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The global insurance brokerage market has developed significantly over the past few years, and now has an expected annual compound growth rate of 16%. As the sector matures, brokers, consolidators and investors look for new ways to take market share and improve service delivery through AI and machine learning. Paul Davey, Managing Director shares his views on opportunities across the market, how businesses can attract the best talent, in-demand roles and essential skills professionals should focus on.
For advice on the Insurance Broking market, support with your hiring strategy or guidance on finding a new role, contact Paul.
What specific trends have you seen in your market?
The past year has seen continued consolidation in the UK broker market, with over 155 broker sales in 2023. This continues to stir the pot when it comes to acquiring and retaining high quality talent in the broker market.
With new owners comes a dawning of realisation with individuals who have been loyal to their current employer, that nothing lasts forever, driving the ‘market referencing’ behaviour of all broking staff, who are curious to establish where their pay and career prospects sit versus the competition.
The new investment from within the UK, and particularly the US, has driven the thirst for growth even harder – with a continued drive from brokers of all size to seek top line income growth.
What factors have affected talent attraction and retention in the past 12 months?
Inflation has undoubtedly been the thorn in the side of every key decision maker in the UK economy this last 12 months; broking is no different.
How to best balance the pressures of retaining your best people (and let’s be honest even your average and below average people) in the face of an inflation rate running north of 10% is a significant challenge. Aligned with that, is the reality that broker employees continue to have a wealth of job choices to choose from. These two combining financial drivers have created an environment where individuals are more and more likely to be receptive to ‘testing’ the market out, to drive a counter-offer from their employer, or ultimately leaving for greater financial and career benefits.
Over the past 12 months talent attraction for brokers has been blighted with counter offer knocks for hiring businesses and recruiters alike – never have there been so many, nor so generous counter offers made. We are seeing increasing evidence that these short-term financial ‘sticking plaster’ solutions to retain staff are coming undone – with the original issue the employee had with the employer not being resolved. This results in the ‘countered’ broker employee, looking again in three to six months’ time.
Financial rewards and a variety of options for Account Executives continues to soar. Three years ago, the idea of an LTIP of any significant long-term value for an Account or Development Executive was rare and hard won. Today there are a multitude of options for those looking for a slice of equity, EMI or longer-term bonus arrangement, in return for exceptional performance, with six figure rewards available for those able to drive client revenue.
Which roles are most likely to be in demand in 2024 and why?
There won’t be a year I won’t write this, when the most in demand skillset is income producers; be that Account Executive, Development Executive or Account Director titles…the equation is simple; broker employers prioritise additional revenue streams, above all else.
Aside from that technical, experienced support functions such as Account Handlers and Brokers continue to be in demand, although the supply crisis that happened in 2021/22 has eased. Nonetheless options remain abundant.
What skills are in-demand for professionals wanting to work in this market?
Client development remains the most in demand skill, the ability to originate new client relationships (and revenue) is the most in demand, and rare, skillset.
More technical, experienced Account Handlers and placing brokers remain in demand as the market continues to evolve. Those with experience, qualifications and strong market connectivity with carriers, can demand a premium.
Looking to 2024, what do clients and professionals need to be aware of?
Inflation should ease through 2024, which will take the edge off the challenges employers faced in 2023, especially around wage inflation. With demand for income producing talent remaining high (as all brokers hunt to maintain double digit % growth) salaries and reward packages will remain high.
If as an employer you haven’t got an LTIP, EMI or shares solution to attract the very best talent, expect to lose out or only have access to mid table quality sales and executive talent.
As the hiring frenzy of 2022 begins to mature, we can also expect to see a portion of these people exiting these deals, as not all will be able to deliver on the high expectations (quite rightly) expected to achieve an LTIP / EMI / shares target. There will be opportunities for employers who are switched on and focused on attracting highly skilled and experienced professionals to benefit their own growth targets.
About Paul
Paul’s experience ranges from running large scale talent attraction campaigns for global insurers and brokers; to bespoke retained assignments, targeting senior appointments across the broking and underwriting markets. Paul enjoys working in partnership with people to deliver the results that allow them both to achieve the success they strive for.
For advice on the Insurance Broking market, support with your hiring strategy or guidance on finding a new role, contact Paul.
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