Minority insurance brokers, firms could ‘pave the way’ for more MBEs

Where insurance once held little opportunity for minority insurance professionals and minority business enterprises, the only way to go now is up. According to Tom McLeary, a 30-year insurance veteran, owner of Endow, and past chair of the National Minority Supplier Development Council’s National Minority Business Enterprise Input Committee, there is major growth potential for minorities and MBEs in the insurance industry.

“Here’s an industry where the opportunities are endless, both in working for companies and also for distributing products, ” McLeary said from his Chicago office. “It’s a very opportune time. Maybe the best time in many, many years.”

The opportunities that McLeary foresees are welcome news after a nearly 40-year respite. According to McLeary, the last surge of minority growth in insurance came in the 1960s as a direct result of America’s Civil Rights Movement.

“In the early ’60s, there were probably no minorities in insurance companies that had to wear a tie to work. They were all in the mail room, in the kitchen, in the cafeteria,” he explained. “In the [late] 1960s, because of Martin Luther King Jr. and the movement, there was a flock of hiring — it was enormous hiring. But then in the 1970s, it just kind of reverted to where it was [before]. So we lost all of that momentum we gained in the Civil Rights Movement; it went back to business as usual.”

With diversity currently on the minds of most major corporations, the insurance industry has been slow in its progress to include more minority professionals, McLeary said. And although nobody can explain the lag, McLeary believes that it’s the lack of highranking minorities in the profession that is the main culprit behind the industry’s low diversity rate.

“You don’t see minorities as senior executives or on the board of directors,” he said, explaining that without minority leadership there is no one to cultivate minority opportunity within a company.

But the lack of minority faces in the higher echelons of the insurance giants goes further than that, McLeary added. Just as there are few minorities who serve as senior executives or directors in bigger insurance companies, there are also few minority-owned firms who distribute their products to large corporations.

But increasing both the number of minority brokers and minority-owned brokerage firms could pave the way for both MBEs and minorities employed by firms who are looking to carve their niche in the field.

“Once the insurance companies take the distribution network of minority brokers seriously, they’ll look out and say, ‘Boy, a significant portion of our business is coming through this channel,’ and they’re going to be more inclined to buy more goods and services from minority firms, because they can see their value,” McLeary said. “That would help the minority business movement.”

With high potential on the horizon, now is the time for minorities and MBEs to secure their place in the insurance industry. One strategy that MBEs can use to assure their place in the coming growth is to join smaller firms together, whether through company mergers or strategic acquisitions.

“Capitalize on opportunity from the distribution side by becoming larger companies,” McLeary advised. “You just need size and expanded capabilities to sell to a United Airlines, to a Boeing, to an AT&T. So firms must grow; we need to have some consolidation.”

Neglecting to grow crimps a firm’s potential, McLeary added, as smaller companies find it harder to match the needs of large ones. Traditionally, big companies deal with big companies.

“It’s economy of size, and we’ve got to get bigger,” he noted. Actively developing minority talent would also help. “We need more people in the industry, particularly Hispanics,” McLeary said, reiterating that great opportunity awaits minority professionals who venture into firm ownership. “Brokerage firms are very lucrative businesses when run correctly.”

In addition, whether working for a firm or running their own, insurance professionals should keep abreast of new trends and products that appear within insurance. Attending seminars, conferences and other similar venues can help professionals stay in tune with what’s new in the insurance industry. “[Insurance] is an industry that is constantly changing,” McLeary said. “Minority firms must continue to grow from an educational standpoint; that’s always the key.

[Insurance is] a product, but it’s the ideas around the product that make the sale, so we have to keep up. We have to understand the current tax laws and how products work in today’s environment. That’s an evolving process. There’s a lot of education around the process, and we have to take advantage of that.”