Recruiting Trends

Targeting Talent

To fill a technical talent gap, specialty operators must convince the next generation — and talent from outside the industry — of the appeal of writing non-standard insurance.
By: | October 15, 2016 • 5 min read

Faced with an aging workforce, operators in the specialty, target/managing general agent (MGA) and wholesaler spheres face an ongoing battle to attract and retain technical underwriting and actuarial talent to meet the demand for niche insurance solutions.

Making matters more pressing is that not just any talent will do.

“Only the best and brightest can tackle complex risks. To have a true specialty focus, you need deep talent and expertise,” said Pat Donnelly, president and deputy CEO of JLT Specialty USA.

“The competition to attract and retain specialist talent is real and a challenge throughout the industry,” said Donnelly, who noted that specialty lines continue to grow as a percentage of all insurance premiums when compared to standard lines.

Earlier this year, a survey by London Market Group (LMG) and Deloitte of the London insurance market — a renowned hub for MGA expertise ­— identified skill gaps in operations, wordings, underwriting and claims that respondents felt could threaten performance in the long term.

Technology is also contributing to the issue, according to LMG. Indeed, the technical talent pool is being stretched both by competition from outside the insurance sector and the increasing movement of talent within it.

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“The days when a majority of workers could expect to spend a career moving up the ladder at one company are over,” LMG and Deloitte stated in the report.

“Young people anticipate working for many employers and demand an enriching experience at every stage of their working life, leading to expectations for rapid career progression, as well as a compelling and flexible workplace.”

Bernie Heinze, executive director of the American Association of Managing General Agents, is seeing the same pattern emerging in the U.S.

“The concept of loyalty to one’s employer has gone out of vogue — if you want loyalty, you’re better off getting a dog,” he said.

“We live in an ADHD world. The current mind-set is to maximize one’s talents to the greatest of one’s capabilities. If talent see an opportunity to do so they take advantage, and are more likely to move project to project, or title to title, than to stay in one place.”

Consolidation, as well as fundamental changes in strategy — with many underwriting and brokerage firms choosing to leverage scale and efficiency over expertise and specialization — have also increased movement between companies.

“These strategies and initiatives might be advisable, even necessary, in certain circumstances. But they have without question had an impact on talent dislocation in recent years,” Donnelly said.

Pat Donnelly, president and deputy CEO, JLT Specialty USA

Pat Donnelly, president and deputy CEO, JLT Specialty USA

MGAs and wholesalers face competition for talent not just from competing outfits and new entrants in the specialty space, but also the standard insurance markets, which are increasingly seeking to establish specialty arms to boost their ailing profit margins and increase product diversity.

“[Standard markets] that recognize that clients don’t think in terms of insurance products, but rather in terms of risk and loss scenarios — and adapt their approach and offerings accordingly — will be more relevant to clients. This, in turn, will make them more attractive to good talent,” he said.

“We’re beginning to see fierce competition for actuaries, data science roles, [and] information technology in addition to competition for specialty underwriting, claims and brokerage talent.”

“Only the best and brightest can tackle complex risks. To have a true specialty focus, you need deep talent and expertise.” — Pat Donnelly, president and deputy CEO, JLT Specialty USA

However, with many mainstream insurers cutting staff following expense reviews, it’s not all one-way traffic, noted Peter Staddon, managing director of the UK’s Managing General Agents Association.

“The nature of many MGA businesses is to develop a more efficient and cost-effective way of providing niche insurance products compared to mainstream insurers. This can be very attractive to underwriters looking to take more control of their business.”

According to Staddon, the cost of technical talent will likely rise, though he believes this will correct itself over time as sectors such as cyber and emerging technology expand, increasing supply.

Yet with retaining talent “vital” to success, “providing equity, additional employee benefits, skills development opportunities and support with professional education all have a role to play” in helping firms keep hold of valued technical staff, he said.

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“Ensuring employees are appropriately recognized for what they bring to the party, and that they are able to engage within the management process or growth of that business, is important in the MGA business,” Staddon said.

Donnelly added that creating a desirable workplace “culture,” offering staff performance rewards, career path clarity and flexible working arrangements can all help firms retain valued talent.

Tackling Dynamic Risks

Heinze believes that the insurance industry has historically done a poor job of selling itself as a career path, but that the specialty space has a unique opportunity to appeal to new talent by offering the opportunity to “fashion interesting, dynamic, bespoke insurance products,” compared to the relatively vanilla standard markets.

“This may be difficult to hear, but the insurance industry is tremendously exciting,” he said.

“When we talk to students, we say the E&S of excess and surplus also stands for ‘exciting and sexy’.”

The opportunity to tackle risks, from cyber fraud to power grid outages due to emissions of gamma rays from the sun, is what gets young professionals excited, Heinze said.

Bernie Heinze, executive director, American Association of Managing General Agents

Bernie Heinze, executive director, American Association of Managing General Agents

“They can have a hand in creating insurance solutions that will fundamentally transform the way in which the old, antiquated insurance model has existed. The promises of the insurance and technological abilities of the future are untold.”

With millennials set to account for around three-quarters of the workforce by 2025, Staddon is optimistic that there is a strong pipeline of technologically savvy talent waiting.

“We are seeing many young people come into the insurance industry from an array of educational and social backgrounds,” he said.

