Companies involved in risk management and insurance have sought to increase the diversity of their workforce for a number of years. Yet sustained progress in promoting ethnic diversity through management training programs has been elusive. Using Equal Employment Opportunity Commission data, the U.S. Government Accountability Office provided testimony to Congress on the overall trends in management-level diversity and diversity initiatives from 1993 to 2008 across the financial services industry, including insurance. They found that diversity in senior positions remains limited. Hispanics, for example, only held 3% of senior management positions-well below their overall percentage (16.9%) of the U.S. population.
One source rich in diverse candidates, however, at least for entry-level positions, are some of the universities offering collegiate programs in risk management and insurance (RMI). By using objective measures to identify those RMI programs with the greatest commitment to and success in providing opportunities for a diverse student body, companies looking to fill intern or career positions might find a more efficient way to reach their long-term diversity goals.
In the first part of this analysis, we consulted the directories of university RMI programs available from the American Risk and Insurance Association, International Risk Management Institute, and the Western Risk and Insurance Association to compile a list of schools. This list was winnowed down to the schools that were included on at least one of three measures of diversity: Higher Education Excellence in Diversity (HEED) Award recipients, the Winds of Change list of the top 200 colleges for Native Americans, and the Department of Education’s list of Hispanic-serving institutions (HSI).
The HEED Award, sponsored by INSIGHT Into Diversity magazine, is open to all colleges and universities throughout the United States. Educational institutions are measured on their level of achievement and intensity of commitment to expanding diversity and inclusion on campus through various initiatives, outreach and programs. Student recruitment, retention and completion, and hiring practices for faculty and staff are also considered. Representatives of Potomac Publishing, Inc., publisher of INSIGHT Into Diversity, evaluate applications with assistance from RPA Inc., an executive recruitment firm specializing in higher education.
Published quarterly by the American Indian Science and Engineering Society, Winds of Change is a nationally distributed magazine that focuses on career and educational advancement for Native Americans, with an emphasis on science, technology, engineering and mathematics. Every year, Winds of Change releases a special top 200 college issue that has become a crucial resource for students and college recruiters. Two primary parameters used by Winds of Change editors to select the schools are community and retention. They mainly focus on schools with either more than 40 Native American undergraduates or 2% of the student body, and those that award more than five or six baccalaureate degrees annually. Information was compiled from the U.S. Department of Education and from Petersen’s Guides Inc. Data gathered include percentages of Native American students and graduates, as well as specific academic, financial and support programs for Native Americans.
Hispanic-serving institutions are designated as part of a federal program designed to support colleges or universities in the United States assisting first-generation, mostly low-income Hispanic students. Institutions defined as HSIs by the Department of Education receive grants that are used for faculty development, curriculum development, renovation of instructional facilities, joint use of facilities, academic tutoring, counseling programs and student support services.
HSIs are particularly important because Hispanics represent the fastest-growing segment of the U.S. population, expected to grow 167%, from 50.5 million in 2010, to 134.8 million in 2050, according to the U.S. Census. That is in comparison to a projected 42% growth rate for the overall U.S. population during that same time period. The current participation rate by Hispanics in most insurance products is generally lower than the overall population and their skyrocketing spending power is projected to reach $1.5 trillion by 2015, so insurers have particular interest in penetrating this market. Hiring and training young people with bicultural backgrounds or bilingual skills and an interest in risk management and insurance is one step toward making this goal a reality.
The list of universities with RMI programs that received a HEED Award, were included on the Winds of Change Top 200, or were identified as a Hispanic-serving institution can be seen in the table above.
U.S. News and World Report identifies colleges where students are most likely to encounter undergraduates from racial or ethnic groups different from their own. The report factors the total proportion of minority students, leaving out international students. Their formula produces a diversity index that ranges from 0.0 to 1.0. The closer a school’s number is to 1.0, the more diverse the student population.
Niche.com assigns “diversity grades” that address the presence and acceptance of students of different backgrounds. The grades are based on student ratings of student body diversity as well as their personal circle of friends in the following areas: economic status, ethnic heritage, national origin, political affiliation, religious background and sexual orientation. Statistics that represent the diversity of the student body in regards to race, national origin and their state of residency are also a contributing factor. According to the website, students are experts on the quality of campus life at their own schools, but it acknowledges that they have little basis to compare the quality of campus life at other schools. To provide a basis for comparison, Niche.com also uses relevant data from the U.S. Department of Education and self-reported data from school websites. Although outside data is incorporated, their weighting system places heavy emphasis on student responses and reviews. The results can be seen in the table on the left.
Overall, universities are doing a better job of communicating the opportunities available to students in the areas of risk management and insurance. Many students still come to their first RMI class with the perception that insurance is selling door-to-door. By the end of that first semester, however, that perception is changed dramatically, often with the help of industry guest speakers. As a result, interest among students in a career in risk management and insurance is increasing.
Companies content with playing a numbers game when it comes to recruiting may be satisfied with lists of RMI programs based on the number of students enrolled, and this method can certainly identify many excellent candidates. However, organizations that recruit at universities highly rated with respect to diversity may find this strategy to be more effective and competitively advantageous for attracting a talented and more diverse workforce. Companies that limit recruiting geographically or to the largest RMI programs may want to broaden their efforts to reach RMI students at universities that successfully address ethnic diversity.