The Deloitte Talent in Insurance Survey 2015 UK in Focus

Survey findings

Figure 1. Popularity of insurance among business students, EMEA, 2015

Poland 2.9% Switzerland 2.9% Finland 2.6% Italy 2.2% South Africa 1.7% Belgium 1.5% Spain 1.4% Germany 1.3% France 1.3% Norway 1.2% Sweden 1.2% Austria 1.0% Czech Republic 1.0% Denmark 1.0% Netherlands 0.9% UK 0.5% Ireland 0.5% Middle East 0.3% UAE 0.3% Turkey 0.0% Russia 0.0%

Source: Universum0.0 Talent Survey 2015; 0.5Deloitte analysis 1.0 1.52.0 2.53.0 See Appendix for survey questions

Insurance is an unpopular career choice for The popularity of insurance has hovered around this business students low level over the past seven years (see Figure 2). UK insurers face an uphill struggle to attract the top This is somewhat surprising and disappointing given graduates they need. Just 0.5 per cent of votes cast for the resilience of UK insurers in the financial crisis. the most popular employers by business students were Conversely, the popularity of software and computer for insurers. Banking, in contrast, won 21.5 per cent. services has increased by a third during this time, from As a result, insurance was ranked a lowly 19th out of 6.5 per cent to 9.7 per cent. 26 sectors by popularity among UK business students in 2015.

Figure 2. Insurance and the eight most popular industries among UK business students, 2008-2015

30.0% Banks 25.0% Auditing and Accounting Fast Moving Consumer Goods 20.0% Software and Computer Services 15.0% Public Sector and Governmental Agencies Media and Advertising 10.0% Retail 5.0% Consumer Electronics and Household Appliances Insurance 0.0% 2008 2009 2010 2011 2012 2013 2014 2015

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

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UK insurance lags EMEA No insurer makes the cut. This suggests that those UK insurers are less popular than their peers in EMEA. business students in the UK who are contemplating The UK ranked 16th out of 21 EMEA markets by the applying to insurance are doing so as an after-thought, popularity of insurers as employers (see Figure 1). or, indeed, as an insurance policy, while their main This seems counter-intuitive, given that the UK is home ambitions lie elsewhere in the financial or professional to both the world’s leading specialist insurance market, services world. Lloyd’s of London, and several leading global insurers. The insurance-inclined do not have an innovative Insurers lag banks mind-set It appears insurance may be suffering because London Insurance–inclined students do not have an innovative is seen as even more of a centre for banking and mind-set. A resounding three out of the five employer professional services. These employers seem to be attributes that UK insurance-inclined students aspire ‘crowding out’ insurers. For example, the top five to least, compared to all business students, relate to employers for insurance-inclined students are two innovation (see blue bars in Figure 4). This is particularly global banks and three professional services firms, important at a time when disruptive financial including Deloitte (see Figure 3). technology firms (‘fintechs’) are starting to focus on insurance. For example, new social broker Bought By Many charges commission and clouds customer insight Figure 3. Top ﬁve most popular employers, by intermediating between policy holder and insurer. UK insurance-inclined students, 2015 Digital peer-to-peer car insurer Guevara could shrink the motor insurance market and increase anti-selection J. P. Morgan 33.6% by encouraging good risks to insure each other.1

In addition to lacking a creative mind-set, insurance- Goldman Sachs 28.3% inclined students appear conservative. ‘Financial Professional strength’ and ‘prestige’ – both hallmarks of the 27.4% services ﬁrm traditional insurance industry – are the top two Professional aspirations of insurance-inclined students compared to services ﬁrm 26.5% all business students (see green bars in Figure 5).

Deloitte 26.0%

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

Figure 4. Bottom ﬁve aspirations of insurance-inclined students vs. business students, UK, 2015

-15.4% Attractive/exciting products and services

-10.1% A creative and dynamic work enivronment

-8.7% Innovation

-8.3% Respect for its people

-7.1% Variety of assignments

Lacking innovative mind-set

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

The Deloitte Talent in Insurance Survey 2015 UK in Focus 2 To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below.

