Spotlight: Future of broking: Get the training right

When more than four out of five students say they would not consider a career in insurance it really brings home the importance of looking after those who would.

What is perhaps most depressing is the continually low rating insurance gets from young people as a potential career choice. In 2005, the Chartered Insurance Institute found that only 14% of students would consider working in insurance. Five years later that figure had nudged up to 17%, and in the latest round of research it stands at 18%.

This means companies in the insurance sector are fighting for talent from a very small pool of people – and they often need to overcome negative perceptions before they can even start discussing the exciting opportunities available.

At an industry level it is necessary to do more work to change perceptions and to highlight the opportunities available. The CII, the British Insurers’ Brokers Association and the Association of British Insurers can point to a number of initiatives that have been launched over recent years to improve the level of training and professionalism in the market.

It is now almost five years since the Aldermanbury Declaration was issued, pushing for more professional standards in the market, and the three associations are also currently working with the government to double the number of apprentices in the sector as part of the Insurance Growth Action Plan.

“The apprenticeship scheme has support from the government,” says David Sparkes, head of compliance and training at Biba. “In the coming months this will gain a lot of momentum.”

However, despite progress in terms of the Insurance Growth Action Plan, there is still some criticism that individual companies are not providing the right level of training to staff or working to strategies focused on the long‑term health of the market.

Short‑term focus
There is still a tendency to focus on quarterly results rather than long‑term success, and too many firms struggle to look past the end of their nose, according to Mark Bower‑Dyke, chairman at broker Be Wiser Insurance – an approach that can pose problems when it comes to succession planning as well as bringing on new talent.

“I think succession planning is about having a business plan that is longer than three years. Most major brokers and insurers do not seem to look that far ahead, but how can you develop people if you do not have a very clear idea of where you are going? For any business to be successful and have a long‑term place in the market it has to have the ability to develop its employees,” he says.

As a case in point, Bower‑Dyke questions why so many people do not attempt their ACII qualification until they are half way through their career. This is why the 100 or so new apprentices Be Wiser Insurance is taking on this year will all be aiming to achieve the ACII qualification – as Bower‑Dyke explains: “What is the point in teaching someone at 40 or 45 to achieve their ACII?

“You have lost 20 years of their career at that stage. You do not take your solicitors exams after you have been doing the job for 20 years, you take the exams to get you ready for the job.”

Once firms have developed a clear strategy around where they want to get to in the next five to 10 years it becomes easier to identify the skills required to get there. Brokers can then go about implementing the training and development programmes that will generate these skills and start giving employees real‑life experience that will let them develop further.

Despite the difficulties of attracting people into the insurance industry, there are some brokers who have chosen not to wait for people to come to them and have taken things into their own hands.

For example, in Northern Ireland Autoline Insurance has pushed hard to raise its profile with local school leavers and offer them exciting opportunities in the insurance market. “One of the challenges we had was that we found we were an ageing business and at local schools and colleges level, insurance and financial services was not being seen as a career option,” says Michael Blaney, managing director at Autoline Insurance.

“Businesses need to go into these places, attend career forums and fairs and position financial services and insurance as a rewarding future career.”

Working with a local college, Autoline set up the Autoline Academy – and over a two‑year period students get the chance to experience every department in the company and study towards various CII qualifications.

Although such initiatives do need financial support, the biggest investment required is often management time. People need to engage with the college and outline exactly how a course would work. In many cases colleges will be happy to work with companies, but may struggle with the technical knowledge required to deliver a course in full – which is where management come in.

Middle and senior managers have to make themselves available and provide this knowledge, as well as potentially delivering occasional presentations. They need to be there to help students and create a formal framework to assess individual progress, identify any problems and make the experience as commercially relevant as possible.

Training employees
Be Wiser has taken a similar approach, but with its own staff, rather than prospective employees. It has created the Be Wiser University for Insurance for its own staff. It has also set up the Wiser Academy to offer training to the rest of the industry.

Training is a central part of the broker’s philosophy, and while chairman Bower‑Dyke agrees management time must be freed up to make training initiatives successful, he also says budgets have to be substantial.

“You should be investing 15% to 20% of your salary costs into developing members of staff,” he says. “If competitors do not bother training their staff then they are not going to be much competition. It boils down to having people who know what they are talking about speaking to the customer, rather than people just selling on price.”

