Overview
Welcome to the latest Insurance Times careers/professional development survey. The last time we published this survey was in May 2005, and there are a number of interesting changes in this year's survey.
On a wage level, the general picture is that middle management are suffering in the market with wages falling, while senior management and CEOs are either getting paid more or getting bigger bonuses than ever before, or both. Is this evidence that middle managers have moved up to senior manager levels leaving a hole in the figures?
Within the regions an interesting picture is developing. The average salary for East Anglia has dropped, probably as big players like NU pull out, while the North is benefiting from rising wages, but of course from a lower base. Training and development is still important, with the majority (54%) receiving up to five days training a year, a figure 1% up on the last time we did the survey.
And significantly, 1% say they get over 35 days training a year. Employees within the industry at all levels are still getting good benefits, over half of respondents have both a company contributory pension and private medical insurance. This can only be good for the industry as a whole.
Our approach
The survey was limited to respondents in full-time employment working within the UK. In an attempt to represent the whole insurance industry, the survey was open to respondents from a wide range of insurance-related disciplines. Nearly a thousand people completed the survey: with men dominating the replies at 67%.
Brokers dominated the survey also, making up 44%, with insurers accounting for 29%. The other 27% were spread between loss adjusters, Lloyd's brokers and underwriters, lawyers, and IT companies and some accountancy and management consultancy firms.
Thirty seven per cent of our respondents are middle managers, 15% are senior management and 20% junior or account executive. As for the age range, 36% are from the 26-35 age group, 33% from the 36-45 age group and 18% from the 46-55 age group.
Three up, three down in regional salary see-saw
No surprises about the most lucrative region for insurance professionals - London topped our survey, with an average salary of £44,458. But, interestingly, insurance salaries in three regions beat the rest of the South East.
The South West (up by 11% to £37,727), the North West (up 10% to £37,709) and Yorkshire/Northern (up 10% to £36,250) have all overtaken the South East (down 9% to £36,118) since our last survey. And salaries in the Midlands and East Anglia have slipped by 11% and 12%, respectively. Redundancies clearly paid a part in this, with by far the highest number of Norwich Union's 4,000 retrenchments, 850, in Norwich.
Middle managers miss out
Middle managers seem to be the luckless losers in the salary merry-go-round. Their average salary has declined by 11% from £43,400 to £38,830, since our last survey in 2005.
Meanwhile, their senior management bosses are raking in an average £50,801. While chief executives aren't receiving a great deal more than their senior managers (less than £1,000 a year extra), they have more incentives in terms of bonuses.
Risk managers also saw their average salaries decline by 6%, from £37,500 to £35,278.
Paying a premium for young talent
In terms of age, insurance professionals clearly hit their earnings peak between 46 and 55 years old, where the average salary is £43,620. After 55, they can expect their salaries to tail off sharply by an average of 13% - those aged between 55 and 65 earned only £37,770. Clearly, experience is reflected in salary levels - up to a point. The UK insurance sector is no gerontocracy.
While the average salary of 26-35-year-olds was no surprise at £32,645, there was a preponderance of very high £100K+ packages in this age group (not listed in this graph), perhaps reflecting the fact that companies are prepared to pay a premium to secure talent at a young age.
Company benefits
Attractive company benefits are often what keep people employed at a company. Research has shown the two factors that can be more important than just salary are company benefits and feeling valued. Both are interlinked in the minds of many employees.
To this end many companies are keeping their employees happy. Over half of respondents (55%) have both a company contributory pension and private medical insurance and nearly half (46%) are given a mobile phone.
Interestingly, 42% consider a dress down policy a company benefit, showing that it is not just material benefits that employees consider important. A big financial company benefit - share options - account for nearly a quarter of respondents (24%). Bottom of the list with 6% is first class/business travel.
Hours of work and holiday
When it comes to hours of work, no matter what their level of job, everybody works more than their contracted hours of work. Chief executives and senior management put in the most extra. They worked nearly an extra 14 hours, the average for chief executives and over 10 hours, the average for senior management.
Middle managers put in nearly eight hours extra a week and junior/account executives and analysts put in nearly an extra five hours a week. Even administrators are working an extra two and half hours a week.
Do you get enough lolly?
Who'd be a middle manager? Their plight doesn't get any better when you look at bonuses. Middle managers are clearly feeling the squeeze from all sides, with their average bonus declining by 12% to £4,389, since our 2005 survey.
In contrast, chief executives, senior managers and analysts/consultants all saw their bonuses increase considerably.
