Analysis: Tackling the skills shortage

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The insurance industry is facing a huge skills shortage, with employers struggling to find ways to attract and retain top talent

“As skills needed by employers change, there’s naturally a shortage of new skills that have become more important for businesses, like digital,” says Emma Saunders, head of resourcing at Allianz.

“But this is not specific to insurers: while businesses have always competed for the best talent, they find themselves increasingly competing on a broader level, beyond their direct competitors or similar industries.”

Lyn Nichols, HR director at Ageas UK agrees that competition for talent is becoming fiercer, particularly when it comes to data analytics, automation and artificial intelligence.

“The insurance industry is looking for the same skills and talents as many other sectors and, therefore, sourcing experienced candidates is highly competitive in these areas.”


New talent

For many large insurers, the answer to ensuring their workforces are equipped with digital skills lies in engaging people while they’re young: not a ground-breaking approach, but one which has become more difficult as Matthew Metcalfe, senior manager for talent acquisition at Covéa, points out.

“You can’t just run a recruitment campaign these days,” he says. “These all have to be longstanding relationships that will take up a lot of time.

“You want people to say I could come here because I know them, they’ve been into my school, or my college, or my university.”

To that end, Covéa has worked with local colleges and in January launched a bespoke four-year ‘digital degree’ with Calderdale College in Halifax, a town marked out to become a tech hub for West Yorkshire.

“The learners could be either internal or external recruits,” says Metcalfe. “While they’re studying on the programme, they’ll rotate around different areas in our technology departments and see where their skills best fit.

“We won’t predetermine where they will end up; we want them to make that decision over the four years, as to whether it’s automation testing that they really want to do, or software engineering.”

The digital revolution has changed not only the skills an employee needs but also the wants and needs of customers. This is another area in which Covéa hopes looking to members of Generation Z will prove fruitful.

“We had 270 students come in for a couple of weeks on work experience and we asked them to design an insurance product,” says Metcalfe.

“They came up with some weird and wonderful things: girlfriends or boyfriend protection and wrinkle and hair loss protection, but they also had a fantastic idea for a product to protect your social media photos in case somebody steals and uses them.

“It’s a bit of a left-field idea, but it gives you an idea of the types of products that those people are going to want to purchase in the future.”

The approach also serves to show off the insurance sector in all its breadth, beyond the preconceptions potential future employees might have.

“We asked them: how would you distribute that product? Who would you market to? What are your risks? You get them thinking around financial crime and all sorts and get them to see that there might be more to the insurance industry than selling a product,” says Metcalfe.

At the same time that competition with other sectors hots up, insurers are also casting a wider net beyond their usual recruitment fishing grounds. For example, RSA now has a psychologist in its personal lines business looking at driver behaviour and its pet claims are headed up by a former vet.

“It’s very important to us that we understand where veterinary surgeons are coming from when they diagnose pets and come up with treatment plans,” says Gerry James, HR director for claims and operations at RSA.

“It makes a lot of sense to recruit a vet who would be able to talk the same language as the vets that we deal with, and in this case they’ve progressed from being a quite specialised role in pet claims to being able to run that function, and we expect them to progress further.”


Hard market skills

The advent of new technologies is not the only thing that can leave a workforce high and dry in the skills department if proper training isn’t in place; the insurance industry’s hard-and-soft market cycle also presents challenges.

“The market is changing and the younger staff won’t have been exposed to that before,” says Kathryn Moon, branch manager of Gallagher’s office in Coventry.

Moon says that brokers that have entered and cut their teeth in the market since around 2005 won’t have necessarily been exposed to the kind of hardening market they could soon be dealing with.

“We’ve personally been running what we call ‘Raise the Bar’ sessions in our office every month, where we’re addressing soft skill-type issues, which is about preparation for negotiation skills that support us when we’re broking in a hardening market,” she says.

“We’re also making sure there’s proper on the job support, doubling up the more experienced brokers with people that haven’t been exposed to a hard market before.”



Another trend in the way insurers are looking to recruit talent is an increasing emphasis on apprenticeships spurred on by the government’s Apprenticeship Levy, which came into effect in April 2017.

The policy sees employers taxed 0.5% of their paybill in return for funds that can be used to train staff.

“At Axa UK, we’ve been using apprenticeships to attract and retain talent. Since 2017, we have moved away from graduate programmes, keeping only one such scheme, for actuaries,” says Emma Austen, head of employer brand and professional qualifications at Axa UK.

“Our motivation was to expand our talent pool: apprenticeships help us hire and promote people from more diverse backgrounds.

“They are open to people of all ages, whether they are new recruits or longstanding Axa employees, and we encourage applications from all types of profiles, from school leavers to people returning to work after a career break.

“Almost 200 apprentices currently learn and work across Axa’s UK sites, in claims, IT, customer support and other departments. We believe their diverse backgrounds and up-to-date skills will make us more creative and competitive.”

Like Axa, RSA has sought to harness apprenticeships, reserving graduate programmes for actuarial and financial functions such as pricing.

“We heavily invest in training and we make full use of our apprenticeship levy in two ways,” says Amanda Birkett, director of learning, development and resourcing at RSA.