Figure 5. Top ﬁve aspirations of insurance-inclined students vs. business students, UK, 2015

Financial strength 18.2%

Prestige 12.9%

Market success 9.5%

Leaders who will support my development 8.8%

Performance-related bonus 7.9%

Conservative mind-set

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

Male dominated Work/life balance is the top career goal Men make up a larger proportion of the pool of UK business students want ‘work/life balance’. It was business students contemplating applying to insurance. the top career goal by a clear margin and selected by There is a striking 26.8 per cent drop off in the more than half (54 per cent) of all business students proportion of female students who want to work in (see Figure 7). In our view this reflects the long working insurance compared to the proportion of female UK hours that highly skilled graduates can face in their first business students surveyed (see Figure 6). jobs. ‘To be secure or stable in my job’ is the second most coveted career goal. It has risen in importance over the past seven years by more than twice as much Figure 6. Student gender breakdown UK, 2015 as any other career goal (see Figure 7).

All business 64.3% 35.7%

26.8% drop off

Insurance-inclined 47.1% 52.9%

Female Male

Source: Universum Talent Survey 2015; Deloitte analysis

The Deloitte Talent in Insurance Survey 2015 UK in Focus 3 To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below.

Figure 7. Career goals of UK business students, 2008-2015

60% To have work/life balance To be secure or stable in my job 50% To have an international career

40% To be a leader or manager of people To be competitively or intellectually challenged 30% To be entrepreneurial or creative/innovative To be dedicated to a cause or to feel that 20% I am serving a greater good To be autonomous or independent 10% To be a technical or functional expert

0% 2008 2009 2010 2011 2012 2013 2014 2015

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

Students aspire to development UK business students are focused on development. Four out of their top ten aspirations are related to development (see green bars in Figure 8).

Figure 8. Top ten aspirations among UK business students, 2015

Professional training and development 54.1%

High future earnings 53.1%

Leaders who will support my development 49.9%

A creative and dynamic work environment 48.9%

Clear path for advancement 44.3%

Good reference for future career 42.8%

Opportunities for international 42.7% travel/relocation Leadership opportunities 42.6%

A friendly work environment 42.4%

Inspiring management 40.5%

Development – related aspirations

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

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How do UK insurers match up to aspirations? Despite their unpopularity, insurers are more strongly associated with six out of the top ten aspirations of business students than all employers (see light blue bars in Figure 9). This paradox offers an opportunity for insurers. If they can publicise the aspects of working in insurance to which business students aspire, they can broaden their appeal.

Figure 9. How strongly insurers are associated with 40 key employer attributes compared to all employers, UK, 2015

Sponsorship of future education Clear path for advancement Client interaction Competitive base salary Peformance-related bonus High level of responsibility Interaction with international clients and colleagues Fast-growing/enterpreneurial Leaders who will support my development Professional training and development Competitive beneﬁts Recognising performance (meritocracy) Challenging work Market success Recruiting only the best talent Variety of assignments High future earnings A friendly work environment Inspiring management Personal control over my number of working hours Financial strength Overtime pay/compensation Flexible working conditions Prestige Good reference for future career Secure employment Rapid promotion Team-oriented work Corporate Social Responsibility Respect for its people Leadership oppertunities Acceptance towards minorities Ethical standards Enabling me to integrate personal interests in my schedule A creative and dynamic work environment Environmental sustainability Opportunities for international travel/relocation Support for gender equality Attractive/exciting products and services Innovation -15-10 -5 0510 15 20

Less than average More than average

Top ten aspirations less strongly associated with Top ten aspirations more strongly associated with insurers than average insurers than average

Source: Universum Talent Survey 2015; Deloitte analysis See Appendix for survey questions

The Deloitte Talent in Insurance Survey 2015 UK in Focus 5 To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below.

Actions for insurers Attract more women graduates Our data suggest that insurers who take a number Insurers that communicate the great strides the industry of actions will benefit. In this section Deloitte outlines is making to become gender-balanced will win more those actions. of the female graduates they clearly need. Women are a crucial pool of graduate talent that insurers are The importance of talent is increasing for insurers. unduly missing. Deloitte analysis reveals that women The level of competition from rival sectors is students in the UK are 26.8 per cent less likely to apply intensifying, due to technological advances, legislation to insurers than all employers. and shifting customer preferences. Intensifying competition with asset managers in the retirement Insurers can attract more women by: savings market following pension freedom is only one example of this trend. • making their job descriptions more appealing to women Our findings show that insurance is unpopular as a career destination for UK business students. • showcasing the success of women in insurance, such Furthermore insurers do not appear to attract people as those in leadership positions, e.g. Prudential UK with an innovative mind-set. CEO (Jackie Hunt), Lloyd’s of London CEO (Inga Beale)

