Good Underwriters May Be Missing Opportunities

A specialist in recruiting and placing underwriters, the firm, formerly known as Christopher and Long, has more than 24 years experience in the field.

Talent is scarce, said Mr. Tower, and companies are going to have to do a better job at selling themselves and improving salaries to attract the talent they need. However, he said, there is not much new blood out there, and underwriters tend not to be too anxious to leave the firms they are with.

"There is an immense shortage of good underwriters right now," he said. He attributed the shortage to the prolonged soft market, noting that since underwriting was not in demand during those years, the situation led to a shortage of highly talented people.

"Underwriters are in a better position now than they were three years ago," observed Gary Abram, managing partner at HCap. "New talent and existing talent are more in demand than ever."

According to Zach Carruthers, director of research for HCap, the survey was conducted by telephone, contacting underwriters throughout the country. Each survey participant was asked 10 questions to evaluate the profession. The survey was conducted between October and November of 2002.

Among some of the findings, 72 percent of the underwriters surveyed said that underwriting talent was in either very great or great demand. However, 47 percent said compensation trends would be less than they were three-to-five years ago, while only 32 percent felt it would be greater.

But when it comes to making a job change, it isnt salary that pushes underwriters out into the market place. It is opportunity, according to survey results.

In the survey, 49 percent of respondents said that underwriters were less likely to change employers compared to three-to-five years ago, while 42 percent who said they were more likely to make a move. The same percentage, 42 percent, said there were fewer job options than there were three-to-five years ago, while 48 percent felt there were more options.

When it came to making the career move, 63 percent said career opportunity was the most important reason for making a job change, while 25 percent would make the move for salary.

If companies want to recruit talented people, they have to offer more than a little money, Mr. Tower noted.

"Underwriters are very comfortable where they are," he said.

One point of the survey that has reinforced Messrs. Tower and Abrams impression of the current state of the marketplace for underwriters is that there are not a lot of new underwriters coming into the field.

According to the survey, 66 percent of underwriters involved in commercial underwriting have 11 or more years experience. Of that figure, 34 percent have more than 20 years experience. By contrast, 33 percent had 10 years or less of experience, with only 16 percent of the underwriters saying they had five years or less experience.

"There is no fresh pool of talent," Mr. Tower said.

The years of consolidation and decline in training of professionals by companies has contributed greatly to the current climate, added Mr. Tower. And while there has been some pick-up in company training, for the near term, the shortage will probably continue, especially in the demand for underwriters with three-to-five years of experience.

When it comes to the type of lines underwriters are willing to look at, many steer away from reinsurers, he said, noting that reinsurance is not viewed as a very stable work environment at the moment.

Primary and specialty lines were rated the most desirable career options, with 61 and 57 percent, respectively, saying these lines were either very desirable or desirable.

Reinsurance treaty underwriting fared the worst, with only 35 percent saying they found this a very desirable or desirable line. Thirty percent said the line was either an undesirable or very undesirable move, while 30 percent rated it as average.

Companies, Mr. Tower explained, are going to have to work harder at bringing in new blood and, at the same time, pay more and provide greater opportunity for underwriters if they want to get the talent.

Underwriters, he believes, need to recognize that there are growing opportunities for them, and that they may be missing out.

"I tend to think that they are not in the marketplace and they dont know what is out there for them," Mr. Tower suggested.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, January 13, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.