New staff at insurance companies will be qualified, better trained and have an aptitude for insurance, says Colin Lloyd
The compliance deadline is just seven weeks away and, aside from the obvious, insurers and brokers have a new problem: recruitment of staff after the January deadline. Three brokers representing a cross-section of the industry give their views on how FSA regulation will affect the way they choose new staff and the way they run their business.
What brokers say about their companies' recruitment processes after regulation
David Wheatley, director, Beddis & Partners
"You can't say the FSA will not directly affect the way we do business, quite frankly most of it will be for the good"
What is different with the FSA is that now there is a demand to be able to demonstrate that our people are competent. We know they are competent because they have been doing the job for a long time, but we need to be able to prove it.
We have been an advocate of Investors in People and already have appraisal programmes in place. The Investors in People plaque demonstrates that the company is committed to the sorts of ideals the FSA is talking about.
It doesn't prove categorically that each individual within the organisation is competent within their role, so now we are charged with the responsibility to do that. That is the significant difference.
People who haven't been embedded in the appraisal process will find it a challenge to become used to the culture the FSA will bring. It doesn't happen overnight and it will take a little while for everyone to become comfortable with the changes.
People talk about FSA standards, but for me, the FSA doesn't come into it. It's about being a professional, well-run business. What the FSA is doing is setting some standards across the industry.
Most people have very effective working practices in place, good audit trails, and deliver a good service to their customers. So they already have most of what the FSA requires in place as standard working practice, most of the time.
We now have to do it all of the time and we have to make sure everyone is doing it. There is always room for improvement and the day you stop trying to improve is the day the business will start to go backwards.
I don't think the FSA will directly impact the time spent on the recruitment process. The point I would make is where does that process lie now. Do recruitment agencies take on that responsibility or does it still sit with the prospective employer?
John Wade, director, Perkins Slade
"The FSA will be about professionalism and qualifications"
FSA regulation is a big thing, but is less of a threat to people like us and other professionally-run organisations.
There will be administrative problems setting up processes, and recording things, because for hundreds of years insurance has relied on somebody's word.
There is a world of difference between providing insurance and running a business. People in the insurance industry are highly intelligent and very knowledgeable about the market. However, there is a gap between that and running a business, partly because they have not been trained.
The FSA requires a different kind of individual in that there is a demand for business managers who can manage processes and people. At senior manager level, there will be more professional managers, not necessarily from the insurance market.
The FSA will be about professionalism and qualification. Businesses that can't cope with regulation will go. We will end up with fewer firms, but they will be professionally run.
Insurance offers tremendous opportunities if people have the right approach. What we need to do is recruit school leavers and graduates who show an aptitude for insurance and who have ambition and want to be challenged.
The opportunities are there because the FSA demands higher standards from a business manager. And, because there are fewer businesses around, they will have to grow in size. This means that there will be more of a career structure than there has been in the past.
As more people understand that the FSA is here to stay and the old way of doing things is no longer acceptable, certain people will leave the industry, creating vacancies for new entrants.
Now is a good a time to be in insurance because vacancies higher up the tree will become apparent. Those who haven't taken to the FSA or think they can get away with not complying will go.
Paul Denny, national sales director, Jardine Lloyd Thompson
"We have addressed the challenge the FSA poses for recruitment by offering scholarships"
Compliance within Jardine Lloyd Thompson will have a huge role in the future and it will impact on our recruitment strategy. If we feel someone is not compliant and the time and effort needed to make them compliant is high, then the chances are we won't take them on.
The process for recruiting people will change, not dramatically, but certainly for the better. The insurance industry for years has been seen as not so high up on the list of professions.
But all the activity involving terrorism and the turnaround in key markets has increased the profile of insurance in boardrooms of major companies, not just in the UK, but around the world.
The people who are representing the insurance market are on show more than ever before, so there is a need for professionalism and responsibility.
The FSA and compliance will enhance that, and the service we give to clients.
We have addressed the challenge the FSA poses for recruitment by offering scholarships to students and presenting them with the opportunity for placements here.
We interview students who are interested in insurance and offer the opportunity to work here to those who have potential. That way we can nurture people within our culture, while reducing costs for our recruitment process.
It is a way of identifying good people.
The process is still in its infancy but it has great potential. This will become commonplace in the market generally. We have talent in the organisation but we need to find the next generation from somewhere.
In the past, recruitment has been based on referrals and the process was based on the 'touchy-feely' stuff looking at their communication, confidence and personality.
The FSA will not slow the recruitment process down, it will increase the decision process when recruiting new people. Firms will reduce the level of risk when employing people.