The big insurance brokers are only likely to hire revenue-generators in the near future
The largest insurance brokers in the world are likely to keep headcount relatively constant over the next 12 months, only indulging in recruitment for new and niche areas or for proven revenue producers.
Aon, Jardine Lloyd Thompson (JLT), Marsh and Willis have now all reported their third quarter results and it’s been relatively positive. Revenues in Marsh’s EMEA operations were up 3%, Aon edged up by 1% year-on-year to $2.7bn, JLT has increased revenue by 7%. Willis, meanwhile, saw net income half to $26m after a drop in commissions and fees during the third quarter.
In contrast to the second quarter, after which the firms were talking up hiring plans, any recruitment in the future is unlikely to be prolific. As Daniel Glaser, group president and chief operating officer at Marsh said, headcount has largely been increased at the firm through acquisition – its takeover of Alexander Forbes last year added 700-800, for example – and there are no plans for a recruitment spree.
“We find more efficient ways to run the business and we reallocate that headcount towards the client-facing roles,” he told analysts this week.
The latter part is key; while the large brokers are generally keeping a lid on costs, they remain keen to take on people who can generate revenue. Willis said that it was planning to increase producer headcount by 3-4% annually while “actively managing underperformers” and reducing headcount in other areas. The increase in producer headcount only equates to 30-40 people, however.
“Don't believe that the expenses are going to go up through the roof just because we're going to increase our headcount. It's going to be selective,” said Joe Plumeri, CEO and chairman at Willis.
JLT seems like the best bet, having increased headcount by 400 people since the beginning of the year and has promised to continue to invest in people in its areas of specialism – construction, aviation, marine, offshore energy. Meanwhile, despite being in the midst of a restructuring programme, Aon still has around 100 vacancies in the UK.
Is it really that bleak? Andy Edwards, head of insurance broking at recruiters High Finance Group, says that headcount has remained steady, but new recruitment drives are rare – the four large brokers used to account for 60-70% of the firm’s broking vacancies two years ago, but this has shrunk to 10-15% today.
“It’s a very static recruitment market and any hiring that does happen tends to be restricted to new and more niche areas. Recently, for example, cyber risk has become an area of focus,” he says.
Last week, Marsh revealed that it hired Stephen Wares as its new leader of cyber risk practice for EMEA with a remit to expand the division.
