Talent quest

Talent quest

‘Falling into insurance’ is no longer enough. Solving skills shortages is a key industry challenge

By Wendy Pugh

Stories about accidentally entering insurance are so common it’s a surprise when someone says it was their top career choice, but the up-to-chance pathway is fuelling a talent shortages problem.

“I have been in Australia for 17 years or thereabouts, and ever since I have been here I have noticed that the insurance industry hasn’t done a great job of bringing in entry-level candidates,” global recruitment company Hays Regional Director Carl Piesse tells Insurance News.

“As a rule of thumb there hasn’t been a big enough focus on bringing in talent that they can train up through the ranks. The method of operation has been very much to hire experienced people from a competitor to do a role.”

When it comes to experienced staff, shortages of claims personnel and compliance staff have come to the fore recently after natural catastrophes and Hayne royal commission recommendations, while workplace changes, cost-cutting, technology, demographics and wage levels have contributed to shortages, according to various views

Hays’ latest insurance report says Australia faces a “massive talent gap” in 2020 as skills shortages afflict financial services. That includes property claims consulting, broking, compliance and underwriting – an area where Mr Piesse says there is typically not a lot of candidates.

“People tend to stay in their roles for a long time as well, so when there is a vacancy there is not a big talent pool that is actively wanting to move,” he says. “So that can be quite challenging.”

Underwriting Agencies Council (UAC) General Manager William Legge agrees finding people who can step straight into a role, or who at the very least understand insurance, is an ongoing issue.

“There have always been more jobs available in insurance than people willing to commit, and that applies across the industry,” he says.

“Insurance is often viewed as a grudge purchase, so it’s hard to attract talent to an industry that needs to develop a better reputation as a go-to career opportunity.”

Underwriting agencies poach from insurance companies, and there is cross-over between brokers, agencies and other industry sectors.

“Some agencies take people with other business skill sets and teach them to adapt those to the insurance industry, depending on the agencies’ specialisations,” Mr Legge says.

An example might be someone with deep understanding of the motor trade who converts those skills into underwriting for a motor specialist agency, and there are many other areas where specialised knowledge provides a valued platform.

Australasian Institute of Chartered Loss Adjusters (AICLA) President Jaye Kumar says entrants usually come into loss adjusting after gaining experience and qualifications from other areas, including engineering, building, law and accounting.

“Few young students say, ‘I want to be a loss adjuster when I graduate’,” he tells Insurance News. “Most of us fall into the profession because someone recommended we give it a go or an opportunity came along. That’s good, because it’s a profession that draws on the experience gained from other areas of work and practice.”

Mr Kumar says strengthening the profession relies on the support of insurers and brokers to only use qualified claims professionals, such as loss adjusters, moving away from the practice by some insurers in recent years to tap builders and tradesmen to assess and settle claims.

That may be warranted for simple, low-value claims, but the long-term effect will be to diminish the future pool of trained claims professionals, and the benefits must be weighed against the consequences.

The profession has also seen the retirement of some experienced practitioners recently, and balancing supply and demand is affected by the impact of large-scale natural disasters that generate surges in claims.

“It is an ongoing challenge to have adequately trained loss adjusters to meet the market needs,” Mr Kumar says. “And to weigh the current demand against having them ready in the future.”

AICLA has worked with the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) to develop the Diploma of Loss Adjusting, and Mr Kumar also advocates more industry involvement in skills development.

A welcome approach would be for insurers to support an industry-based traineeship program, where loss adjusting companies, brokers and insurers work collaboratively in the training of loss adjusters during a period of potentially three to five years.

“In practice, the trainees would be supported to handle low-value and simple claims and become qualified as loss adjusters, leading to the development of skills to service insurers better in the future,” Mr Kumar says.

Outside Australia, AICLA has strong representation in New Zealand and has increased its membership in Asia, where it now totals more than 250.

“The majority of these international members are well qualified, having completed the ANZIIF Diploma of Loss Adjusting and are able to assist in cat events,”

Mr Kumar says. “Allowing qualified and experienced international members to enter Australia on temporary work visas would offer some relief in the short-term to fill this gap in loss adjusting resources at a time when we need it most.”

The focus on formal qualifications and continuous professional training is likely to become more vital following the Hayne royal commission, with claims-handling to become a financial service regulated by the Australian Securities and Investments Commission.

ANZIIF offers courses and training in areas including claims, underwriting, broking, loss adjusting and related areas, and the programs reflect a societal trend toward continuous learning. Studies are usually undertaken by people already in the industry, while the decision to enrol also often marks a conscious career turning point.

“We find that people are in their late 20s to 30s when they begin formal studies, and that is reflecting the fact that they have decided to commit to insurance as a career,” ANZIIF Chief Executive Prue Willsford says.

“The breadth and range of roles that are available in insurance are not that visible in the community, so what happens is people fall into it and then after a couple of years they say, ‘Actually, this is more than a job; I can make a career of this’.”

In a difficult recruitment market, continuing education learning opportunities also offer a retention incentive, both for those appraising future prospects and for people relatively new to the workforce.

“What young people want is a clear career path,” Ms Willsford says. “If as an industry we don’t show those career paths and show that investment in training and skilling, they will take their human capital elsewhere, where that is evident.”

