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Clients' growing interest in cyber insurance has prompted brokers to increase their staffs, but employees with experience in the relatively new field are in short supply.
That has prompted brokers to hire from a variety of sources, including cyber security, information technology and law firms. They also are pairing experienced brokers with new hires.
“We have a team of 40 across the U.S.,” with hubs in New York, San Francisco and Chicago, said Christian Hoffman, New York-based managing director of Aon Risk Solutions' financial services group. As demand has increased, “I would say we've doubled over the last couple of years.”
“Our company is certainly adding staffing” to its cyber liability practice, said Adam Cottini, New York-based managing director of the cyber liability practice and area senior vice president at Arthur J. Gallagher & Co. “We are augmenting in various regions, adding to existing cyber centers of excellence; and then in some areas, we're actually adding new cyber centers of excellence.”
“With the market growing at 30% a year, we need resources as brokers to support that growth,” said Ben Beeson, cyber risk practice leader at Lockton Cos. L.L.C. in Washington. The brokerage needs to “find more bodies to make that happen and support ... our clients who may have not been buying cyber insurance and are starting to buy it.”
Shannon Groeber, Philadelphia-based senior vice president of the cyber and errors and omissions practice at JLT Specialty USA, said the broker expanded into the U.S. in August 2014 and one month later introduced a six-person cyber team, most of whom had more than 10 years of cyber-related experience.
It was a strategic decision to take this approach rather than “bringing in a couple of individuals and trying to grow over time,” Ms. Groeber said.
The relative newness of cyber insurance means the supply of experienced brokerage candidates is limited.
People with just two years of cyber-related experience “are in such demand they can negotiate higher salaries and higher positions” than their actual skills support, Ms. Groeber said.
“There is a shortage of cyber aptitude in the brokerage community, so we have been teaching employees that are coming from the underwriting side at times,” said Mr. Cottini. Candidates also need to have a certain level of “client-focus aptitude,” and new hires must have cyber experience, he added.
Lockton has hired additional underwriters as well as training recent college graduates, Mr. Beeson said. Lockton also is hiring from information technology and law firms, who then can “adapt to the insurance world,” he said.
“We've done experienced hires from another broker, and we've done some entry-level hires to sort of grow our own talent,” said Lauri Floresca, San Francisco-based senior vice president at Woodruff-Sawyer & Co.
“The market is really competitive for people who have experience, and there's a real challenge” to hire people who also are a great match from a personality perspective, Ms. Floresca said.
“It's a selective process, and it's not something we enter into lightly, because we want to make sure we hire the right person who brings a certain skill set or value we either don't have or one we want to expand upon,” said Brian Dunphy, senior managing director of the management and professional risk group at Crystal & Company in New York.
Private equity-backed buyers again dominated the insurance brokerage merger and acquisition landscape during the first half of 2016, but their share declined slightly amid increased activity by privately held and bank-owned brokers.