Insurance Diversity Initiative

California Department of Insurance

Industry: Government

Principle 5: Business, supply chain, and marketing practices

The Insurance Diversity Initiative (IDI) was established by Insurance Commissioner Dave Jones in 2011 to increase procurement from diverse suppliers, such as women business enterprises (WBE), and to increase diversity amongst insurer governing boards within California's $332 billion insurance industry. To accomplish these goals, the Department leads numerous programs, such as the annual Insurance Diversity Summit, the Insurance Diversity Task Force, and, most notably, the Insurance Diversity Surveys. When the Commissioner first entered office in 2011, he found there was little or no data available on supplier diversity and corporate board diversity in the insurance industry. He launched the IDI that year to address this lack of information and it has continued to expand and make great strides.

"The California Insurance Diversity Initiative started a conversation among insurers, diverse suppliers, governing board members, advocates, and stakeholders that has translated into action. Since its inception in 2011, it was meant as a way to open doors of economic opportunity for diverse business owners in California." 
Dave Jones
California Insurance Commissioner

The Insurance Diversity Surveys collect and publicly disseminate critical information about the state of diversity in the insurance industry, particularly supplier diversity and corporate board diversity. Through the transparency of companies’ disclosures in these areas, “what gets measured gets done.” The mere act of asking insurance companies, “How many board members publicly identify as a woman?” plants board diversity in the minds of decision-makers if they have not already considered this vital aspect of their business. The data also reveals how many contract dollars insurance companies spend on women-owned businesses. For the first time ever, information from insurance companies about their diversity efforts is being collected and made public.

How does this model practice work?

The Insurance Diversity Survey collects information from insurance companies with written premiums of $100 million or more in California on supply chain diversity and the diversity of their governing boards. As in other industries, supplier diversity is a win-win for the diverse business and the insurer. To California's minority-, women-, veteran-, disabled-veteran-, and LGBT-owned business enterprises or diverse businesses, the IDI represents an open door to a once seemingly impenetrable market and increases business opportunities. To the insurer, opening the door to diverse suppliers has resulted in greater competition for bids and cost savings to the company. Enhanced quality, creativity, and innovation within those bids are an added advantage, giving companies the competitive edge they need to keep up with changing demographics. According to California Insurance Code - INS § 927, “Insurers are uniquely positioned to build relationships within the communities they serve through the development, inclusion, and utilization of certified minority [and] women…business enterprises whenever possible.”

"[The IDI] embraces… proactive efforts to support more women and equitable participation in leadership positions, highlights the Commissioner’s commitment to leadership, transparency and accountability, and aims to enhance the business, supply chain and marketing practices of insurance companies with more diversity." 
Amorette Yang
Deputy Commissioner, Community Programs & Policy Initiatives Branch

In the first Insurance Diversity Survey in 2012, insurance companies self-reported their annual procurement spend in California with Women Business Enterprises (WBEs) at $153 million. As of the last Insurance Diversity Survey collected for the year 2016, that same annual procurement spend has increased over three-fold, to $506.4 million.

In 2016, the IDI expanded the survey beyond California by creating the Multistate Insurance Diversity Survey (MIDS) with five (5) partner states, including New York, Washington, Oregon, Minnesota, and Washington, D.C. to survey an expanded population of insurance companies. Together, this group captured 70% of the country’s $1.84 trillion insurance market. This expanded dataset allowed the Department to measure the progress of women’s participation in the areas of supplier diversity and governing board diversity at the state and national level. Unfortunately, the data revealed that national spend on women business enterprises decreased from $2.7 billion in 2015 to $2.5 billion in 2016, prompting the Department to enlist the expertise of an institutional research organization to conduct an in-depth analysis of the dataset in order to develop solutions that address this issue.

In the first Governing Board Diversity Survey in 2014, insurance companies reported that 19% of their board members were women, and this number increased to 20% by the second Governing Board Diversity Survey in 2016. However, out of over 600 companies surveyed in 2016, there were 96 companies that reported having zero women on their boards. This and other data collected from the Survey serve as metrics for the progress of the IDI, showing the trends and progress in gender equity at the corporate executive level and in the supply chains of insurance companies. 

How can I adopt this model practice in my workplace?

"[The IDI] was created, not only to increase supplier and governing board diversity within the industry, but to be transparent; to ask questions no commissioner had asked before [and] bring diversity to the forefront in an increasingly diverse nation." 
Rebecca Ball
Insurance Diversity Coordinator

The Insurance Diversity Initiative is scalable and can be replicated by both businesses and government agencies. Surveys can be administered in a number of ways depending on the resources available to your organization. To date, the Department has issued both individual emailed surveys as well as a more robust online survey and database. This practice also presents an opportunity for public-private collaboration. The IDI plans to expand its partnerships with other organizations and state agencies that share the same vision and mission of equity to develop joint-programming that strives for greater diversity.

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