Time to beat bias in insurance

Opening your eyes, ears and mouth, and call attention to bias

Time to beat bias in insurance

Insurance News

By Bethan Moorcraft

Are you 6ft 2in or taller and male?

The good news is: you’re 9x more likely to become a company CEO than a woman or someone shorter than you.

And the bad news: your appointment might not be based entirely upon merit. You could be a prime example of a commonly shared bias.

“Bias is a dirty word,” said Katherine Bryant, executive coach and founder of The Progress Partnership, a consultancy working exclusively within the risk and insurance sector. “But it’s a completely normal part of being a human being.”

Speaking in front of 60 senior execs at a Bias in Insurance event co-hosted by Lockton and Beazley, Bryant described the two types of bias – conscious and unconscious – and how they might impact the insurance industry.

Conscious bias is something we should all be aware of. It’s when we make an impression and decision about people based on what we have seen and interacted with before. The story goes that Henry Ford famously refused to hire people who seasoned their food with salt before tasting it – now that’s conscious bias. If you think about it, you should be able to address it.

But how do we beat unconscious bias in the insurance industry? This bias affects us all. It’s a natural and necessary part of being a human – but it can affect our ability to make sound, logical decisions and to manage our professional relationships. “We need to work together, because it’s much easier to note unconscious bias in others than it is in ourselves,” Bryant explained.

Take authority bias – the tendency to attribute greater importance to the opinion or instruction of an authority figure. This could negatively impact a company’s risk taking, broking, underwriting, leadership, recruitment and business strategy. Does the person in the highest position of authority always make the best call? Or, should we question their decisions and consider an alternative outcome?

Then comes the problem of conformity, which is “particularly dangerous,” according to Bryant. “It makes us feel safe to be part of a pack, but it’s dangerous if everyone becomes the same,” she told the audience. Consider board room decisions within your organization. Do you feel comfortable speaking up and raising concerns about business decisions? And what about your underwriting
decisions and value-added services – are you going to offer the same as the pack or go the extra mile with a bespoke offering?

“Anchoring is another common human tendency. It’s when people rely too heavily on the first piece of information [the anchor] when making a decision,” Bryant explained. This affects how companies pay people, decide upon the budget, set premium rates, and offer programs. Insurance brokers need to consider ‘anchoring’ when discussing potential policies with clients – and it’s a two-way thing. Make sure you take a holistic view of a client’s background when offering services, and ensure you offer all possible options for the client to make an ‘un-anchored’ insurance selection.

Finally, all companies are vulnerable to unconscious bias in the way they hire employees and establish workplace culture. “We naturally warm to people who are like us and we prioritize them over others,” said Bryant. This is called affinity bias. “There are companies out there that hire people that are just like them because that’s what they think workplace culture is,” she added. “In fact, companies who are more diverse tend to have better employee retention and financial reports.”

The London-based event required the Beazley and Lockton execs to think about how bias impacts their decisions and take part in a few unconscious bias challenges. It finished with a call to action. “You can positively influence company culture and beat bias by opening your eyes, ears and mouth, and politely calling attention to it,” Bryant told the audience. “Together we can beat unconscious bias.”

Ask yourselves: where is your company at risk from bias - and what are you going to do about it?

Related stories:
How Lloyd’s CEO is leading by example on diversity & inclusion
GEICO charges women more than men for auto insurance – should it?

Keep up with the latest news and events

Join our mailing list, it’s free!