Employee skills – or the lack of them – in general insurance have a direct impact on broker and insurer fortunes, according to the latest Skills Survey from the Chartered Insurance Institute (CII).
The sixth annual survey conducted among CII members and employers, which provides a clear picture of the insurance skills landscape, has revealed the lowest proportion (67% – a drop of 10% on 2011) of companies experiencing skills shortages since the survey began. A comprehensive analysis of the findings is featured in a special supplement in this month’s CII Journal, produced in conjunction with Allianz.
Despite the year-on-year improvement in available skills, nearly three-quarters (73%) of the 2,300 CII respondents who participated in the survey still identified skills gaps in their organisations. And this has a material effect on business performance, with service quality, increased talent expenses and the inability to achieve growth the top three problems when skills are most scarce.
Year-on-year changes to the level of skills shortages vary across the different market disciplines, with the London Market, underwriting and broking seeing an improvement in skills of 16%, 6% and 5% respectively while claims remained stable.
Daniel Pedley, CII public affairs manager, said: “For the first time we delved into the impact of these shortages and found quality and service standards had been detrimentally affected, which offers food for thought.”
Neil Clutterbuck, director underwriting and technical, Allianz Commercial, added: “In a highly competitive market with limited sources of differentiation, Allianz has recognised that having the very best combination of technical, trading and business management skills is critically important to our future business performance and can help set us apart from our competitors.”
Similar to the Allianz view, 42% of the CII’s general insurance members feel the sector should focus its efforts on improving technical skills with soft skills and business competence also rated important by a fifth or more of members. But the fact that only 10% of members believe that attracting new talent should form part of the industry’s focus suggests a greater emphasis on developing the capabilities of existing staff.
Obtaining professional qualifications remains an important part of members’ views on staff development across all levels within a business, with 89% in support. As Neil Clutterbuck of Allianz writes in the Skills Survey supplement, the company has “launched a new scholarship programme for brokers, which enables scholars to achieve their CII Diploma in Insurance in 18 months”.
But members’ opinion of the quality of talent entering the industry is at all-time low since the CII’s Skills Survey began, with only eight per cent thinking the latest entrants are “very well” equipped in terms of basic literacy and numeracy. Consequently, it is unsurprising the proportion of members that consider “education serves financial services well” has fallen from 54% to 49%.
As a result, members’ desire UK education and skills policy to focus on the basics: literacy and numeracy, soft skills and science, technology, engineering and mathematics (STEM) subjects.
But despite members’ reservations about skills levels among industry entrants, there is a question over how much firms are doing to capture the best talent at the earliest stage. This year’s findings show the number of insurance businesses offering internships or work placements has fallen by two per cent year-on-year, while those definitely willing to taking on an apprentice (41%) has remained static since 2011.
Daniel Pedley of the CII says: “The work done by the CII in recent years – namely the Discover Risk activity aimed at attracting a higher calibre of young candidates to insurance – has brought together countless students and industry practitioners. This suggests there is a disconnection between what general insurance firms are trying to achieve by appealing to the best talent and what they are actually achieving in reality.”
Daniel adds: “There is a clear appetite from our members to get involved in the skills debate and, as the world’s largest professional body for insurance, we will continue to make that voice heard. Our survey provides the most extensive insight into employer skills needs within general insurance.”