The U.S. has seen an uptick in educational programs in a bid to tackle the talent shortage. The AAMGA has, for example, developed a 40-hour program that allows risk management undergraduates to add an underwriting certificate to their degrees, equipping them with basic underwriting knowledge and reducing the learning curve upon entering the workplace.

But if it is to truly solve the problem, the insurance sector must look beyond its borders. According to Donnelly, JLT has employed 200 people in the last two years from 30 firms, half of which are outside the insurance industry.

“The good news is that we work in a vibrant, challenging, complex industry that is attractive to a large pool of potential employees. The bad news is that competition for that talent will only intensify — both within and outside the industry.” &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

The Profession

For This Pharmaceutical Risk Director, Managing Risk Means Being Part of the Mission to Save Lives

Meet Eric Dobkin, director, insurance and risk management, for Merck & Co. Inc.
By: | September 28, 2018 • 5 min read

R&I: What was your first job?
My first job out of undergrad was as an actuarial trainee at Chubb.I was a math major in school, and I think the options for a math major coming out are either a teacher or an actuary, right? Anyway, I was really happy when the opportunity at Chubb presented itself. Fantastic company. I learned a lot there.

R&I: How did you come to work in risk management?
After I went back to get my MBA, I decided I wanted to work in corporate finance. When I was interviewing, one of the opportunities was with Merck. I really liked their mission, and things worked out. Given my background, they thought a good starting job would be in Merck’s risk management group. I started there, rotated through other areas within Merck finance but ultimately came back to the Insurance & Risk Management group. I guess I’m just one of those people who enjoy this type of work.

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R&I: What is risk management doing right?
I think the community is doing a good job of promoting education, sharing ideas and advancing knowledge. Opportunities like this help make us all better business partners. We can take these ideas and translate them into actionable solutions to help our companies.

R&I: What could the risk management community be doing a better job of?
I think we have made good advancements in articulating the value proposition of investing in risk management, but much more can be done. Sometimes there is such a focus on delivering immediate value, such as cost savings, that risk management does not get appropriate attention (until something happens). We need to develop better tools that can reinforce that risk management is value-creating and good for operational efficiency, customers and shareholders.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?
I’d actually say there hasn’t been as much change as I would have hoped. I think the industry speaks about innovation more often than it does it. To be fair, at Merck we do have key partners that are innovators, but some in the industry are less enthusiastic to consider new approaches. I think there is a real need to find new and relevant solutions for large, complex risks.

R&I: What emerging commercial risk most concerns you?
Cyber risk. While it’s not emerging anymore, it’s evolving, dynamic and deserves the attention it gets. Merck was an early adopter of risk transfer solutions for cyber risk, and we continue to see insurance as an important component of the overall cyber risk management framework. From my perspective, this risk, more than any other, demands continuous forward-thinking to ensure we evolve solutions.

R&I: What’s the biggest challenge you’ve faced in your career?
Sticking with the cyber theme, I’d say navigating through a cyber incident is right up there. In June 2017, Merck experienced a network cyber attack that led to a disruption of its worldwide operations, including manufacturing, research and sales. It was a very challenging environment. And managing the insurance claim that resulted has been extremely complex. But at the same time, I have learned a tremendous amount in terms of how to think about the risk, enterprise resiliency and how to manage through a cyber incident.

R&I: What advice might you give to students or other aspiring risk managers?
Have strong intellectual curiosity. Always be willing to listen and learn. Ask “why?” We deal with a lot of ambiguity in our business, and the more you seek to understand, the better you will be able to apply those learnings toward developing solutions that meet the evolving risk landscape and needs of the business.

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R&I: What role does technology play in your company’s approach to risk management?
We’re continuing to look for ways to apply technology. For example, being able to extract and leverage data that resides in our systems to evaluate risk, drive efficiencies and make things like property-value reporting easier. We’re also looking to utilize data visualization tools to help gain insights into our risks.

R&I: What are your goals for the next five to 10 years of your career?
I think, at this time, I would like to continue to learn and grow in the type of work I do and broaden my scope of responsibilities. There are many opportunities to deliver value. I want to continue to focus on becoming a stronger business partner and help enable growth.

R&I: What is your favorite book or movie?
I’d say right now Star Wars is top on my list. It has been magical re-watching and re-living the series I watched as a kid through the eyes of my children.

R&I: What is the riskiest activity you ever engaged in? When I was about 15, I went to a New York Rangers versus Philadelphia Flyers game at the Philadelphia Spectrum. I wore my Rangers jersey. I would not do that again.

Eric Dobkin, director, insurance & risk management, Merck & Co. Inc

R&I: What is it about this work you find most fulfilling or rewarding?
I am passionate about Merck’s mission of saving and improving lives. “Inventing for Life” is Merck’s tagline. It’s funny, but most people don’t associate “inventing” with medicine. But Merck has been inventing medicines and vaccines for many of the world’s most challenging diseases for a long time. It’s amazing to think the products we make can help people fight terrible diseases like cancer. Whatever little bit I can do to help advance that mission is very fulfilling and rewarding.

R&I: What do your friends and family think you do?
Ha! My kids think I make medicine. I guess they think that because I work for Merck. I suppose if even in a small way I can contribute to Merck’s mission of saving and improving lives, I am good with that. &




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]