Trump 2.0: The future of DEI in the insurance sector

By Rebecca Delaney

Feb 7 - (The Insurer) - The US government's move to roll back diversity, equity and inclusion (DEI) initiatives is unlikely to be replicated to the same degree in the country’s insurance sector, although it raises questions around the work that remains to be done across the global specialty insurance market.

Market sources canvassed by this publication described the current policy landscape as a “fraught moment”, with issues around DEI becoming increasingly politicised – much like ESG two years ago.

Following his inauguration, President Donald Trump signed a slew of executive orders seeking to unwind the “infiltration” of DEI programmes across the federal government and armed services.

The orders mandate that the Department of Education and other agencies recommend measures to encourage an end to what were described as “illegal and immoral discrimination programs, going by the name DEI”.

Trump also ordered that the Director of the Office of Personnel Management be provided with a list of all agency or departmental positions focused on DEI or “environmental justice”, as well as any related committees, programmes, services, activities, budgets, grants and expenditures.

This publication previously reflected on the US Supreme Court’s June 2023 judgment striking down affirmative action in college admission processes, exploring the potential ramifications for DEI programmes in private workplaces and employment practices.

This is no longer theoretical, with tech giants Meta, Amazon and Google having taken steps to remove their DEI programmes in recent weeks.

Meta cited changes to the “legal and policy landscape”, while Amazon employees were told in a memo that the company was “winding down outdated programmes and materials”.

Google said it is reviewing DEI programmes, grants and policies which “raise risk or that aren’t as impactful as we’d hoped”, while also “evaluating changes to our programmes required to comply” with the new orders.

Market participants speaking to this publication on the condition of anonymity said anti-DEI sentiment is generally more prominent among B2C businesses, while insurance companies and professional services firms are more likely to take a longer-term view, particularly those operating globally.

Sources told this publication there remains a firm business case for DEI in the insurance sector.

Firms are generally expected to continue to focus on talent acquisition and effective hiring strategies as strategic imperatives, although efforts around inclusion, wellbeing and retention may be rebranded under new headings such as people management goals.

However, others indicated that there may be some quiet rolling back of headline metrics measuring representation in leadership roles, which are predominantly focused on gender and ethnicity.

Shawn Cole, president of Cowen Partners Executive Search, told this publication last month that firms within the US insurance industry no longer see DEI as a key factor in recruiting C-suite members.

In previous years, mandates to find diverse C-suite candidates accounted for around 50 percent of Cowen’s searches, but have been “virtually non-existent” in the past 12 months.

However, Cole suggested that this sentiment is not merely a reaction to Trump’s election – instead, it has been growing among US insurance firms over the past year as many companies have found diverse recruiting increasingly difficult.

Whether this spreads to non-US markets remains to be seen.

A survey of more than 140 UK employers by Occupational Health Assessment Ltd found that 69 percent of senior finance, human resources and C-suite professionals expect the retreat from DEI projects in the US to have at least some impact on the UK workplace – but only 6 percent thought these changes would be major in nature.

The London market has taken steps to improve DEI practices in recent years, with accountability metrics such as the Lloyd’s market practices and policies return and the culture survey providing annual updates on representation and sentiment across the market.

In addition, the Dive In Festival celebrated its 10th anniversary last year, with the three-day event exploring a range of intersectional topics including career returners, neurodiversity in the workplace, ethnicity and social mobility.

The most recent market practices and policies return indicated that Lloyd’s had hit its 35 percent short-term target for the proportion of women in leadership roles, although it continued to fall short on its one-in-three hiring ambition to increase ethnic diversity.

Elsewhere, data from the London Market Group found that the London market’s gender bonus gap increased year on year in 2023, returning to the 2021 level of 61 percent as women continue to be less represented in roles with higher discretionary pay.

The progress that remains to be made across the wider UK financial services sector has not gone unnoticed from a legal or policy perspective, with a parliamentary report in March last year identifying a cultural and institutional “deficit” in the City of London.

The Sexism in the City enquiry carried out by the Treasury Select Committee outlined ongoing barriers, including poor workplace cultures, unconscious bias, and DEI being treated by many firms as a “tick-box” exercise rather than a core business priority.

Eyes are expected to remain on EC3 over the next four years to see to what degree – if any – the US policy landscape pervades the London market…