Two insurance guys walk into a bar. One says, “I’ve built this great business, and I want it to live on. I don’t know about succession, though. Who’s gonna take over?” The other insurance guy smiles and says, “Easy! Have sons!” 

FAST FOCUS

  • Women make up 62% of the insurance industry workforce nationwide but only 2.5% of CEOs.
  • A study of 177 nations found that only four countries provided no paid leave for mothers: Liberia, Papua New Guinea, Swaziland and the United States.
  • Research at Hewlett-Packard showed that women apply for jobs only if they think they meet 100% of the criteria listed, while men feel they need to meet 60% of the requirements.

Since this makes a lousy joke, it must be a true story, which it is. Names have been withheld to protect the politically incorrect. While women make up 62% of the insurance industry workforce nationwide—a goodly percentage, superseded only by such female strongholds as libraries, retail, healthcare, beauty salons, and nonprofits—57.5% of those women are hovering around the bottom of the ladder, answering the phone. Only 2.5% of industry CEOs are women, while 16.8% of board directors and 18.1% of executive officers are women. It’s just about all guys all the time.

But the latest word, released in September from the Bureau of Labor Statistics, is that these women are dropping out. In the past 10 years, the number of female finance workers declined by 2.6%, while the ranks of male workers grew by 9.6%. This bucks the trend of our labor market as a whole, where the number of women grew by 4.1% in the past decade, compared to a 0.5% increase in male workers.

Most of the women falling away are young, between ages 20 and 35. In some cases they’re being laid off due to the weak economy. In others, they’re being replaced by electronic multiple-choice telephone menus. Also, a certain amount of insurance, particularly personal lines insurance, is being sold online.

Then there’s the other thing: “Insurance is a cruel business,” one young, anonymous, female, industry dropout said. “It’s competitive, it’s tooth and nail, and all the decisions are made by men on the golf course.”

OK, she was mad. Does the shortage of women make a real difference, or is it just so much feminist outrage? 

Going into Labor
In fact, it’s an urgent problem for recruiting, retention, succession and even the bottom line. In 2011, as the oldest baby boomers turn 65, large numbers of senior-level employees will retire. There will be more people retiring than graduating from college. And of those college graduates, most will be women. There are now three women with degrees, undergraduate and graduate, for every two men. The number of women with bachelor’s degrees passed men some 20 years ago, women with master’s degrees followed shortly thereafter, and last year the doctorates awarded to women reached 60% of the total.

What this means for the insurance industry is that most of the brightest and best-educated young folks, who will need to be enticed into the labor vacuum to replace retired workers, will be women.

Professor Patricia Cheshier, who teaches risk and insurance at California State University, Sacramento, says that half her students are women, a vast increase over the last decade. “It’s a good career for women, and I’m definitely seeing more of them going into sales,” Cheshier says. “There’s just more of a comfort level of making those calls.” But she adds, “I think that the industry is very conservative, so I do think it will take time for women to reach the upper echelons.”

Of course, advanced degrees have never been necessary for insurance work, but for women especially, a nice little MBA is very useful. “Women in this business have to be smarter and work harder,” says Mary Sklarski, co-CEO of San Francisco’s Woodruff-Sawyer, which has been aggressive about hiring women. An MBA tells employers she’s a serious kind of working girl.

I think that the industry is very conservative, so I do think it will take time for women to reach the upper echelons.

At Woodruff-Sawyer, 40% of its employee shareholders and producers are women. “What I believe works is diversity in general, to get balanced and diverse views,” says Sklarski. “We have some all-women teams here. I’ve had to add men. I almost have to manage the other way.”  

Where the Money Is
But the best reason for hiring and promoting women is an amazing research finding: Companies with more women at the top make more money. Woman power is good for the bottom line. McKinsey & Company has been studying the talent makeup of successful organizations and discovered that those with three or more women on their senior-management teams “are also companies with better organizational and financial performance.”

Two years ago, Professors Cristian Dezso, of the University of Maryland Robert H. Smith School of Business, and David Gaddis Ross, of Columbia Business School, studied 1,500 U.S. companies to gauge the success of companies with several women in senior management. They, too, discovered that the more senior women a firm hired, the more money it made.

They also found that “greater female representation in senior-management positions leads to—and is not merely a result of—better firm quality and performance.” In other words, there’s little evidence that companies that are doing well will then promote more women, but there’s a lot of evidence that companies that promote more women begin doing better, even the same companies that hadn’t been doing well before.

But why? Ross points to two possible, not mutually exclusive answers. The safe one, he says, is that “having women near the top is a sign of a meritocracy. It’s a company that has overcome barriers to advancement and promotes its best people.”

The other reason, Ross says, is that “there is an advantage in having these complementary skills” that different genders possess. He uses the example of some police forces “who have concluded that having both women and men just makes a better force. Sometimes you need a sympathetic woman listening to a rape victim; sometimes you need 250 pounds of brute force.”

