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LONDON — Demographic upheaval and changes in digital technology are having a profound effect on talent in the London insurance market, according to a survey published Monday.
The London Market Group, which represents insurers, reinsurers and brokers across the Lloyd's of London and London company insurance market, said it would begin to address these challenges through a program of education and apprenticeships, among other measures.
According to the survey, a skills gap is developing in certain areas as the workforce ages and as new “disruptive” technologies emerge, and the London market firms must work together to attract millennials to insurance careers, according to LMG representatives.
The market needs to ensure that it is attracting “a breadth of talent across gender, ethnicity and social backgrounds,” said Bob Stuchbery, London-based president for international operations at The Hanover Insurance Group Inc. and LMG board sponsor for the talent and diversity workstream, at a briefing in London on Monday.
Respondents to the study, “Talent in the London Market, Unique Advantage,” which was carried out by Deloitte L.L.P., were asked to cite causes of future leadership skills gaps.
More than half — 27% — of those who cited reasons for future skills gaps said there were few people with the necessary skills in the London market; 25% cited poor succession planning; 16% pointed to an aging talent pool; 9% said other businesses pay more; 6% said roles are perceived as unattractive; and 5% said skills were available in other industries but the London market could not attract them.
Respondents were also asked the methods by which their organizations develop future leaders.
Almost half — 43% — of respondents said their organizations carry out training; 20% cited coaching; 16% said their organizations had a development program; 11% cited challenging roles; 7% use secondment, or assignments to temporary duty; 6% talent identification; 4% personalized development; and 3% internal protocols.
Many of those surveyed identified digital and technological change as the most important influence on the talent needs of the London market.
More than half — 60% — cited digital and technological change as an important influence; 40% cited new competitors; 33% excess capital; 32% growth in new markets; and 28% outsourcing.
Respondents were asked to identify the areas in which skills gaps, if left unmanaged, would affect business performance in the longer terms.
One quarter, 25%, said there were such skills gaps in operations areas; 24% in wordings; 23% in underwriting; 23% in claims; and 22% in leadership capability.
Just 7% of respondents said that seeking talent outside of the London market was a priority for their organization.
The London market needs to become attractive to millennials — those born between 1980 and 2000 — in order to remain competitive, said Benedict Reid, interim CEO of the London Market Group, during the briefing.
And millennials have different expectations of career paths and employee contracts than many of their predecessors had, he explained, with more emphasis on changing roles and companies, and more flexible working patterns.
Respondents to the survey were asked to rate areas where they considered their organizations to be on the leading edge.
When asked if their organizations had a strong employee proposition and recruitment brand, 7% of respondents said their company is leading-edge; 42% said established; 31% said developing; 13% said moderate; and 6% said limited.
Only 6% of respondents said their company is leading-edge when it comes to having the tools and methods to support effective mobile working; 46% said established; 28% said developing; 13% said moderate; and 7% said limited.
Only 2% of respondents said their organization is leading-edge in being recognized for supporting and developing a globally diverse workforce; 31% said established; 24% said developing; 20% said moderate; and 12% said limited.
And just 2% said their organization is leading-edge in effectively promoting a work/life balance; 38% said established; 29% said developing; 21% said moderate; and 11% said limited.
When asked if their organization offered flexible working to all staff, 1% responded that their organization is leading-edge; 36% said established; 24% said developing; 20% said moderate; and 19% said limited.
Respondents also were asked the extent to which their organization was a role model for diversity across the industry.
Just 8% responded “we are a role model for diversity across the industry,” while 45% said “it's a priority and work is in progress to improve diversity,” and 47% said “there is work to be done.”
Mr. Reid said that the LMG would begin work immediately to act upon some of the findings of the study, and would pilot an education program and promote the market as an attractive place to work, among other things.
Deloitte received 567 survey responses from both underwriting and broking market participants across a range of functions. It also conducted 16 in-depth executive-level interviews. The survey was conducted during the fourth quarter of 2015.
The London Market Group is a cross-market representative body supported by the International Underwriting Association, Lloyd's of London, the Lloyd's Market Association and the London and International Insurance Brokers' Association.
Firms operating within the Lloyd’s of London insurance market are making strides to improve workplace diversity and inclusion, but there is still work to be done, according to a study published Tuesday.