“One is to bring in school and college leavers, typically aged 18 and 19. They come in and do their Chartered Insurance Institute exam as part of their apprenticeship.

“We also offer our existing employees apprenticeships, and we have a huge uptake of those. Most of them are CII apprenticeships but we actually offer 16 different apprenticeship schemes.”


Lifelong learning

Building the skills of existing employees is another focus of insurers, particularly because of concerns around retaining hard-won talent within organisations.

“If you understand new technology platforms and you understand customer experience, you become quite mobile and can move beyond financial services,” says Metcalfe.

One insurer ensuring staff are able to continue developing new skills is Allianz.

“It’s not all about new starters,” says Emma Saunders, head of resourcing at Allianz. “Continuing learning and development is incredibly important and we pride ourselves on the range of options available to employees.

“This includes a range of workshops, webinars and online learning as well as accredited internal academies and access to professional qualifications with professional bodies.

“We also run a career returners scheme for those looking to return to work after an absence of two years or more.”

Saunders sees the work Allianz does internally to ensure employees are constantly developing their skills as one of the reasons why the prospect of an ageing workforce in the years to come isn’t as much of a concern as might be otherwise.

“With employees continually upskilling and robust succession planning in place it’s a case of expertise rather than age being the important factor,” she says.

Ageas too seems to be taking the prospect in its stride. Lyn Nicholls, HR director at Ageas UK says: “Yes, statistically there are more people nearing retirement age, but this doesn’t necessarily mean they are leaving our business or the insurance industry.

“For those who are retiring from our business we have an active programme of ensuring knowledge and experience is transferred to their successors.”

“It’s increasingly common to see senior colleagues make the decision to take slightly different roles in the industry on retiring from their day job, such as becoming a non-executive director, or freelance consultant for a few days a week.

“This offers them a different style of working and gives our business the ability to tap in to their experience when we need it.”


Insurtechs: a threat?

As much as insurance companies are increasingly facing competition for talent from other sectors, the more established players are also facing fresh competition from within the industry from a host of incipient insurtechs.

However, more traditional companies seem bullish about what the rise of insurtechs will mean for the industry’s recruitment prospects.

“Any organisation that attracts talent to the industry should be seen as a positive,” says Nicholls.

“While insurtechs are raising the bar with innovative employment practices others in the industry are quickly catching up particularly in the areas of technology, working environment, flexibility and collaboration.

“Ultimately this is enhancing the proposition to retain talent within the industry.”

James seems undaunted by the prospect of competing with insurtechs, saying: “We’re successfully bringing graduates into our technology division as well, even with our location in London, which is close to the emerging tech villages in Shoreditch and so on. We’re still successfully competing for the right talent.”

His assessment strikes a chord with the view of Peter Clarke, founder and managing director of startup Insurercore.

“Insurtechs definitely create a better work-life balance, and you’ll generally find that’s why the founders created a company: so they could achieve that themselves, so it’s also better for their employees,” he says.

“But that said, it is very difficult for insurtechs to attract the top talent and beat the wages offered by the big companies, especially the early stages.

“In terms of people moving across to insurtechs, it won’t be for a number of years until they reach a certain level of maturity. People still like that security, as much as everybody wants flexible working hours.”

As for what the appeal of insurtechs to new talent might be, Clarke says: “You own your own job: you’re part of a very small team, so your responsibility is far greater and a lot more weight falls on your shoulders.

“You can get involved with far more aspects of the company, and for people joining the market and not knowing exactly where they want to go in their career, giving them the flexibility to get involved in everything is a plus.”


London market

Another aspect of insurtechs’ appeal lies in their ability to present themselves as vibrant and modern technology companies, as opposed to staid, traditional insurance firms.

The general perception of the latter hasn’t been helped by headlines in recent months, with Lloyd’s in particular coming under fire for its workplace culture.

“Insurance as an industry has a perception problem: the societal good we do is not well recognised, and we all need to do more to get those messages out to the talent we want to attract,” says Matthew Wilson, group CEO of Brit Insurance and sponsor of the London Market Group’s talent work-stream.

“Attracting those people is challenging as they are in high demand from most industries.

“The work that we have been undertaking with London Insurance Life is really delivering. By using social media and young ambassadors from the market we are reaching out to schools and colleges and talking about the variety of roles and careers on offer.

“On the flip side we also need to ensure that the market is receptive to diverse talent at all levels in organisations, as when we attract new, diverse talent we need to make sure we keep it.”

The LMG, alongside Deloitte, last year published a report entitled Talent in the London Market. One of the conclusions the report drew was closing the gap between the skills the market will need in future and what it has today “will require an upheaval, rather than incremental change”.

With that in mind, is there currently any shift in attitudes on the ground within the Square Mile?

“There is a less negative perception of the insurance industry than in the past, and we are finding there is increased fluidity with people joining the industry from different backgrounds,” says Claire Davies, HR director at Gallagher UK.

“Generally the majority of people who move into insurance find it more fulfilling than other sectors they have worked in, and than they expected looking from the outside in.

“In financial services, in particular, the silos are decreasing and we are increasingly seeing people move into insurance from banking and investments.

“We are also attracting people from completely different sectors who want to stay doing what they are doing, for example sales, but move into the insurance industry.”


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Harry Curtis 

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