You can almost hear Mary Sklarski saying, “Duh!” Every company she has worked for has been team-based, and every one has “made it easy for women,” she says. “Women are more collaborative and do better in a team-based environment. And most of our clients are women.”

“Companies that don’t focus on coaching and nurturing their women advisors to connect and reach the female market are missing out on a lot,” says Alice Tang, past president of the Portland Metro Chapter of WIFS (Women in Insurance and Financial Service).

In her work as a retirement and succession planner for small businesses and high-income executives at The Business Planning Group, Tang says she keeps in mind that “women live six years longer than men and make over 60% of the household purchase decisions. They like to work with an advisor they can relate to.”

“It’s not about female advisors being better than male advisors,” she says. “It’s about emotional intelligence and leveraging the strength of our genders to work for the best interest of the client and the company.” 

Having women near the top is a sign of a meritocracy.

Senior Moments
So if putting women in senior positions is such an ace of an idea, why isn’t it done more often?

Traditionally, there are three reasons why women don’t get ahead, each one growing more obsolete by the minute.

First, there’s the old mommy track, in which women take time off for maternity leave and then maybe work part-time.

“Our younger employees now share that responsibility,” says Sklarski. “Both parents need flexibility on how and when they get the job done. In the old days, men went home and expected dinner. Now it’s men who are getting pulled a lot of different ways, and that makes everybody more understanding of people’s time and makes them more efficient in the time they have. When those young people reach senior levels, it will open the field.”

So will the law. According to The Project on Global Working Families, an organization based at Harvard University, a 2007 study of 177 nations found that only four countries provide no paid leave for mothers in any segment of the work force: Liberia, Papua New Guinea, Swaziland, and the United States. 

Our current law provides for 12 weeks of unpaid leave. A bill now in committee in the Senate would require employers to provide a minimum of seven days of paid family and medical leave for employees who work more than 30 hours a week.

The second most commonly heard reason that women don’t get ahead is the perception that they are not included in the old boys’ golf-playing, locker-room, men’s-club culture, where business relationships are built, clients are acquired and job tips are passed on. This, too, is an outmoded concept. There is no longer any such thing as a men-only networking club, but there are at least three for women: Women in Insurance and Financial Services, The National Association of Insurance Women, and The Association of Professional Insurance Women. Men should probably complain.

Women also have their own variety of social networks, which are now more likely to include helpful women. Also, says Sklarski, “Women are better at reaching out, at connecting.” Still, says Loti Woods, CEO of the Florida-based wholesaler McAuley Woods, the young women in her company are learning to play golf. “I don’t golf,” Woods says, “but I’ll walk a course with a client.”

The third traditional reason that women don’t get ahead is their reluctance to ask for a raise or a promotion. Research at Hewlett-Packard showed that women apply for jobs only if they think they meet 100% of the criteria listed, while men feel they need to meet 60% of the requirements. Likewise, Lloyds TSB found that women tend not to apply for promotions; although, they are 8% more likely than men to meet or exceed performance expectations.

Women, then, need a little coaching, a little mentoring. When an ambitious young woman asked Sklarski at a speaking engagement what she should do in her large brokerage house where there are no senior women and no female mentors, Sklarski told her: “Quit.”

I don’t golf, but I’ll walk a course with a client.

Woods came up through the industry 35 years ago, “when it was me and a bunch of male underwriters and clerical women.” She says she would have benefitted from having women mentor her when she was young. “But nobody did,” she says. “I had a bunch of guys trying to figure out what to do with me.”

These days she’s organizing a crusade to bring more women into the industry and push them up the ladder. “We are pulling them right out of college into our Newbie Program,” she says. “They are mostly women and terrific.”

She adds: “These days if you show up and show you’re smart and you’re willing to work hard, you can move pretty quickly through the insurance ranks. Women in insurance are generally smart, and I think guys like to deal with women who are smart and not just cute. You stand out in that red suit. You can make a lot of money if you’re good.” The secret—not a new one—is to learn the ways of men without becoming them. “Men grow up playing team sports,” Woods says. “They are competitive. Women are collaborative. Here’s the thing: I don’t like confrontations, but I’m not afraid of them. If women were driving the insurance industry, you might find a gentler, softer touch. But they’ve got to be balls-to-the-wall when necessary. No class teaches you that. That’s what mentoring is good for.”

Now Woods wants to start a women’s mentoring group. These days, she combs the online professional network LinkedIn and writes to women in insurance who have won awards or good promotions, then meets with them as she travels for business. Her goal is to start a nationwide group of female mentors who will commit to helping younger women.

Women in insurance are not terribly optimistic about an imminent switch to female-run companies, though it’s happening now in many other industries. When it does happen, companies can expect better benefits, more flexible work hours, more working offsite, a gentler environment and one of the scariest new management inventions to come down the pike: the Results-Only Work Environment (ROWE), where the only thing that matters is results, not office time, face time or bootlicking.

So the new answer to the issues of succession, retention, increased profits (and probably world peace and happiness) is no longer to “have sons.” It is, perhaps, to adopt really bright daughters.