eFinancialCareers

As any young trader driving a fast car with an ornamental (and probably female) passenger will tell you, investment banking is seen as a sexy industry to work in. Unfortunately, the same cannot be said of insurance.

The discrepancy is causing a degree of consternation in the usually low-key community around Lime Street, the hub of the London reinsurance market, where it’s felt that insurers’ lack of allure is behind something of a recruitment crisis.

“Let’s be frank,” says David Gittings, head of group risk for Wellington Underwriting plc. “Investment banking is regarded as sexy career and insurance just isn’t.”

The extent to which insurance is a turn-off was underlined by research undertaken last year at Cass Business School by the Chartered Institute of Insurers (CII). It found that 90% of students said they wouldn’t consider insurance as a career and the industry was seen as intellectually unstimulating.

“Insurance has done a very poor job in marketing itself,” reflects Steve Wellard, director of communications at the CII. “There is a diminishing pool of talent coming into the industry.”

There’s little dispute that something needs to be done, and not only at entry level. Wellard says other research shows that 75% of recruiters say insurance jobs are hard to fill. Recent research by Joslin Rowe, a city recruitment company, revealed that the ratio of applicants to jobs was lowest in insurance than any other financial services sector, at only 0.66:1.

Banking and Bermuda are a drain

Lucy Bousfield, a senior consultant in Joslin Rowe’s insurance group, says the industry is suffering from a shortage of specialist underwriters, as well compliance staff and internal auditors. Insurers’ demand for newly qualified accountants is said to be particularly rapacious. Unfortunately, Bousfield says many newly quals have other plans: “Candidates from the big four are in high demand at insurers. But most would prefer to go into investment banking.”

David Cooper, director and co-founder of Mansion House Executive, an insurance-focused search firm, says the upturn in investment banking has served to discourage people from building careers in the industry, and that the outcome is a shortage of good relationship management and sales professionals to work at a senior level in the reinsurance market.

Both Gittings and Cooper say matters are being made worse by the decision of insurers like Hiscox and Amlin to open new offices in sunny (and sexy) Bermuda. “A lot of capital is going to Bermuda,” says Gittings. “The industry there is more lightly regulated, making it quicker and easier to set up. One of the dangers is that people will increasingly be attracted to go and work in Bermuda in future.”

Insurance is sexy (really)

So what can be done? As chairman of the Lloyds Market Association Professional Standard Committee, Gittings is working on an initiative to raise the profile of the Lloyds market to university students: “A lot of undergraduates associate insurance with houses, cars and life insurance. They don’t appreciate that the Lloyds market isn’t like that at all – it’s about big ticket international risks that are catastrophic in nature, like hurricanes and the World Trade Center.”

The CII has a separate initiative to raise insurers’ sexiness quotient via a new marketing campaign and careers portal. It is also keen to talk about the money on offer in the industry. “There are some good high earners in the insurance market,” says Wellard. “Both underwriting and broking can be very lucrative.”

Cooper and Bousfield confirm this to be the case. “We work on plenty of roles paying between £100,000 and £200,000,” says Cooper. “There’s a disparity between what can be earned working in the London reinsurance market and what can be earned selling motor insurance in Kent.”

Bousfield says newly qualified accountants can earn salaries of £45k-£55k in insurers, plus a 10% to 20% bonus, which she says is on a par with banking.

For any remaining doubters, Simon Hearn, head of the European financial services division at prestigious search firm Russell Reynolds, points to the flow of senior staff from investment banking into insurance. “Bruce Carnegie Brown, chief executive officer of Marsh, was previously head of European and Asian debt capital markets at JP Morgan. And Lord Levene, chairman of Lloyds, was a previous vice chairman at Deutsche Bank.”

Banking may be initially alluring, but after years in the fast lane, Hearn says insurance also has its appeal. “People get bored of banking they’ve been there and done it. Insurance is something different.”