Viewpoint: Too soon to cut DEI ties

Diversity, equity and inclusion programs have become a contentious topic as companies everywhere seek to balance customer, shareholder and organizational needs. The ongoing DEI backlash, which has been building for several years, has been prompted by a changing political, regulatory and social environment in which corporate diversity programs and policies are coming under unprecedented scrutiny.

The backlash has gained momentum in recent months under the new presidential administration. In a series of executive orders issued since his second term began, President Donald Trump gave notice to companies that his administration deems DEI policies and programs “illegal” if they result in reverse discrimination in violation of federal anti-discrimination laws; established a federal policy recognizing two genders; and ended virtually all DEI-related programs and policies in the federal workforce.

Companies are responding in various ways as they grapple with the shifting landscape. Some have removed references to diversity, equity and inclusion in their 2024 annual reports to investors, and some have cut diversity hiring and promotion targets. And some have stopped marking cultural observances like Pride Month and Black History Month, and diversity offices have been closed or renamed.

While many organizations have scaled back their DEI policies, others are holding firm and have issued public statements supporting DEI. Leaders at Apple, Costco, Delta Airlines and J.P. Morgan Chase are among those that have spoken out and defended their policies.

As the legal and political landscape on DEI evolves and becomes increasingly complex, employers, including brokers and insurers, must walk a very fine line. Whether they choose to leave diversity programs in place or scale back policies, the reality is that either action could expose them to discrimination lawsuits. As we report on page 8, lawsuits related to claims of reverse discrimination and the legality of diversity programs are expected to increase.

The situation is fluid, and ongoing fine-tuning of diversity-focused programs related to hiring, promotion, retention, and other practices will be needed, but the insurance industry, like other sectors, is at a pivotal moment.

Despite notable events that have raised public DEI concerns, such as the murder of George Floyd and the U.S. Supreme Court decision that effectively ended affirmative action in college admissions, progress on DEI in the industry has been slow. There are still no female or black CEOs at the largest U.S. commercial insurers and brokers, and progress on adding more diverse leaders to the industry’s ranks has been limited.

Attracting, developing and retaining top talent has long been a key focus for the risk and insurance industry, and diverse, inclusive workforces have been shown to contribute significant long-term value to organizations. Meanwhile, many customers and shareholders continue to advocate for robust DEI commitments and consider them essential to both an organization’s economic value and its corporate responsibility.

Now is the time for insurance and risk management professionals to keep their focus on DEI and not retreat or hit the pause. That said, DEI strategies must be inclusive and create equal opportunities for all employees. Companies that continue to prioritize diverse, equitable and inclusive workforces will not only be more resilient and better equipped to navigate shifting political climates and other risks but will be well-positioned to innovate, attract talent and foster a sustainable culture where all employees feel valued and can thrive.