Selling point: ANZIIF’s Prue Willsford says insurance “rebuilds lives”

ANZIIF is also promoting awareness of the sector more widely to students at schools and universities, and has worked with industry on the Careers in Insurance initiative, developing the program after researching general concerns about skills shortages.

Ms Willsford says the “social purpose” element of insurance is a feature that should be highlighted when encouraging people to consider entering the industry.

“We know that working with organisations with a true sense of social purpose is an attractor for employees.

“Insurance in its higher purpose does rebuild lives and does help people, and I think we could tell that story more strongly than we do,” she says. “I also think it is an incredibly hard story to get out.”

The National Insurance Brokers Association (NIBA), one of the supporters of the Careers in Insurance program, has seen positive responses long after delivering talks to a group.

A presentation in 2018 at a careers advisers event by Tim Wedlock, who was NIBA president at that time, and NSW Director Rebecca Wilson, has continued to generate inquiries.

“Even 18 months later we are getting emails about it,” Ms Wilson says. “I have an email from a high school in the Hawkesbury area asking me to come and speak at their careers day at the school. If we can attract young people to come into the profession that is a really great thing.”

Ms Wilson, who is Austbrokers ABS Managing Director, says those already working in the industry are a valuable resource in communicating the many opportunities and benefits it offers.

“It doesn’t have to be over-complicated. While it’s great to participate in careers nights and careers days, it is also about having proud conversations about the work that we do and engaging the interest of family, friends and young people generally.”

Firms will typically tap their own networks, advertise and use a recruiter to find staff. Ms Wilson says Austbrokers ABS will take on people with or without experience, depending on the requirements and the candidates.

“It is a bit of a juggle between the two, but certainly if it is the right person we are willing to train and develop them. If it is an area where we need experience, then we are willing to do what we need to do to recruit those people.”

Besides technical know-how, sought-after attributes mentioned by industry participants include self-motivation, client service skills, enthusiasm, an ability to learn, communication and interpersonal skills, and generally good attitudes and behaviours.

Cameron Watson, the Manager for Insurance and Wealth Management at Fuse Recruitment, says insurance underwriting has seen shortages for some time, with contributing factors including demographics, technological change and the lack of a pathway to develop the required skillset.

“The emergence of technology has certainly enabled business, but it has also created a gap in the capability development of people,” he says.

“We have had some very experienced underwriters move out of the market through natural attrition and retirement, and it has left a big gap in terms of that true underwriting capability. As more of the experienced people have dropped out of the market, the bigger the issue has become.”

“Smaller organisations are not in a position so much to recruit junior people and train them up because they have less resources and they need people to come in and hit the ground running.”

He says employers have every incentive to increase their focus on retaining certain experienced staff, to prevent compounding their problems, contributing to a relatively small number of people looking to make a change in some areas.

“People will move where they are presented with the right opportunity, but we don’t see the market as being particularly active in that sense.

“If we put up an ad on Seek we will get some applications, but if you compare it with other industries they will have more applicants coming through that are relevant to the role.”

Mr Watson says aligned financial services sectors offer a suitable talent pool for some roles, particularly in compliance and risk capabilities, which is a current hotspot for candidate shortages.

“Particularly when it involves regulatory compliance and those things, there is a clearly transferable skillset,” he says.

“Stemming from everything coming out of the royal commission, compliance has become a really significant matter for the large majority of businesses in the market.”

In other more generic areas, insurance is competing with the wider world beyond financial services for capabilities such as digital and IT-related skills, where there is a finite supply of candidates.

Larger organisations are often better placed to take on entry-level staff and train them with experienced members of a team providing support and taking on the more complex matters.

“Smaller organisations are not in a position so much to recruit junior people and train them up because they have less resources and they need people to come in and hit the ground running,” Hays’ Mr Piesse says.

On the other hand, smaller companies may offer more flexibility, and many people appreciate a non-corporate environment that is not bound necessarily by the rigidity that exists in some large organisations.

People seeking to move interstate or from overseas can be a fresh source of talent, including those travelling home after exploring international insurance market opportunities.

“We do get a lot of interest to try and find Aussie returners, tapping into that pool of people who might be working in the UK or Asia who are coming back to Australia and have experience,” Mr Piesse says.

The Hays report says building issues and the recent catastrophe season has put pressure on major insurers to recruit talent that can assist with highly complex, high profile claims, and employers need to consider the salary gap for experienced professionals if they are to secure strong candidates.

In underwriting, as the market becomes more competitive, employers require personnel who can actively meet and develop relationships with brokers who work in their specialty area, it says.

“Technically sound candidates are still available but underwriting agencies very rarely match their salary expectations.”

The report suggests that sometimes linear progression is not the key objective for underwriters, and exposure to a different product line can offer them opportunities to gain wider experience and knowledge that will help their long-term career advancement.

Industry participants say that there are many ways for firms to attract and retain staff, including through the variety of opportunities insurance offers across many roles and the myriad of business sectors it touches.

But making people more aware of the industry in the first place is critical.

Mr Watson says at the graduate level insurance is competing with the brand recognition of firms such as Deloitte and PwC, but workplace opportunities may well be greater in the insurance arena. Fuse has introduced a specialist graduate program in conjunction with clients.

“You can line up any university degree against a role in insurance,” he says.

“The breadth we have in insurance is amazing in terms of roles.

“We keep saying that people ‘fall into’ insurance. I dislike that term now, because we should have people wanting to join insurance as a career, because it is an amazing industry.”