TOP 5 THEMES
Talent: competition / diversity & inclusion
The 20-40%-plus increase in quote requests and bound premium over the past 24 months has led to rising competition between carriers and brokers for talent to service this growth, particularly in areas targeted by new start-ups and growth classes. This has been most acute in the cyber and D&O sectors and more latterly in power than in P&C, but nearly every sector is reporting stretched resources. The following is our teams' experience and expectation for the year ahead:
- Talent shortages are likely to become more acute in the short term because there is more demand than supply, deal structuring is taking longer, and graduate and apprentice intakes were postponed or cut back due to COVID-19.
- The return of client visits during 2021 will erase some of the efficiencies secured from WFH trading, and new business development work will pick up again. Many brokers are itching to get back to Heathrow, which should improve their well-being!
- Prolonged hard market trading experience has added skill sets at a faster rate to a new generation of underwriters and brokers than for prior generations, with this skill set growth helping to take up some of the increased deal flow demands.
- The pressure on talent will start to ease if market conditions soften and/or the new start-ups do not meet their ambitious growth targets.
The London market has made significant progress on inclusion and diversity, from an acknowledged low starting point. With many carriers and brokers supporting cross-market initiatives, such as Aon’s ‘Dive In’ Festival. Lloyd’s has worked hard to address several cultural issues, as has the London Market Group (LMG), and the London market is closing the gap with other parts of the London financial services community. This is a subject that merits a separate report, but in summary, observations from our teams note the following:
- Graduate and apprentice interview rounds have seen an increased number of Black, Asian and minority ethnic (BAME) participants. Aon’s 2020 London intake, for example, had close to 50% hire rate from this demographic, more closely reflecting the city’s population.
- The US, and APAC ex-pat internal transfers are at a heightened level, with more women making moves. Following a Brexit pause, Europeans are again more open to moving to London than in the 2017-2019 period.
- The business benefits of an inclusive and diverse workforce are becoming better understood. However, in certain areas, there is much more needed, and it is a challenge high on most market CEOs’ agenda. For the market to truly maximise the opportunity that exists with increasing global interdependence and emerging risks, it has to both broaden its skill base and more appropriately represent the diversity of its clients.
"An absence of a suitable talent bench has meant many firms have multiple unfilled positions."