99,000 jobs have gone in the City, but insurers are still struggling to hire. Why?
Nearly 100,000 City jobs have been eliminated since 2007, but in the comparatively buoyant insurance market firms are facing a skills shortage. What's more, this is arguably more pronounced in the London market.
The latest figures from the Centre for Economics and Business Research suggest that the number of jobs in the City is likely to be down to 255,000 by the end of 2012. This is the lowest figure since 1996 and 99,000 fewer positions than in 2007.
However, the insurance industry, particularly the London market, is facing a skills shortage that starts at the graduate level and extends into management roles. Slowly, however, there are signs that the situation is improving.
In the 2011 skills survey by Chartered Institute of Insurance (CII), 89% of insurance companies in the London market said that they were experiencing a skills shortage that was having a harmful effect on performance – up from 77% in 2010. However, the London market also offers more internships to graduates than any other sector, which suggests that it’s more proactive in nurturing new talent.
Ad-hoc graduate recruitment
“Internships in the London market are carried out on a more ad hoc basis than in other areas of insurance,” says Caspar Bartington, who manages the talent outreach programme at the CII. “Usually there’s a personal connection – family or neighbour of someone working at the firm. Although the number of firms offering internships in the London market is high, without that formalised process, it’s arguable that they are not as valuable as other areas of insurance.”
Most insurers in the London market bemoan the educational standards in the UK, and the higher level of client interaction in the City usually means firms only want to take on the very best graduates. It doesn’t help, of course, that the best and brightest graduates have been attracted to the glamorous and highly-paid investment banking roles over the past five years.
“We’re finding the graduates with an interest in finance are casting the net wider and looking towards insurance roles,” says Bartlington. “The reputational damage to the banking sector has encouraged more graduates to consider insurance and application rates are increasing. One insurer in the London market has received 2,000 applications for eight vacancies.”
Insurance firms in the London market generally offer between 5-25 graduate roles, he says, and this year they’ve received thousands of applications, suggesting a new-found interest in insurance careers.
However, the lack of previous investment in graduate recruitment is now causing problems for insurers looking to hire further up the career ladder, says Lloyd Rosenthal, director, Hays Insurance in London.
“Because firms didn’t bring candidates through in the last five years, it’s very difficult to find candidates at that mid-management level within broking and underwriting in the London market,” he says. “Coupled with that, clients expectations are high and only the very best candidates are securing roles currently. We’re doing more headhunting now than we ever have.”
Shedding the "grey suit" image
Half the battle in attracting more people to insurance is shedding the “grey suit” image, says Rosenthal. “Investment banking and financial markets have done a great PR job in convincing people that it’s an exciting career path, but in reality the day-to-day job is relatively routine. Insurance has had some bad press, but it’s an exciting, stable and well-paid career.”
At the more senior end underwriting roles in the London market pay salaries of £125-150k, according to Hays’ research, and broking positions can offer packages of over £200k.
However, not all salaries seem so alluring. Broking technician roles pay £25-30k, broking account executives should expect £35-55k, business development roles offer salaries up to £60k and senior broking roles £75-85k, suggest figures from Hays.
