The knock-on effect is greater competition for employers to attract and retain - and pay - qualified staff.
Garry Medland, principal consultant at search firm Derwent Executive, says that during the past few years, and in particular 2003/04, he saw a jump in salaries in the vicinity of 20%.
Within the general insurance industry, the areas that have seen the greatest demand for staff (particularly at lower levels) have been broking (account executives and account brokers) and underwriting, where there is a range of roles in demand: commercial underwriters, corporate underwriters and specialty underwriters, such as financial risks and liability.
This candidate shortage has seen domestic insurance companies look for talent offshore. Recently, Medland has brought back expatriates from Asia and the US to fill roles and has also selected candidates from Europe, such as the Netherlands and the UK.
"Interestingly, there used to be a stigma attached to hiring people from another market but these days it has become increasingly common," says Medland.
Show me the money
Medland say that commercial underwriters can earn anywhere from the low A$40,000s while specialist underwriters - such as an experienced financial risks underwriter - could earn in excess of A$100,000.
"What has become most apparent though is that there are definite talent shortages in the highly technical roles such as portfolio underwriters or product managers, who are capable of driving a P&L," says Medland.
"Salaries in these areas typically start at A$150,000 or the low A$200,000s. Simply put, it is a market in demand for talent within insurance and a good operator is able to command a strong salary."