Tell students that insurance is an international • dispelling misperceptions among graduates that business with international work opportunities insurance is male-dominated. ‘International travel and relocation’ was a top aspiration (7th out of 40) for all UK business students, Tell students that insurance is innovative but less associated with insurers than all employers ‘A creative and dynamic working environment’ was (-8.2 percentage points). This is a misperception. a top aspiration (4th out of 40) for all students, but Insurance is a highly international business. The UK’s less associated with insurers than with all employers leading insurers derive much of their business from (-5.0 percentage points). Similarly, ‘innovation’ was international markets and offer international work 12.3 percentage points less associated with insurers opportunities, particularly in emerging markets, where than all employers. talent pools are thinner. Insurers that address the misperception that their To change this perception, insurers can: industry lacks innovation will attract more innovative people. These people are key to the future success of • educate graduates on the global nature of insurance the industry. Digital technology, in particular, presents huge opportunities to improve the traditional business • convey that insurance offers good opportunities for model. ‘international travel and relocation’, e.g. secondments Insurers can tell students and graduates about • communicate that career prospects can be enhanced emerging telematics-based services. This technology is by relocation – insurers need deeper talent pools in advancing beyond its traditional role in risk assessment emerging markets. and pricing to risk prevention and reduction. In addition, it is spreading into new lines such as health Tell students that insurance offers stability and home insurance.2 Insurers which explain that insurance can offer ‘work/life balance’ and ‘job stability’ will attract more Foster innovative talent within the organisation graduates. ‘Work/life balance’ and ‘job stability’ are Insurers that foster innovative talent within the the top two career goals. The latter has increased in organisation will win. Developing talent among importance more than twice as much as any other staff provides a way for insurers to fill some of their career goal in the past seven years. Opportunities for most important talent gaps, such as the lack of data ‘work/life balance’ are arguably greater in insurance scientists who are experts in insurance and digital than in other sectors within financial services, due to technology. Incentivisation is key to encouraging the long-term nature of insurance business. people to come up with good ideas.

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Tell students about training and development opportunities ‘Professional training and development’ was the top aspiration for all students and more strongly associated with insurers than other employers. Insurers that communicate the many and varied training and development opportunities in insurance with broad applicability, such as data modelling, could attract many more graduate job applications.

Insurers could also make their graduate training programmes more appealing by improving the breadth of training on offer and making programmes more focused on digital technology.

Macroeconomic context

Figure 10. Growth in average monthly wages (US$), UK, 2008-2014

$5000 10.0%

$4000 5.0% 0.0% $3000 -5.0% $2000 -10.0%

$1000 -15.0%

$0 -20.0% 2008 2009 2010 2011 2012 2013 2014

Average wages (monthly, US$) Growth in average wages (US$; % annual)

Source: Economist Intelligence Unit See Appendix for notes

Average wages in the UK had not caught up with 2008 levels by as late as 2014. However, a 7.1 per cent jump in wages between 2013 and 2014 suggests that this milestone could soon be passed.

Figure 11. Overall and youth unemployment, UK, 2008-2014

25.0%

20.0%

15.0%

10.0%

5.0%

0.0% 2008 2009 2010 2011 2012 2013 2014

Overall Youth (Aged 15-24)

Source: OECD

Despite a relatively flat overall unemployment curve over recent years, there has been an encouraging fall in youth unemployment, down from a peak of 21.3 per cent in 2011 to 16.9 per cent in 2014.

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Figure 12. Total Gross Written Premiums in US$ mn and as % of real GDP, UK, 2008-2013

$500,000 25.0% $450,000 $400,000 20.0% $350,000 $300,000 15.0% $250,000 $200,000 10.0% $150,000 $100,000 5.0% $50,000 $0 0.0% 2008 2009 2010 2011 2012 2013

Gross Written Premium (millions US$) Gross Written Premium as a % of real GDP

Source: OECD See Appendix for notes

In 2013, total gross written premiums (GWP) in the UK fell for the first time since 2010 to reach USD 340,342 million. This is significantly lower than the pre-crisis levels of USD 453,208 million seen in 2008. However, the insurance sector’s importance to the British economy remains strong, with GWP equal to 14.5 per cent of GDP in 2013. This compares with a share of almost 20 per cent in 2008.

