Are apprenticeships the solution or a costly burden?

Like many other industries, insurance finds itself in the middle of a war for talent.

For example, research by insurer Ecclesiastical published in January 2025 found that the majority of brokers have revealed that recruiting young talent is a challenge for their business.

It found that 66% of those surveyed said there were a lack of applicants for jobs, while 51% believed young people do not have the experience needed for roles in the sector.

This came after Aviva’s 2022 Broker Barometer, which surveyed of 220 brokers across the UK, showed that 53% of respondents had a vacancy open for four months or more.

Compounding the issue is the reputation of the insurance sector as an unattractive place to work – in the Insurance Times Talent Development Report 2024, created in partnership with RSA, 80% of 240 surveyed brokers said that industry reputation and attractiveness were the main barrier to attracting talent.

A potential solution

Overcoming these challenges in a way that would make the sector more attractive to younger professionals is challenging – but apprenticeships have become one potential solution.

Apprenticeships, which are a way for employees to earn while being trained and educated, have become a focal point for the industry with the UK government’s apprenticeships levy coming into effect in 2017.

The levy is a form of taxation paid by employers that is designed to help businesses offer more training and apprenticeship programmes through the form of a fund.

Speaking exclusively to Insurance Times, Chelsea Laundon, learning and development lead at Allianz UK, said: “It is hopefully a fast-disappearing perception, but the idea that apprentices are school leavers who make the tea is woefully out of date.

“Apprenticeships are genuine jobs with structured training lasting a minimum of 12 months that lead to professional qualifications.

“Apprenticeships can support lifelong learning, train emerging talent and attract external talent to the business.”

Positive signs

Governmentally, there are positive signs around support for apprenticeships too. The 2024 Autumn Budget reinforced government backing for apprenticeships, with Labour pledging to raise the apprentice minimum wage and introduce targeted industry flexibilities, including shorter programme durations.

These reforms aim to make apprenticeships a more viable route for employers and young professionals alike.

The benefits are already being felt. Ofsted’s annual 2024 report, published in December 2024, confirmed that apprenticeship quality is at an all-time high, highlighting the role structured training plays in developing skilled insurance professionals.

But, following concerns raised by professional services and technology firm Davies, it has become clear that many insurance companies are struggling to fully leverage apprenticeship schemes.

A survey released by Davies on 14 January 2025 revealed some worrying statistics. It found that 11% of insurance businesses are unsure how to implement an apprenticeship programme, while 19% do not recognise the value of running one.

Costly burden

Not all industry commentators agree that apprenticeships are the solution to the question of attracting talent, however.

Speaking exclusively to Insurance Times, Samantha Lydon, managing director at Empower Development, explained that companies are required to pay into a levy fund for apprenticeships, which operates on a “use it or lose it” basis.

For example, if an employee wants to personally complete a qualification at Chartered Insurance Institute (CII), it could be completed in four to six months at a cost of a few hundred pounds.

However, if the company used the apprenticeship route, the cost rises to around £8,000, even though the levy fund covers it so that it doesn’t impact the company’s profit and loss (P&L) statement directly.

Essentially, companies are spending money they would lose otherwise, on development.

However, the apprenticeship route involves more time for both the individual and their manager. As one expert puts it, “you might look at that money, the few hundred pounds that you’ve saved and as a cost exercise realise it’s not worthwhile”.

Echoing Lydon’s sentiments, Fran Burgess, chief executive at Zing365, pointed out that funding for insurance standards hasn’t increased in years and it’s not adequate to deliver quality education to learners, employers or trainers at the desired level.

She explained that the apprenticeship framework is overly focused on the end-point assessment and, if a learner drops out, the provider doesn’t receive full funding, which creates an imbalance. 

Burgess expressed hope that new reforms would offer greater flexibility and scope. She said she believed that the current framework was “too rigid” and that the funding could be suitable if there was more flexibility.

Ultimately, she noted that while the concept of apprenticeships is solid, the current delivery system is failing and needs reform.