The talent gap is one of the most pressing concerns facing our market. With many of our most experienced practitioners heading for retirement, the London Market urgently needs to find ways to attract and retain young talent, with a broad base of skills.
About half of people working in the London Market are aged over 40, while some 26% of workers in the UK insurance market are aged over 50. These people are experienced and talented - but they won’t be working forever. For example, research has shown that about 10% of London Market property risk engineers are due to retire in the next couple of years. It’s clear that we need to find ways to attract, retain and incentivise young, diverse talent in the 25 to 40-year-old age bracket.
Addressing this talent gap is a priority for the whole market. In 2019 - even before the pandemic and the so-called ‘great resignation’ - a London Market Group report identified a looming skills shortage as a potential ‘tipping point’ for the market, putting it at risk of losing its pre-eminence as a hub for intellectual and financial capital. Since then, the COVID-19 pandemic prompted many people to rethink their careers and work-life balances, and we have all seen swathes of people changing jobs.
Against this backdrop, salary inflation has meant that many employees are being lured away to new roles after the hiring freezes imposed by many companies during the pandemic were lifted.
There’s a war for talent. Not only have salary expectations skyrocketed, but many young employees are looking for faster career progression - often meaning that they are taking on more and more senior roles with little experience and switching roles within fairly short periods of time.
This all adds up to a potential bubble in about 18 months to 2 years’ time. We will have too many highly paid people, used to rapid promotions and pay rises, but not enough senior roles for them to go into. It’s clear that this represents a problem for the London Market as a whole, but what can we do about it?
Attracting and retaining the next generation
Our industry has historically hidden its light under a bushel. We haven’t been very good at demonstrating the social value of insurance and the very vital role it plays in the UK economy and in addressing some of the most pressing global issues like climate change, technological advancements and the energy transition, for example.
We need to get better at this - and fast. While the London Market is making strides to show young people the attractiveness of a career in insurance, we all need to continue to find ways to illustrate how rewarding and meaningful working in insurance can be.
Insurance has exciting career paths for people with all sorts of backgrounds, interests and skills, whether that be engineering, economics, data science, fine art or private investigation - and so much more.
The market also needs to better articulate to young talent that a university degree is not the only route into insurance; far from it. There’s been a lot of work done across the market to set up apprenticeship schemes and create links with schools and colleges. We all need to keep up this work, to cast our nets wider than universities and to look at other industries for the people with the skills and gifts our market will need now and in the future.
And we will not win the war for talent on salaries alone - it’s unsustainable and self-defeating. We need to attract young people from diverse backgrounds with varied skill sets - and then retain them by focusing on development and opportunity. We need to ask how we can give our colleagues a broader career experience, with opportunities to branch out, grow and develop new skills across different disciplines.
Our market doesn’t only need people with technical skills. We need people with soft skills too. Insurance is, and always will be, first and foremost a people business. We need to allow our colleagues to develop those skills too. As the industry shifts to see more administrative tasks fulfilled by technology like artificial intelligence, these value-added areas of people skills will become even more crucial.
If we can address this talent challenge, better articulate the opportunities a career in insurance can bring, and make ourselves more attractive to people from all sorts of backgrounds, with diverse skill sets and curious minds, then we can build an insurance marketplace fit for the future.