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By McKenzie Jackson/California Black Media
California’s African-American-owned businesses are among a group of corporations that the California Department of Insurance (CID) would like to see have a bigger stake in the Golden State’s $257 billion insurance industry.
During the Diversity Task Force meeting held Monday CID Commissioner Dave Jones said his office is focused on finding ways to increase diversity in procurement and governing boards within the insurance industry.
“I am talking in particular about women-owned businesses, minority-owned businesses, and [disabled] veteran-owned businesses “who typically want a chance to have an opportunity to compete,” he said., To know where those opportunities are, and to have an opportunity to build their businesses for their families, for their communities, and for their employees.”
In an effort to do this, next month the CID will be administering the 2015 Insurer Supplier Diversity Survey, which will require the state’s top premium issuing insurance companies to report their procurement efforts with Minority Business Enterprises (MBEs), Women Business Enterprises (WBEs), and Disabled Veteran Business Enterprises (DVBEs). Two years ago, the bi-annual survey found that in 2012, 207 insurance companies awarded 1,300 contracts worth $930 million to businesses owned by members of those subgroups. Sixty-six of those enterprises were headed by African Americans.
Jones, who has been Insurance Commissioner since 2011, said California, which has the largest insurance market in the country, is home to one-fifth of the nation’s minority-owned businesses and 1.1 million women-owned corporations; the highest numbers tops in America. However, he said, more cooperation is needed between those businesses and insurance giants such Allstate, Farmers Insurance, and Berkshire Hathaway, Inc.
“What a tremendous opportunity that would be to bring these two segments of our economy together,” he said.
During the two hour meeting, Jones and Naveen Habib, one of CID coordinator’s for the Insurance Diversity Initiative, went through a draft of the two-part diversity survey. Jones also introduced the 2015-2016 Insurance Diversity Task Force, a 15-member body composed of economic and legal specialists from across the state. The group is charged with making recommendations for bolstering the number of MBEs, WBEs, and DVBEs that partner with an industry that is vital to how businesses in California operate and how families and communities make sure their health and safety needs are addressed.
Jones said all the committee members share the common goal of striving to create greater diversity in the insurance trade.
“I am confident the wide array of expertise our new Task Force members bring will benefit our work in meeting these goals,” he said.
Task Force members and other businesspersons and insurance reps listened to the meeting by phone and chimed in as Habib went over the survey’s six-point questionnaire and survey chart.
The questionnaire asks insurance companies if they have a supplier diversity policy statement, a supplier diversity program, conduct outreach specifically to diverse businesses, set internal targets or goals in regards to its supplier diversity statement, and the name and contact information for their supplier diversity operations.
The chart features tables that divide the total amount of funds companies reveal they spent on WBEs, MBEs, and DVBEs. The chart also features headings that allow companies to pinpoint exactly what type of minority businesses won contract benefits. The headings include “Advertising/Marketing,” “Financial/Investment Services,” “Claims Services,” “Facilities,” “Human Resources,” “Information Technology,” “Office Supplies,” “Print Services,” “Professional Services,” “Telecom” “Real Estate,” “Travel/Entertainment,” and “Other.”
“We have been working very hard to make improvements on the survey,” said Habib.
Like the 2013 survey, this year’s survey will be sent to insurance companies that wrote premiums of $100 million or more. Two years, ago the survey revealed that out of the $241 million that went towards MBEs, African-American-owned businesses received the third lowest amount. Black businesses finished ahead of Native American-owned businesses and multi-ethnic-owned corporations, but finished below the dollars that went towards businesses categorized as owned by Other/Unknown (63.3 percent), Hispanic (16.6 percent), and Asian Pacific Islander (11.9 percent).
Task Force member Janice Brown, the owner and founder of San Diego-based Brown Law Group, said a number of insurance firms are part of the National Association of Minority and Women Owned Law Firms (NAMWOLF) and that they spend funds in legal expenses with many minority or women-ran law groups.
“I do think there is an opportunity to cross reference the people and the organizations that are a part of NAMWOLF with this initiative,” she said. “If corporations and organizations are spending money on outside counsel with diverse and women-owned companies they are known to have strong diversity initiative programs.”
Jones said there is a lot of opportunity for growth due to the huge economic engine the insurance business is in California.
“I think we are making good progress,” he said. “That is going to be the job of the new task force to focus on how we grow from this. We have gotten good feedback from insurance companies.”
