Insurance Post

Accountancy in insurance

Accountancy in the insurance sector is booming, with job volumes in London alone rising by 15% in the past six months. Lucy Bousfield says this is due to increasing demands on finance departments and also the favourable job packages on offer

The demand for accountancy professionals is currently running at record highs across most industries and, while the banking sector continues to be the holy grail for many accountants with its promise of challenging work and high salaries, the insurance sector is rapidly starting to become more popular for career-minded accountancy professionals.

It is certainly an interesting time within the insurance industry, with the increased profile and demands of regulation. The new Financial Services Authority rules are hitting finance departments hard, creating the need to bring in the right skills to cope with the increased and changing workload.

Internal auditors and risk professionals are particularly in demand, especially at the post-qualification level between newly qualified and five years' experience.

Regional variations

Overall job volumes in London alone have jumped by 15% in the past six months, although underwriters and general insurance firms are still recruiting more heavily than brokers. There is also a big regional difference in recruitment trends.

Despite a healthy increase in the number of positions available across the UK, the centralisation of most insurance firms' head offices means London accounts for the bulk of mid- to senior-level accountancy recruitment.

The same goes for recruitment into business-orientated roles such as risk.

The regions are, on the whole, looking out for more junior accounts and assistant-type positions. Where larger firms have located their accounts functions outside of London, however, salaries for mid-level roles are generally up to £10,000 lower.

Compare and contrast

In many respects, accountancy careers within insurance are similar to those in commerce or banking. The skills needed within disciplines such as management and financial accountancy are much the same and the work comparable from both a problem-solving and interest perspective. And the salaries are comparable too.

This year, a newly qualified management accountant in the insurance industry can expect to earn a minimum of £40,000, plus strong bonuses running in the region of 10%, as well as generous pensions and, more often than not, car allowances.

The whole package for a newly qualified 25-year-old accountant is now running in the region of £55,000, which compares favourably to a similar base of £40,000 basic in commerce and £45,000 in the banking sector.

Evidence of the increased importance with which accountancy professionals are being viewed within insurance can be found in the salary hikes that have taken place during the past two years. These bring insurance in line with the attractions of the banking sector.

In 2002, a typical starting salary in insurance was £8000 to £10,000 below the rates available within investment banks. This gap has now narrowed to just £5000 in a bid to combat candidate shortages caused by a variety of industries chasing each new crop of qualified accountants.

Syndicate accountants

Insurance is the only industry in which non-qualified accountants, or accountants who are said to have qualified by experience, can earn more money than their qualified counterparts.

Syndicate accountants, the highly specialist and technical accountants charged with assessing the financial capability of Lloyd's syndicates and who concentrate on syndicate and FSA reporting, are highly valued.

So much so that their experience, rather than their qualification levels, dictate their salaries. These professionals can earn anywhere between £18,000 and £45,000 plus. However, recruitment within this area tends to be extremely cyclical and is centred around the main syndicate reporting calendar of November through to January.

Previous experience

While these accountants generally start working for a syndicate and then build up their experience, newly qualified accountants who have previously worked on insurance clients in the profession or the Lloyd's market are most sought-after for the traditional accounting roles. Skills shortages within this area, however, mean an increasing number of insurance firms are turning to accountancy professionals whose previous experience has centred around different sectors.

Despite many firms trying to hold off from this approach - fearing the industries are too dissimilar - it has actually proved time and time again to be a tried, tested and successful route for accountants' easily transferable skills.

As well as attracting the best candidates, insurance firms have shown a renewed interest in retaining their accountants, leading to promotions and business moves occurring sooner rather than later. Career paths have become more appealing, with in-demand roles, such as risk, becoming much more of an option for accountants within insurance as opposed to the limitations of several years ago.

Insurance has, without doubt, become a desirable sector for accountants, with increased job volumes, increased interest and increasing salaries.

Within the past few months alone, recruitment consultants have seen remuneration packages rise by at least 3% for syndicate accountants and management accountants, as well as a 'name your price' culture in some cases. With demand showing no signs of abating, this upward trend looks set to continue.

- Lucy Bousfield is a senior consultant on Joslin Rowe's accountancy in insurance desk.

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