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Appendix

Terminology Deloitte examined the survey results from 211,000 business students in Business students = students studying business-related subjects. 30 markets: in the Americas, Brazil, Canada, Mexico and the US; in APAC, Australia, China, Hong Kong, India and Singapore; and in EMEA, Austria, Insurance-inclined students = business students who put at least one Belgium, the Czech Republic, Denmark, Finland, France, Germany, Ireland, insurer in their top five ‘ideal employers’, when offered a list of potential Italy, the Middle East (defined by Universum as Egypt, Lebanon, Kuwait, employers to choose from. Qatar and Saudi Arabia), the Netherlands, Norway, Poland, Russia, South Africa, Spain, Sweden, Switzerland, Turkey, the UAE and the UK. The About the Research number of markets included in global and regional averages varies between This report is based on the Universum Talent Survey 2015. Universum has 23 and 30. been researching students’ career intentions since 1988. In 2014-15, it surveyed around 1.2 million students and professionals, drawn from more than 2,000 universities and institutions of higher education in 55 countries.

Note to Figure 1 Note to Figure 7 Survey question: “Choose the five employers you most Survey question: “Below is a list of nine possible career want to work for [from the list of employers you would goals. Which are most important to you? Please select consider working for], your five ideal employers”. a maximum of 3 alternatives.” Importance of goals is Insurance popularity by market is calculated as the then calculated as the percentage of students choosing number of times insurers are short-listed among the each career goal on their shortlist of top three goals. five “ideal employers” in each market. Note to Figure 9 Note to Figure 2 Survey question: “Which of the following [40 attributes] Survey question: “Choose the five employers you most do you associate with your chosen employer(s)?” want to work for [from the list of employers you would consider working for], your five ideal employers”. Note to Figure 10 Industry popularity by market is calculated as the Average wages (monthly): average gross earnings per number of times employers for that industry are short- worker per month. listed among the five “ideal employers”. Growth in average wages (annual): percentage change Note to Figure 3 in hourly wages in US$ over previous period. Survey question: “Choose the five employers you most Figures are converted to US$ using an average want to work for [from the list of employers you would exchange rate. consider working for], your five ideal employers”. Fluctuations in average wages could be partially due to Note to Figures 4, 5 and 8 changes in the GBP/US$ exchange rate. Survey question: “Which of these are most important to you? Please select a maximum of three alternatives Note to Figure 12 [in each of the following four categories: Employer Data for 2014 is not available. Reputation and Image; Job Characteristics; People and Culture; and Remuneration and Advancement Fluctuations in average wages could be partially due to Opportunities].” changes in the GBP/US$ exchange rate.

The Deloitte Talent in Insurance Survey 2015 UK in Focus 9 Endnotes

1. Anti-selection ‘is the adverse impact on an insurer when risks are selected that have a higher chance of loss than that contemplated by the applicable insurance rate. Generally anti-selection occurs when there is asymmetric information between the parties to a transaction, or where an insurer has an underwriting “blind spot”. ‘How Life Insurers Combat Anti-Selection’, Munich Re, 2011. See also: http://www.munichre.com/site/mruk-allfinanz/get/ documents_E-1623528574/mruk/assets.uk.allfinanz/ Documents/Publications/Thought%20Leadership/ Antiselection.pdf

2. ‘Insurance disrupted – General insurance in a connected world’, Deloitte, 2015, p.6. See also: http://www2.deloitte.com/content/dam/Deloitte/uk/ Documents/financial-services/deloitte-uk-insurance- disrupted.pdf

The Deloitte Talent in Insurance Survey 2015 UK in Focus 10 Contacts

David Rush Michel De La Bellière Partner Partner EMEA Insurance Co-Leader EMEA Insurance Co-Leader UK Insurance Leader France Insurance Leader +44 20 7303 6302 +33 1 40 88 29 95 [email protected] [email protected]

Tim Clayton-Ball Margaret Doyle Partner Partner Consulting Head UK Financial Services Insight +44 20 7007 8446 +44 20 7007 6311 [email protected] [email protected]

About the authors Margaret Doyle, Peter Evans, Cem Turan and Christopher Ross comprised the London-based Deloitte UK Financial Services Insight team, and Gaurav Narula and Vishwanath Sonnad the Hyderabad-based Financial Services research team that worked on this report.

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