Some firms will baulk at the idea of spending that much on training, but it is difficult to see how businesses can create a culture of development and generate exciting opportunities for staff if they do not prioritise professional learning.

There is no doubt that brokers operate in a competitive environment and that margins are tight, but is training something they can afford to cut and expect there will be no consequences for their business over the long‑term?

Indeed, when the market is so competitive and there is a shortage of well‑qualified people in the labour pool, it is those firms that attract, train and then retain the best talent that will set themselves apart from rivals and give customers a more professional service.

While the bedrock of such training must be the technical skills people have, it is important not to overlook or undervalue the benefit of soft skills. Kate Cooper is a senior adviser at the Institute of Leadership and Management, and she says technical training can only ever be part of the picture.

“Technical competence only goes so far – you need to identify what goes into relationship management,” she urges. “It is not just about knowing your product and market. It is about emotional intelligence, ethical behaviour, reliability and trust. All of these soft skills are very important and very often neglected.”

Explaining why these soft skills are often pushed to one side, she adds: “This is in part because they are very difficult to teach. It is asking people to change how they think of themselves and how they relate to things.”

Appearing dispensable
Another problem is that many senior managers – particularly those in SMEs – are fearful of making themselves appear dispensable, which sometimes makes them reluctant to work with younger employees because they see them as a threat.

“People want to be relied on; they want to be important and invaluable,” says Cooper. “They sometimes feel that if they share their experience, their value is lessened.”

At one level this is understandable, but it is also short‑sighted in terms of developing a business that can go on to bigger and better things. Autoline Insurance has implemented a system where each account has one senior and one more junior handler to make sure employees get the experience they need at an early stage of their career and learn from those above them.

It also lets the more experienced personnel step back from client‑facing roles and develop their managerial skill set. Blaney explains: “We want to avoid situations where there is one single person who manages the client relationship. Over an extended period of time we are looking to give continuity of service.

“It also helps if there is not just one person on a day‑to‑day basis. If someone is away then there is always someone else who knows the account. It allows us to give exposure to people and bring less experienced people out on bigger cases, letting them gain the experience they need.”

But it appears this is something that a lot of firms struggle with – and when it comes to letting less experienced employees loose on the clients, some senior managers find it difficult to delegate.

Elizabeth Mills, head of business services and operations at Marsh Pro Broker, says: “Where succession planning falls down on training and development is that firms do not give the individuals the chance to have a go in the business. They have to be allowed to look after bigger clients and put into practice what they are learning.”

This means in stopping younger managers getting the experience they need, more experienced executives might think they are protecting the clients – but in reality they are threatening the firm’s ability to provide a continuity of service long into the future.

Whether business owners want to sell their company or not, Cooper says they will always benefit from developing staff and creating an effective succession plan.

“It is funny that in an industry so familiar with risk, brokers do not ever really manage the risk of them not being there,” says Cooper. “If they managed the business to a state where they are not needed then it becomes much more attractive to sell as there is not the risk of losing so much business when the key person [is not there]. Or they can totally trust the people they are leaving behind to manage it in their absence and retain a financial stake.”

Strong training and succession development programmes help businesses prepare for what the future might throw at them. If the broker is planning a move into a different sector, then by aligning this strategic decision to the training programme it can nurture the skills it needs from within.

Similarly, where middle managers are well‑trained they are better able to step into unexpected vacancies that arise and prevent the business from recruiting externally. There is nothing wrong with bringing in an external recruit, but too often it is the default reaction and is forced upon the business because it has not managed its internal training programme very well.

Brokers should not see external recruits as a quick fix to particular problems. Although they may have the technical skills needed to carry out the job, they will have to learn the culture of the business they are coming into – and this often proves problematic.

In many instances it is easier to give technical training to an existing employee who already fits into the culture and understands the way the business works.

Although there has been a lot of noise in the insurance market about professionalism and training, there is still a lot more that firms could do to align their long‑term strategy with the learning opportunities they provide and the practical experience they then back it up with.

Where SME brokers get this right it will give them a wider range of more lucrative exit options at the end of their career. It will also improve the performance of the business and help to retain staff.

Getting the training programme may not be easy, but it certainly offers benefits at both an individual and company level.

This article was published in the 27 November edition of Post magazine.