The following column is written by Anthony Baldwin, board member of the London Market Group and CEO of AIG UK.
The London Market is only as strong as its people. According to the most recent London Matters report, 47,000 people work in and around the market. They enable some of the world’s largest and most complex risks to be seamlessly shared across many insurance businesses. Their co-operation delivers product innovation and expertise that is not available to the same degree elsewhere, finding new solutions to emerging risks. They are the fuel that drives a unique ecosystem. However, there are signs that that this incredible pool of talent needs to be re-filled from new sources to ensure the future of the market.
The good news is that the number of non-British employees working in the London Market has nearly tripled, rising from 10% in 2014 to 26% in 2018. This proportion is the same as for London as a whole and significantly higher than the average for UK financial services (12%). This diversity allows London to serve its international client base more effectively, bringing understanding and insight to local cultural and business customs. And our gender diversity is improving slowly.
The bad news is that rather than attracting a younger demographic the market needs, London Matters showed that the proportion of the workforce over 50 has increased from 16% to 26% since 2014. London faces the prospect of losing a significant portion of its more experienced workforce in the near to medium term due to retirement, without a ready pipeline of younger talent to learn from their experience and take on the roles of those retiring. Indeed, the recent City of London report, London Recharged: Our Vision for London in 2025, calls for new talent to be brought into London’s workforce.
London Market firms operate in a highly competitive global employment marketplace, particularly with regard to attracting employees with digital and analytical skills, as well as those from different backgrounds who can bring fresh and different perspectives. These are the sorts of employees we need if we are to prosper in the long-term. Which is why the London Market has been working to improve its value proposition to both current and potential employees and why, as President of the Insurance Institute of London (IIL) this year, and a board member of the London Market Group, I have a particular focus on London’s role as a global centre for insurance and a hub for talent.
The London Market Group has a number of initiatives to address these issues. For example, the London Insurance Life (@LIL) campaign aims to recruit a new generation of diverse talent through targeted careers events and social media. It uses social media channels to engage young people who are contemplating their career choice using ‘people posts’ – short interviews with people working in the market in a number of different roles. These posts give a flavour of what working life in the London Market is like and the @LIL pages also promote details of entry level schemes and job opportunities.
We also need to be prepared for the impact of the inexorable force of automation on our people. If we get this right, automation will free up employees’ capacity for higher-value activities.
Underwriters or actuaries might work more with data science and advanced analytics, with a greater need for the soft skills to interpret and communicate quantitative outputs. Adaptability will also become more important to stay responsive to changing risks and learn new approaches as technology changes. We need to bring in and develop risk experts, in both existing and emerging risk. Up-skilling and re-skilling our workforce to meet these new needs and demands will be as critical to maximising opportunities as attracting new talent. London Recharged calls for sector-specific digital skills training to enable the adoption of specific technologies that could improve service delivery. As part of this re-skilling, the London Market Group has run free taster sessions in data science and innovation, and lectures and talks that give further insights around the movement of the working culture and agile leadership.
But as we consider these challenges, we do so from a position of relative uncertainty as the world continues to adapt to remote ways of working. Many have emphasised that face-to-face relationships between insurers, brokers and clients have been the hallmark of the success of the London market in the past. This is indisputable. But this type of interaction has also been invaluable in developing talent; transferring knowledge from the old hands in the industry to those just starting their careers in insurance – a vital task with an ageing workforce.
This younger element of the workforce needs to be able to see how the industry works first-hand, to have the opportunity to ask questions and to learn from the experience of others. As leaders and as an industry, not only is it critical that we bring in new skills and diverse talent, but it’s our responsibility and duty to transfer the wealth of expertise to this new talent.
As London pulls together in these unprecedented times, so that we can continue to help our clients face the future with confidence, we need to do everything we can to re-fill our talent pool and equip everyone working in the insurance industry to be ready for the challenges of tomorrow.