In Focus: Brokers ‘frustrated’ at lack of skills despite raising wages for appointees

As insurance salaries continue to rise, there are employers within the broking sector becoming “frustrated” that some new hires they bring onboard do not live up to the standard expected from them.

That was according to Crescens George, chief executive of training provider Wiser Academy, who told Insurance Times that as wages are driven up, “we are not getting any better, competent people”.

George’s comments came after figures released by job site Reed in January 2024 showed that insurance salaries rose faster than the rate of inflation during 2023.

This data showed that there was a 4.7% rise in advertised insurance salaries across the year – higher than the 4% UK inflation figure measured by the Office for National Statistics over the same period.

This noted salary increase followed findings from insurer Aviva, published in April 2022. Its 2022 Broker Barometer research, based on a survey of 220 brokers across the UK, showed that 53% of respondents had a vacancy open for four months or more.

George said he was currently seeing some vacancies in the industry that require more experience staying open for around four to five months – something he noted was a “really big problem” and had been contributing to the job market being skewed in terms of wages as firms look to fill roles.

“People don’t realise that we are actually eating ourselves,” he added.

“I take from you, you take from somebody else – you are just rotating talent.

“And, in that process, we are skewing the job market in terms of driving up wages.

“What’s happening is, because we are eating ourselves, we are driving up wages and we’re not getting any better, competent people.

“So, it’s a candidate driven market [rather] than an employer driven market.”

Broker frustration

In terms of brokers, George noticed this recruitment situation occurring when they try to bring in people to sell insurance and attract new business.

“Some are being poached for a 30% to 40% salary increase,” he said.

“So, they move from one broker to the other on a really high salary, but not necessarily complementing that with the skills and competence that kind of wage demands.

“And the employer, the broker principal, the chief executive or the directors, they get absolutely frustrated.”

Richard Beaven, managing director of broker Academy Insurance, added that increasing pay was key in order to entice talent, but he felt that it can be tough for the sector to find “good people” – for example, he is cautious about those who promise lots of new business if they join.

“We now regularly benchmark all of our folks against both insurance and non-insurance jobs to make sure that we are being competitive,” he said.

“Yes [salaries] are rising, yes it is harder to find good people. And, in part, I agree that you do find there are people who are on the market with high expectations that don’t deliver.

“But I think the key is that people coming from one insurance business to another, particularly if they have managed customers, come and say ‘I’ll bring customers with me and I’ll do this and that, but I want you to pay me a lot of money’.

“My experience of this is that very rarely do the promises of ‘I can bring lots of new business’ deliver and I’m very cautious about paying someone who tells us that they are going to bring a whole load of customers.”

Young talent

George felt that part of the problem regarding the skills gap was that “old school tricks was not going to cut it in this very present time”.

Since the Covid-19 pandemic, many technological trends have emerged and escalated in the industry. This includes artificial intelligence (AI), with large language models such as ChatGPT piquing the interest of many market participants.

The use of social media has also been on the rise to promote products.

“Some [people] are still stuck in the old school calling methods, going by yellow pages and for face-to-face, pure traditional networking, when you can [instead] deploy modern techniques to make the customer pick up the phone to call you,” George said.

As the insurance industry becomes more modernised and technology heavy, brokers have the choice to bring in more young talent that is keen on these types of technology advances, offering to train them up.

However, attracting talent to the insurance sector has been a worry for businesses, with what seems like the majority of insurance professionals acknowledging that they fell into their current careers, rather than choosing to pursue roles in the industry.

Emphasising this perspective, a survey by the Chartered Insurance Institute conducted in April 2023 revealed that 60% of young talent found the insurance industry “boring” and only 30% would consider it as a career.

These findings were based on a survey of 50 participants between the ages of 14 and 22.

“Somehow we need to change that narrative, so that people see when they are coming out of universities that insurance is a great career,” said Martyn Mathews, managing director of SSP Broker.

“People think of big data and all they think about is Google or Amazon, but actually the insurance industry is wholly reliant on data and I have exciting use cases. AI brings that to life as well.

“So, it is an education piece starting right at the beginning, so that people get excited about insurance.”

George felt that insurers were on the right path to do this – he had seen lots of campaigns from them to attract new talent.

But when it comes to the broking side, while there were some “really forward thinking brokers”, he felt there were more small to mid-sized ones “still on a very slow pace of embracing fresh early careers”.

George continued: “For those who are not yet embracing, [they] are still at that old school mentality.

“Some brokers are not open to change, they don’t want to experiment.”

Mentality shift?

However, Beaven felt that while this situation has been the case in the past, brokers’ mentality around hiring young talent was starting to change as the job market becomes more competitive.

“Any broker of scale now would be running an apprentice programme,” he said.

He highlighted Premierline as an example of doing this – a broker which Academy recently acquired in March 2024.

The firm employs nearly 90 staff and deals with clients ranging from micro and SMEs to large corporates.

“[It has] multiple people who are on apprenticeships and learning their craft to become fully fledged brokers,” Beaven said.

“And indeed at Academy, we think there is an active role to play for apprenticeships.”