NEWS FEATURE: Leap in pay scales as industry rewards sought after staffers

Pay across the insurance industry has surged in recent months with the most sought after candidates benefiting from increases of up to 20%, according to a salary survey by recruitment consultants Joslin Rowe.

Booming pay scales are the result of a general cutback in training forced on insurers and brokers following the recession of the early 1990s.

This created a scarcity of suitably qualified candidates who now find themselves in a strong bargaining position with employers.

Another factor pushing up pay is intense competition for school leavers and graduates from rival white collar professions.

As Paul Cotter, managing director of Joslin Rowe, explains: "Insurers are having to compete with banks and information technology companies to attract the best quality staff."

He said the survey which covers the London insurance market, including Lloyd's, reveals a huge jump in pay over the last few months.

"The biggest pay leap has affected young executives with good communication skills moving to their second job. They are commanding pay increases of between 15 and 20%."

Analytical, account handling and claims- focused positions are facing the fiercest demand for staff, according to Cotter.

Indeed, the skills shortage is set to widen as staff increasingly realise insurers are unable to offer them jobs for life and become footloose.

The solution lies in training. But as Cotter reveals, insurers have been reluctant to invest in large scale staff development. More than 50% of insurers spend less than two per cent of their turnover on training, an amount that will have to increase significantly, he said.

And while more than 90% of insurers claim to encourage their staff to obtain professional qualifications, such as ACII, nearly 40% offer no salary increase or bonus as a reward to staff who acquire them.

This leads to a confusing paradox. Insurers claim their greatest priority for training is senior management, but they also identify senior staff as the area which is suffering the most serious skill shortage.

Cotter is clear that insurers' attitude to training must change: "As insurers expand and develop they will have to recruit staff from different industries, which means they must be prepared to pay for them by investing in their training."