Terri Grainger says there are advantages in starting your career path with an insurer before switching to a broker or service provider

Insurance companies have often been viewed as fertile ground for brokers looking to recruit at all levels. Indeed, movement occurs from insurer to broker far more frequently than vice versa. While both brokers and employees obtain benefits from such moves, the transition is not always smooth for all.

Equally the moves of individuals from the core insurance market to service providers, such as software houses, premium finance companies and legal expense firms, cannot be ignored.

If an individual is considering a career in the insurance industry, there is much to be said for choosing to work for an insurance company. Insurance companies are well known for providing good technical training and over the years have invested heavily in this area.

Of particular interest to the broker in the current circumstances is the quality of management training provided to insurance company staff. The graduate training placements provided by insurance companies form part of this, although such opportunities have reduced greatly in number over recent years.

Brokers are known for their expertise in client servicing. Many brokers have grown rapidly in the past on this basis and should be respected for their success. However, some brokers are found wanting in the areas of leadership and management for the future, particularly where brokers are being acquired and the previous managing directors are looking to retire in the not so distant future.

When brokers recruit managers from insurance companies they can gain the benefit of well trained and experienced senior employees. Equally, insurance company employees can obtain many benefits from making such a move.

When an individual reaches a certain level at an insurance company, the next step up can be big and difficult to achieve.

However, moving to a broker can provide continued career progression. Other than at the very largest insurance brokers, individuals will have the opportunity to work in an environment with shorter decision making processes and have the ability to make and implement plans very quickly. In short, they gain many of the benefits that arise through working for a smaller sized company.

However, some will find the transition from insurer to broker less smooth than others. If the individual has worked for a large insurance company for a long period of time, making a move to other than the largest brokers can be a difficult adjustment and does not suit all.

Also while insurers are highly FSA aware, regulation is often brought much more to life in a broker.

Insurance language
Other differences can also be identified including the mindset of looking at a risk. Insurers interpret their policies from their own perspective, while a broker represents the client's point of view. Moreover, while insurers can talk a common 'insurance language' with the broker, brokers are left to interpret this language to the client.

For this reason the transition to the broking environment for the underwriter can be more difficult than what the key relationship manager encounters.

While there are some differing demands between the two environments, largely based upon size, the transferable skills cannot be denied and should be recognised as a short-term way of helping to overcome skill shortages.

Working in both environments can be truly invaluable, providing a solid understanding of the dynamics of the insurance industry.

Perhaps a move viewed with more scepticism than insurer to broker or vice versa, involves those moving out of the insurance industry to service providers, for example premium finance companies, software houses and legal expense companies. No doubt from the employee's perspective the transition can be even more difficult than those moving between insurer and broker.

The adjustment is also made even harder as many in the industry view such moves as alien. Why having gained experience in a particular field of the insurance industry and even industry qualifications, would an individual make such a move?

However, such a change can enable employees to move up the next rung of the career ladder into positions of management or senior development roles at a faster pace than they would otherwise achieve. It also forces individuals out of their 'comfort zone'.

Service providers to the insurance industry are increasingly seeing the benefits of poaching staff from insurers and brokers. Such potential employees understand how the insurance market operates; they are well trained and possess key industry contacts.

Nevertheless, this is just yet another form of competition brokers and insurers need to consider when they compete for the ever diminishing number of quality staff.

As has been well documented, the amount of high level training within insurance companies has reduced. This is most easily measured by the reduction in the number of graduate training placements offered, underpinned by the restructuring of a continually reducing insurance company marketplace.

For example, many of their offices now specialise in one area, such as claims. Partly for this reason, there is less opportunity for graduates or any other employees to join an office and get a true picture of what is required to run a successful business within the insurance marketplace.

Competition within the global economy and cost pressures mean that this trend is unlikely to reverse. Again that much asked question arises, how do we breed talent for the future? Points to consider:

  • In a market where the lack of future talent is well documented and keeping costs to a minimum is essential, brokers and insurers increasingly look to each others' staff when recruiting

  • The transition from insurer to broker tends to occur more often than vice versa

  • The benefits individuals can bring when transferring to brokers are numerous, not least their leadership skills

  • Service providers, such as software houses and premium finance companies, also have an interest in core industry staff

  • The reduction in training at insurance companies means they cannot be relied upon as such an easy access to talent in the future. IT
  • ' Terri Grainger is executive consultant at Mansion House