Insurers and brokers should capitalise on the brain drain away from the banks, says Oliver Cover. First, target the best graduates and convince them the industry isn’t dull
It was a lazy student day in the pub a couple of years back. A group of us were discussing job offers and rejections, the traumas of assessment centres and hassles of numeracy tests, and the general hustle of trying to win a job after university.
Then I dropped my clanger: I had rejected an offer from a City bank for a position in insurance. The disbelief among my pals was palpable.
My arguments – that the post was with a solid company, was international and included lots of training – went unheeded. “But it’s insurance,” was the reply.
Recent economic events have made many of my banker friends reconsider their careers and, at worst, forced some of them to seek something new. Insurance now seems a brighter option and many of my old university friends have asked for advice about getting into the industry.
With the exception of AIG, which was damaged by credit default swaps and hence the frailties of the banking system, the robustness of insurance stands in sharp contrast to the increasingly discredited banks.
It has never been a better time to search aggressively for the best graduates. Bright, numerate and business-savvy students who would have once waltzed into the likes of Goldman Sachs or Merrill Lynch are realising that jobs in banking are likely to be harder to come by – and that reduced pay, scrapped bonuses and a lack of job security make it a suspect career choice anyway.
The insurance industry can capitalise on the brain drain from the banks if it targets these university leavers the right way.
What is my advice to insurers and brokers wanting to do just this?
First, banish the impression that insurance is dull. I was lucky enough to be on Zurich’s global associate programme, which meant I flew to Zurich for training, had rotations across functions of the firm, met members of the group executive – including chief executive James Schiro – and, best of all, had a 10-week stint in Los Angeles with a Zurich subsidiary, Farmers.
Insurers may be wary of the costs of sending graduates overseas, but it need not be elaborate. Offering a bit of travel early on, if only a training course requiring a flight, would be sufficient. A little bit of glamour goes a long way.
Second, go back to basics. I was never that bothered by glossy corporate brochures. Instead, it was the patient storytelling of an elderly but passionate tour guide who showed members of the stock-broking society at my university around Lloyd’s. He vividly described how ship owners would sit with underwriters in the 1700s, drinking coffee while trying to persuade them literally to “underwrite” a portion of their risk by signing a contract with a quill pen.
He made insurance evocative, steeped in history, and a crucial enabler for not only the intrepid explorer, but for any human action and initiative that involves risk.
Third, aim high. I’ve been told many times that it is pointless for insurance to aim for graduates from the top universities. But practically all the younger members of my office went to institutions high up in the league tables.
Last, don’t forget to emphasise the small things that keep us in the industry. It might not be uncommon to have the occasional late night and early start, but few of us regularly work the 14-hour days expected of employees in other professions.
Moreover, in banking, you can get tired by the number of egos you have to contend with; in consultancy, there are infuriating corporate types who speak more jargon and hype than they do understandable English. In insurance, I have met some of the nicest, funniest and most grounded people you could wish to encounter, at the highest and lowest levels.
So take advantage of the loss of confidence in the banks and work hard to attract the talent that will be shying away from the City in the aftermath of the financial crisis. It would be very unwise to let these people slip by.
How it all adds up
Figures from the Office for National Statistics show that during the three months to the end of September 2008, the finance and business services sector was the worst hit by the credit crunch.
There were 34,000 redundancies â€“ a 62% rise on the previous quarter, when 21,000 people were made redundant.
There is some good news, however. Redundant workers with financial/business services experience are more likely to find a new job than those with expertise in manufacturing, transport or construction. As of October 2008, there were 138,000 vacancies in finance/business services, compared to 44,000 in manufacturing, 36,000 in transport and 15,000 in construction. In June 2008, there were 6.63 million jobs in the UK finance and business services sector.
Oliver Cover is an underwriter for Zurich. He writes here in a personal capacity