Diverse California businesses supplied $2.1 billion in goods and services to insurance companies last year – a 16.7 percent increase since 2018 – according to the latest California Insurance Diversity Survey (CAIDS) results released by Insurance Commissioner Ricardo Lara. Of the $2.1 billion spent with diverse businesses in 2019, women-owned businesses received approximately half of the total diverse spend.
“Just getting one contract with an insurance company can be a game changer for a small, diverse business,” said Commissioner Lara. “Our long-standing Insurance Diversity Initiative is a national model for increasing business opportunities for minority, women, disabled veteran, and LGBTQ-owned businesses and the Department’s diversity survey analysis shows our efforts are paying dividends and having a tangible impact for California’s diverse business owners. While procurement from diverse suppliers still doesn’t reflect the reality of the diverse landscape in California, the insurance industry is headed in the right direction and I look forward to seeing even more progress in the years ahead, especially as small businesses and the state continues its recovery from the pandemic.”
In addition to supplier diversity, the Department’s Insurance Diversity Initiative looks at the diversity within the boardrooms of California insurance companies. Among the 250 insurance companies that responded in 2018 and the 260 companies that responded in 2019, 21.8 percent and 20.3 percent, respectively, reported zero women while 48.1 percent and 35.8 percent reported zero members from racial and ethnic communities on their company boards – a stark contrast to California being the most diverse state in the nation.
Commissioner Lara convened insurance company executives, diverse business owners, diverse certification agencies, corporate business members, non-profit leaders, and other government agencies earlier this month at the Department’s annual Insurance Diversity Summit that, for the first time, was hosted virtually. Commissioner Lara kicked off the first day of the Summit by opening up a candid dialogue on “Race and Diversity within the Insurance Industry” with industry leaders, including Dr. Fabiola Cobarrubias, Board Director for NORCAL Group, and Glenn Shapiro, President of Personal Property-Liability of Allstate Insurance Company. The opening keynote discussion is part of the Summit’s focus on “Uplifting Our Communities” by moving from intentions to actions with the goal of advancing supplier and board diversity throughout California’s insurance industry.
The social justice movement and the COVID-19 pandemic laid bare the inequities that affect diverse business communities, especially diverse suppliers in the insurance industry. The two-day Summit also included a keynote featuring the lead authors of California’s landmark board diversity laws – Senator Hannah-Beth Jackson and Assembly Member Chris Holden – along with members of the Diverse Corporate Directors Coalition. The rest of the Summit featured business matchmaking roundtables, a resource expo, and engaging webinars led by experts on the topics of race and diversity in the insurance industry, diversity in the boardroom, navigating the insurer procurement pathways, building resilience in business strategies, how to access capital in light of COVID-19, and more.
The insurance industry collects $310 billion annually in premiums from Californians. State law requires Californians to purchase many types of insurance, including health insurance, automobile insurance, and workers’ compensation insurance.
California is the largest insurance market in the United States, and the fourth largest in the world.