Whatever happened to the insurance monopolies?

by Heat Recruitment

The insurance sector is changing at an astronomical rate. As the level of global risk increases, so too does the requirement for this vital service to grow. As one example, firms are now buying cyber-insurance in a “mad panic” amidst WannaCry attacks against the NHS and exponentially increasing cyber threat against UK businesses.

Professional Indemnity Insurance (PI) is another area experiencing huge growth. With the rise of the SME, combined with various regulations affecting all walks of business, protection against any allegations of inadequacy is required by a growing number of firms.

For insurance specialists, however, there’s clearly never been a better time to be in the industry. Where monopolies once held sway, boutique agencies have now taken centre stage – taking advantage of the requirement for niche services.

But what’s next for the insurance market?

As an industry, the insurance sector was once dominated by a select group of companies… this has now flipped, with the specialists working in those firms going at it alone. Through setting up their own specialist insurance services, there is not only a far greater choice for customers (providing more competitive pricings as a result) but also for potential employees.

In terms of recruitment, the insurance sector is no longer an employers’ market. With such a huge range of firms now in operation, there’s significant competition for effective candidates. For the foreseeable future, the industry will continue to expand towards specialised services. In order to compete with their far larger competition, we expect to see a huge resurgence in mergers and acquisitions. Today, the timing has never been better for niche insurers – demand for their services is increasing, as are the salaries that can be commanded.

A more recent development we are beginning to see is a flutter in this trend. Former insurance brokers Mike Rutherford and Chris Wacey broke away from their old firm and began their own in 2001 – AllClear Insurance Services. Today, the pair are set to net a £30m pay-out from the sale of their company – a weighty commission. Continuing this trend, albeit on a far larger platform, insurance giant Allianz has now announced plans to purchase the remainder of Euler Hermes for $2.2bn.

In a statement, Allianz confirmed that: “Increasing ownership in Euler Hermes is… a logical step for Allianz to deploy capital in strategic businesses delivering solid operating performance, and to strengthen positions in core home markets and in property and casualty in particular.”

So where does this leave candidates, and what needs to be done to properly take advantage of this increasingly flexible sector?

In short, candidates must prepare for today’s market, whilst making preparations for tomorrows. While currently the market is increasingly dominated by specialist firms, as owners begin to retire and sell their company for significant premiums, the pendulous market may well shift back towards its previous state.

For a truly optimal career path, insurance specialists should leverage the explosive career growth that can be gained in smaller firms – working to get as high up as possible as fast as possible. Within the next decade, we predict a resurgence from the truly big players here, and in the case of a buy-out or career change, the experience gained will be invaluable in the transition.

If you’re looking for your next role in Insurance or are seeking high performing staff to augment your existing operations, get in touch with our specialist team at Heat Recruitment today. Should you be looking to upskill your own staff, then please speak to our Heat Training Team – made up of experienced Insurance Trainers ready to provide first class insurance training and development – 0345 375 1747.

By Esther Alley