The pay of insurance industry executives is not increasing as fast as in other sectors
The salaries of executive directors in the insurance sector are increasing at a slower rate than those of their counterparts at the majority of FTSE 350 companies.
New research published by Deloitte revealed that, in 2008, the median basic salary increase for full time executive directors at all FTSE 350 companies was 6.2 per cent.
This compared to a 7 per cent median increase in 2007 and a 6.8 per cent increase in 2006.
So, overall, increases were, in general, lower in the last year than they were in the previous two years, which, given the current state of the economy, comes as no surprise.
It’s important to remember that this does not mean that executive directors will suddenly be experiencing hardship – the average increase in the retail prices index in 2007 was 4 per cent, while in the first half of 2008 it was 4.2 per cent.
However, what should cause concern in the sector – particularly regarding the ability of insurance companies to retain their top staff – is that executive directors in the insurance industry were awarded much smaller pay increases than their counterparts in other sectors.
Deloitte’s guide to executive director’s remuneration showed that those in the insurance sector – along with their equivalents in the technology & telecommunications, retail, media, and oil and gas industries – saw their salaries increase by just five per cent in the last year.
This compared to an average executive director salary increase of 8.5 per cent in the financial services sector, and an average increase of 7.5 per cent in the utilities, banks, and transportation and business services sectors.
It’s also worth noting that insurance executives experienced smaller salary increases than their colleagues in the embattled construction industry.
That said it’s not all bad news for executive directors in the insurance world. They will be cheered by the fact that executive directors at small and medium-sized insurance companies (there was no data available for large companies) are paid 2.5 to 6 per cent more than the average for executive directors at similar-sized FTSE 350 companies.