But the average figures obscure wide fluctuations, with some respondents at all levels receiving no or small bonuses. A small number received large pay-outs, proving that it's individual performance that counts.
And there's no shortage of optimism about the year ahead. Most respondents expect a hefty increase in their bonuses - senior managers by 14%, risk managers by 22%, chief executives by 30% and even administrators by a staggering 63%. Clearly the market is in rude health - or perhaps all the publicity about bonuses in investment banking has got insurance professionals looking for a bigger piece of the pie?
Lunch break
How long people take for lunch is split. But a quarter say they take the usual 50-60 minutes. And 11% take only up to 10 minutes. More interestingly, is that given the prevalence of many liquid lunches within the insurance industry, only 2% admit to taking over an hour for lunch.
Time away
There is no change in the amount of time the industry takes for holiday. Forty-nine percent take 20-25 days,almost identical to the 47% last time we did the survey and the 42% taking 25-30 days is almost the same percentage as the 41% previously. The poor people who only have 15-20 days holiday (7%) is the same as last time. Only 2% have an allocation of over 30 days, a drop of 2% on last time.
Bonus gulf
The vast majority (92%) of respondents have their salaries reviewed annually, a similar picture to our 2005 Salary Survey. Two fortunate employees enjoy more than four annual reviews, which must make for an interesting year.
Insurance professionals did not seem to be clear about their market worth. There was a strong degree of uncertainty about whether salaries are competitive, with four-fifths of respondents unable to give a strong opinion one way or the other. And almost a third of respondents had no idea whether their salaries were competitive.
Up to the job?
Thankfully training is important to the majority of the industry. A total of 86% of our respondents take part in some form of training. This ranges from 54% taking part in 1-5 days training; 20% are involved in 5-10 days training; 8% take part in training of 10-15 days; 2% for 15-25 days; 1% for 25 to 35 days; and amazingly, 1% do more than 35 days training a year.
On a worrying note, 14% of respondents do not take part in any training at all. This figure is surely far too high, and remains the same number as the previous survey, indicating that some sections are not moving forward on the issue.
How this training is broken down is that 30% of training is for general on the job skills with 30%, similar to the 26% we recorded last time. FSA regulation is still highly important with over a quarter taking part in this training (26%) - this is a fall of 7% on the last time we did the survey, and probably accounts for the fact that more and more people in the industry are coming to terms with regulation so slowly need less training on regulatory issues.
But the most curious statistic is on e-commerce training, given the onward march of technology, it still only accounts for 2% of all training. But this is at least an increase on the zero per cent we had on this issue the last time we did the survey.
Measuring up
When it comes to appraisals, the industry has a consistent policy of holding them once a year, accounting for 52% of respondents. And 32% hold them twice a year. But again, the worrying figure is the 4% that never hold them. If you don't assess your staff how can you develop them?
A loyal industry?
The good news for the industry is that 70% of our respondents expect to be working in the industry in five years time. As with most things, you can only create success if you have continuity.
Sticking around?
It's often said that insurance is a people industry. While personal development is clearly the most important factor in attracting people to insurance in the first place (46% of respondents), the opportunities to interact, network and bond with colleagues play the greatest role in keeping insurance professionals in their current job.
The proportion of respondents citing people within the organisation as the most significant factor in their job has actually increased since our 2005 survey, perhaps reflecting the loyalty undoubtedly engendered by the industry in an increasingly uncertain working world.
And, despite popular perception of the financial services industry, insurers and brokers are clearly not motivated by money, with only 13% citing salaries or bonuses as the major motivating factor in keeping them in the current job.
Stressed out?
It is ironic that while middle managers are suffering from a fall in wages they are the group suffering the most stress. On our stress barometer rating seven as the highest level and one as the lowest, middle managers ranked an average of 4.02. Intriguingly, those paid the most - managing directors and chief executives - ranked the lowest score with 3.59. The lowest paid of all, administrators, come just above chief executives with a stress level of 3.67 and junior/account executives have a stress rating of 3.84.
In demand?
Forty one per cent of our respondents have been approached by headhunters, once or twice and 34% never have.
Worried about the chop?
When it comes to the threat of redundancy our respondents feel no worries at all. Fifty eight per cent account for the first two options of having no worries at all. This is in line with the previous survey and shows that despite changes in the industry people feel secure in their jobs. Only 2% are very worried about redundancy. Whether this will change in years to come will be one statistic to watch. Our survey may show that while some people may be in line for redundancy they could be in line for big pay-offs (depending on their length of service) and therefore not worried about redundancy.
