2009 has been another puzzling year in the general insurance market. Whilst it has largely been spared the turbulence which has affected financial services and banking, there are still many troubling issues affecting both insurers and brokers which have had an inevitable knock-on effect for insurance recruitment.
Insurers keep complaining about rates being too low, but the actions of new entrants and other market share-hungry underwriters means that the soft market seems here to stay for a while yet. In addition, with a weak commercial property market, interest rates likely to stay low for the foreseeable future and stock market returns still looking unpredictable, insurers are finding that investment returns are also under pressure. All the more reason then to focus upon underwriting profit - but claims ratios traditionally come under pressure during a recession. Times for insurers are tough!
One battle which they are starting to get to grips with is reducing distribution costs. The days of broker consolidators earning 40% commission look numbered but there is still much work to be done. Axa and Aviva appear to be spear-heading this fightback but the likes of Towergate and Giles hold a strong position and will not give up their much-needed income easily.
As a result of this, underwriting jobs have been harder to come by than in recent years. However, new entrants to the market such as Arista are creating roles, whilst other forward-focused insurers are seeing this as a great time to strengthen their teams for the inevitable upturn which they hope will be arriving early next year. Good quality commercial underwriters are in still in great demand, particularly those with the ability to trade with brokers, and salary levels are still rising for those who keep an open mind for fresh opportunities.
Brokers have also had a tough year. The soft market has kept their income down and competition remains fierce. However, the concerns of good quality local brokers are nothing compared to those issues facing the consolidators who have borrowed heavily to grow their businesses over the past 5 years. The credit crunch has had a huge effect on these organisations, many of whom are unable to raise fresh funds to continue their expansion, and the re-negotiation of terms for their existing borrowings mean that their debts have become a huge millstone. If they also see their incomes hit by insurers squeezing their commissions then there could be some big names in trouble during 2010.
The good news for brokers looking for alternative career options is that this turbulence has led to many high calibre individuals setting up their own businesses, many of which are proving highly successful as they set themselves up as an attractive alternative to the big boys. Exchange Street is currently acting on behalf of a number of new insurance brokers who have seen initial success lead to a necessity to quickly put together a team and create jobs for experienced commercial account handlers, managers, account executives and technicians.
Insurers and brokers are being even more selective about who they take on, but rest assured that general insurance career opportunities are still out there for good quality insurance professionals! Feel free to get in touch with us at Exchange Street - we have the expertise to guide you through this tricky insurer and broker job market and towards those sectors where you can thrive.