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New report: Major California insurers do almost no business with firms owned by people of color

Sunday, March 12, 2017 19:43
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(Before It's News)

People of color own nearly half of California businesses but get only 3% of contracts

by Greenlining Institute Media Relations Director Bruce Mirken

Oakland – In the most diverse state in America, the 10 largest insurers do shockingly little business with suppliers owned by people of color, according to a new report released March 13 by The Greenlining Institute. Insurers buy huge amounts of goods and services in California – over $23 billion in 2014 alone – but the largest firms did barely over 3 percent of their contracting with businesses owned by people of color.

“Insurance is a huge economic force in California, one that all of us have to deal with,” said Greenlining Institute Diversity and Inclusion Director Danielle Beavers. “That these companies do just 3 percent of their contracting with minority-owned businesses – in a state where people of color own nearly half of all businesses – is just pathetic.”

For Supplier Diversity Report: California’s Insurance Companies Shirk Contracting with Minorities, Greenlining reviewed reports filed with the state Department of Insurance for 2014 by the 10 largest insurers, including household names such as State Farm and GEICO. Key findings include:

  • Under a law known as AB 53, insurers that collect over $100 million in premiums in California must report their spending with businesses owned by minorities, women, disabled veterans and LGBTQ individuals. In 2014, 226 companies filed such reports.
  • These 226 companies spent a total of $23.44 billion in California, of which minority businesses received $729 million in contracts, just 3.11 percent.

Greenlining Institute Diversity and Inclusion Director Danielle Beavers authored the diversity report.

  • The 10 largest insurers showed huge variations in their contracting with minority business enterprises, ranging from just $302,326 at Prudential to MetLife’s $38.58 million. State Farm, which bought over $618 million in goods and services in California, purchased less than 2 percent of that total from minority business enterprises.
  • Spending with different racial and ethnic groups also showed massive variations. Of the $105 million the top 10 insurers spent with minority business enterprises, just half of 1 percent ($604,020) went to African American businesses, while nearly 60 percent ($62.55 million) was spent with Asian American firms.
  • Current data collection has large gaps. For example, half of the top 10 insurers do not track their total procurement within California, leaving it impossible to know what share of contracts went to minority business enterprises.
  • Because AB 53 sunsets in 2019, the legislature must act to make this data collection permanent, and to close gaps in the data being collected.

Visit The Greenlining Institute, a multi-ethnic public policy, research and advocacy institute, at www.greenlining.org and follow them at @Greenlining. Contact Bruce Mirken at [email protected].



Source: http://sfbayview.com/2017/03/new-report-major-california-insurers-do-almost-no-business-with-firms-owned-by-people-of-color/

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