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

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]