With a tight employment market strangling growth, insurance companies are locked in a battle to secure talent

In the long canon of Insurance News interviews with the great and good of this industry, there is one question-and-answer combination so common it has almost become cliché.

The question: how did you come to work in the insurance industry? The answer, as often as not: I fell into it; it chose me! (or some variation on that theme). This is usually followed by a sincere declaration of love for the work, and thanks to the hands of fate.

Of course, there are plenty more who take the plunge following a considered look at the sheer breadth and diversity of roles available in the industry compared with other corporate sectors.

But what happens if not enough people are falling into, or actively choosing, insurance work?

According to Kathryn Carson, Regional Director of recruitment specialist Hays, skills shortages are “a key issue for the insurance industry right now”.

“We’ve never seen such a tight labour market, and the Australian insurance sector is still not seeing the numbers it needs to fill vacant jobs,” she tells Insurance News.

She says the biggest skills gaps are in the roles of underwriter, insurance broker, technical claims manager, loss adjuster and broker support.

“The employers we’ve spoken to recently tell us that staff shortages are still their main constraint on growth. They don’t see the shortage of qualified skilled professionals easing any time soon.”

In last year’s Hays Salary Guide, 80% of insurance employers said skills shortages were affecting the effective operation of their organisations or departments.

The tight labour market is not unique to the sector, as Insurance Advisernet Managing Director Shaun Standfield notes.

“It’s not just the insurance industry struggling to find new talent,” he says. “Many industries have been impacted by this due to a post-covid period of no new skilled people coming to Australia in the numbers required to fill…vacancies, coupled with an all-time low unemployment rate.”

But Ms Carson points to several sector-specific factors, including “the industry’s ageing population, a shallow domestic pool of professionals moving into insurance, minimal skilled migration in the past three years and a lack of internal upskilling”.

She says the need for Australian and New Zealand Institute of Insurance and Finance (ANZIIF) accreditation in many roles is another issue.

A ‘huge shortage’ of underwriters and brokers

“Despite the borders reopening to overseas skilled individuals, many don’t have the relevant qualifications or regulation experience.

“In addition, at the beginning of the pandemic many large insurers onshored roles, predominantly in the claims space.

“While this helped entry-level candidates enter insurance claims, few entered underwriting and broking. As a result, there is now a huge shortage of underwriters and brokers at the two- to three-years’ experience level. And as people head overseas again, we’re also losing talent.”

“We’ve never seen such a tight labour market, and the Australian insurance sector is still not seeing the numbers it needs to fill vacant jobs.”

Ms Carson says that, along with a drop-off in new talent, the worker pool is experiencing a fair degree of churn.

“The market is booming, but the shortage of skilled candidates means that many existing employees are struggling with high workloads,” she says. “As a result, many people are looking to either transition out of the industry or into another field. For example, we are being contacted by a lot of broking account executives who are looking to move into underwriting.

“Another factor driving turnover is flexibility. The market is now able to see who is truly committed to offering their employees flexibility, and who is not. This is leading to staff turnover as the employees who value flexibility above all else move to employers who genuinely offer it.”

Clearly, the situation is forcing insurers and brokers to adjust their approaches to recruitment, and to staff training and advancement.

Last year, James Toth from recruitment agency Kona urged companies to be more creative and drop “rigid” hiring expectations after experienced professionals began demanding “30-40-50%” pay increases to move roles.

“Companies started to say yes because they were so desperate,” he told Insurance News in June. “It’s beyond anything I’ve experienced. It’s just jumped in the space of two years; their salaries are insane.”

He said poor succession planning was taking a toll, and he recommended filling roles with less experienced workers and a junior alongside them to be mentored, thus creating a pipeline.

Accurate representations are important

Hays’ Ms Carson says one unintended consequence of the competitive market has been “employers overselling their role to attempt to quickly secure skills”.

“In the rush to position the opportunity in the best possible light, some fail to take the necessary time to give candidates an accurate representation. But when the reality of the job differs from that promised, [staff] turnover rises and the employment brand is damaged in the local market.”

She adds that the “return to office struggle” poses a challenge for employers, and recommends they make clear their “office value proposition” – a statement on the tangible and intangible benefits of working in the office rather than from home.

Mr Standfield notes there “seems to be less internal upskilling now to fill senior positions, with many roles seemingly filled from competitors. This has recently been evidenced by many staff moving between insurers and underwriting agencies to fill senior roles.”

He says his broker network recently launched an accelerator program to train staff in business planning, relationship management skills, marketing and financial acumen.

“Across our network, we do have a high level of mentoring and a culture that allows our advisers to lean on each other for advice on insurance and business-related matters,” he says.

“Our regular professional development days also provide educational opportunities to upskill both our senior staff and our tier 2/3 advisers.”

“If there was more invested in teaching school-age children about the role insurance plays, it may contribute to more people seeking a career in insurance.”

How big insurers are finding the right people

The big insurers have also made changes around securing new talent and advancing staff.

IAG says it “moved quickly to alter our hiring approach”.

“For some roles, we’ve cast our nets wider geographically to include regional centres, and we’ve tailored our approach to specific business needs, such as increased short-term hiring to support critical business functions during busy periods,” a spokesman tells Insurance News.

“We also understood that it was more important for us to demonstrate why IAG is the employer of choice for prospective employees. We regularly review our remuneration to ensure it’s competitive in the current market, and we work hard to cultivate a great workplace that provides an inclusive and vibrant environment for employees.”

In terms of worker advancement, the insurer last year launched its IAG Academy, a “self-paced learning experience available for everyone at IAG… an online hub that provides easy access to development and learning opportunities”.

Rival Suncorp says that, like all Australian employers, it faces a “tight labour market that has intensified the competition for talent. We respond to these conditions through a continued focus and consolidation of our longstanding initiatives aimed at attracting and developing the best talent to support our customers and communities.”

To bring in new talent it has “doubled down on attracting entry-level interns and graduates, looking more creatively at the degrees we are recruiting from and the diversity we are seeking”.

When it comes to moving staff up through the ranks, the insurer recently launched its Reskill Program in partnership with University of NSW. “This allows our employees to acquire new skills, supported by tertiary education, so they can commence a new career and perform a new role that would not have been previously possible,” a spokesperson tells Insurance News.

Hays says the jobs growth seen in 2022 is unsustainable and the market is resetting towards “more manageable levels”, albeit with ongoing skills gaps.

The ‘image’ issue and its causes

Looking longer term, Mr Standfield reckons the sector has an image problem.

“I believe collectively the insurance industry isn’t seen as a viable career, due to the often negative image [of insurance] portrayed in the media,” he says.

“Those in the industry know insurance careers are the best kept ‘secret’ – working in insurance can be very rewarding and provides many opportunities across many varied roles, not to mention the portability to travel around the globe to further your career and experiences in insurance.

“The ultimate objective of insurance is to support the economic continuity of the societies we live and work in; insurance is a key pillar of economic prosperity and this isn’t widely understood.”

His solution is wide-reaching. “A fundamental issue is the lack of financial literacy taught at schools. If there was more invested in teaching school-age children about the role insurance plays, it may contribute to more people seeking a career in insurance.

“As an industry, we could always do more to promote the industry. I believe the National Insurance Brokers Association and ANZIIF have done a good job in this, but a more joined-up approach by all participants in our great industry could reap a collective better outcome for all participants.”