s essential that organisations highlight their successes, as well as acknowledge failures. “It’s very important to make sure there are visible role models across all levels,” said Rose. “Where there is diversity in your organisation, you need to ensure you celebrate it.”

It’s also important to recognise there may be a cost. While many candidates stress the importance of D&I and other issues when choosing a place to work, given more than one offer, they usually end up selecting the role that offers the highest pay.

“Particularly in entry-level positions, historically we may not have been as competitive as sectors such as consultancy, banking or marketing,” noted Coleman.

It is worth the investment and effort to change that, however, and not just so that insurers can better reflect the society they serve. As the business changes, the skills insurers need are changing, too. Even without the case for diversity, the sector needs to be looking more widely outside the industry and its traditional talent pools.

“Within the insurance market, we desperately need to modernise and march forward regarding data and technology,” noted Rose.

“We need people from tech companies such as Google or Amazon, those with tech and mathematical backgrounds,” he said. “Those industries are far more diverse and inclusive, so to attract those people, we need to be diverse and inclusive ourselves.

“Otherwise, these people won’t join, and we’re in danger of falling behind.”