Talent shortage

Talented mariners required!

The pandemic has left the marine industry facing a new talent shortage gap. Michael Burle, Head of Marine Division at Liberty Specialty Markets, discusses the reasons why and what the industry needs to do now to solve the problem

Historian David Abulafia in his widely praised book The Boundless Sea: A Human History of the Oceans traces the skills and techniques developed across generations to traverse the seas. As cargos grew bulkier and trade routes extended, a specialist, highly skilled group of mariners, navigators and captains emerged that enabled this marine based ecosystem to evolve.

It is true to say that, in some areas of marine navigation, there is no replacement for human skill. Experienced pilots are still required to guide large container vessels through tight canals and into narrow booths at ports around the world, which form the backbone of global trade routes.

Despite advances in modelling and expanded technological capabilities, an underwriter’s instinct and experience in risk selection can still be the deciding factor when assessing a risk and setting premiums.

These skills are needed right across the myriad of industries that support the marine sector. Underwriters, brokers, shipowners, loss adjusters, risk managers, lawyers, pilots: all competing for the same fresh pool of talent we are all currently struggling to attract.

TALENT PIPELINE

Historically, careers in the broader marine sector were described as having started “by accident”. Whether it was through a family connection, the need for an income, or an opportunity too good to miss, there was no need to make the sector more attractive, as the pipeline of talent was firm and stable.

Things have changed and the marine industry is currently struggling to find people across the board, not just in insurance-based roles, but stevedores and pilots and the like. The lack of talent joining the industry is a concern and we need to find a way to fix that.

The pandemic drove many people to rethink their career choices with some choosing to retire earlier than expected.

The marine sector has spent the last 15 years concentrating on improving its market performance and profitability. I think this is where the industry has taken its eye off the ball. We are now paying the price for our lack of investment in attracting and developing talent and building the future talent pipeline.

To add to the mix the marine sector suffers from the same problem as the insurance industry as a whole: it is not a first choice, destination career option for many young people starting their career.

Right now, there are more people over 50 than under 30 in the insurance industry. This problem is exacerbated by mid-level and junior talent being lured away by offers from industries outside of insurance, as the skillsets are transferable. This can make marine a less appealing sector to work in for young talent and could impact the approach we take to career development and societal action.

To address the talent pipeline problem, marine and speciality insurance need to become a destination career alongside other financial services businesses.

I was pleased to see the London Market Group (LMG) support this idea too. The LMG recognises that the London market needs to retain intellectual and financial capital to be the place where risk transfer issues are most likely to be solved. Its recent campaign is designed to encourage a flow of young talent (aged 18-24) into the market.

MULTIFACETED ROLE

In my 30 years in the marine insurance sector, it has been completely transformed.

The nature of the risk has changed. The exposures have changed. The makeup of departments has changed.

Where once an underwriter’s instinct and their personal relationships created value in the market, we now have teams of analysts, modellers, actuaries and portfolio managers working to increase profitability.

Job roles in the industry are varied, require multiple (and often overlapping) skills and teams require complementary and diverse people to function properly.

Technology is gradually transforming the sector. From blockchain-enabled underwriting initiatives that allow granular and detailed parsing of risk, to ever more efficient and effective portfolio management, we need teams of IT-enabled leaders to make the most of the opportunity. Not to mention the cybersecurity experts needed to counter any challenge arising from the continuing digitisation of the process.

That is why we need fresh talent. But the question is how do we attract and retain them?

BUILDING SOCIETAL GOOD

Much has been written about how Generation Z and Millennials are keen to challenge the status quo, as well as how they will look at a prospective employers’ ESG and CSR commitments to see if there is a good fit which supports their values and beliefs. I believe marine insurance has been a force for good for decades; now it is time for us to shout about it.

We work with our partners and industry organisations such as the International Union of Marine Insurance (IUMI), on a range of issues.

One recent example is the vital work to improve crew welfare. During the pandemic, crews were stranded on vessels. Right across the sector, the industry worked hard to support plans to extract and repatriate sailors. We are collaborating to enforce standards on the transport of hazardous goods, to prevent environmental catastrophes.

There is room for fresh thinking and initiatives which would be welcomed across the industry. There is work on lowering vessel emissions, finessing regulations around ports of refuge, enforcing sanctions regimes against global tyrannies. We are a force for good and we should not be afraid to tell our story.

CLOSING ARGUMENTS

This is just an outline of what a proper case for the marine sector, and marine insurance in particular, could look like.

More work is required. We need to benchmark our salary and benefits packages with other industries to ensure we are competitive.

We need to raise awareness that the marine sector is an attractive, varied and exciting place to work, with great career progression opportunities.

In addition, we need to remove the invisible barriers such as a lack of insurance experience, which is not an issue to applying for a role. Plus, we can showcase how we are building societal good.

In the competitive post-pandemic marketplace in which we operate, we must make a strong case to attract the young talent that we need. This will allow the sector to maintain its current success while creating an environment in which employees can thrive.