Coronavirus and the Insurance Industry – are you up to date?

​At this point, we probably don’t need to explain that the Coronavirus has been declared an insurance catastrophe.

Potential losses are now estimated to be more than $10 billion, with approximately 250,000 business interruption policies in question.

The consensus is that pandemics were not contemplated for coverage under most business interruption policies. In July 2020, the Insurance Council of Australia (ICA) and Australian Financial Complaints Authority (AFCA) pursued a case to clarify the wording in pandemic exclusions. In November 2020, the NSW Court of Appeal ruled against insurers and held that policies should not exclude COVID-19-related business interruption losses.

While the ICA seeks to appeal against the decision, it’s important to consider whether your business has the team in place to support the potentially significant increase in claims volumes that many are anticipating as a result of the court’s decision.

Australia is moving on with life in a new ‘covid-normal’ world, but many insurance professionals are cautious about leaving secure employment due to the uncertainty around future restrictions that may result from coronavirus outbreaks. Insurance is already a candidate short market, and this caution is making it difficult for many businesses to hire from the small pool of ‘active candidates’.

What is a candidate short market?

The term implies there is a low number of qualified people available to fill job vacancies. Hiring conditions become extremely competitive and businesses are introduced to a multitude of challenges, including:

• Candidates expecting salaries that are too high
• Candidates who refuse to relocate
• Candidates being offered multiple roles from different companies
• Candidates lacking the right skills
• Candidates who are overqualified

Why is the market short on candidates?

Formerly, the employment market has relied on international talent to assist in filling vacant roles. Now that borders have closed, hiring managers are restricted to searching through a smaller, local talent pool. In addition to this issue, means to migrate international talent may also decrease as unemployment rates push the government to prioritise local employment.

In an industry that is highly competitive, and people-based, businesses realise that talent is one of their greatest drivers of success and have become better at retaining their employees. Where businesses have made talent management a strategic focus, their employees have benefited from investments in the development of their skills, knowledge, and abilities. As a result, employees are loyal and less willing to leave their employer for a competitor – further reducing the number of job seekers in the market.

Employee loyalty has grown stronger over the last year during the pandemic. Employers who have supported their employees through the pandemic have created an increased sense of security for their employees. This sense of security is heightened by the harsh reality that many people had lost their jobs due to the pandemic. It feels safer to stay with an employer who had supported them during the pandemic than move to another employer where that sense of security and trust has not yet been formed.

Another major factor impacting the insurance job market is that there is a lack of university education for roles in the insurance industry. With that, there are fewer people who make a conscious choice to pursue a career in insurance.

In an industry, like insurance, where there is an aging workforce, this becomes significantly more problematic. As senior managers retire, businesses scramble to fill those roles through means of promotion or an arduous search for talent in a candidate short market.

During the pandemic, essential business roles like underwriting and claims remained the same as pre-pandemic and continued business as usual. Redundancies in broking were barely seen while vacancies continued to remain evident.

What should businesses do in this market?

In a candidate short market, generally, there are more jobs for candidates to choose from. This results in businesses competing for candidates to fill their vacancies. Businesses need to engage their employees to ensure they don’t lose the talent they already have while reassessing their recruiting processes to fill open roles.

Businesses need to focus on what the job seeker is looking for. But rather than driving up salaries, employers should consider more sustainable benefits to win candidates and retain their talent. Many professionals are drawn to strong training and development opportunities, a healthy work-life balance and roles that offer defined career paths.

Businesses should also reduce friction in their recruitment processes to accelerate the process. Taking too long to act on applicants and rescheduling interviews too many times could mean losing the candidate to another employer.

Another option is to look at candidates from alternative talent pools or markets. It can be useful to look at candidates which offer transferable skills. Fuse’s Future Insure Graduate Program was created to provide an entry pathway into the insurance industry for graduates; many of whom had never thought about it as a career option before. Future Insure is designed to source graduates for insurance companies based on cultural fit and technical abilities. Hiring graduates offers a multitude of benefits to businesses which can be explored here .

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How can Fuse help you?

Fuse Recruitment partners with our customers to source high-quality talent with the right culture fit for their businesses. Whether it be permanent, temporary or graduate recruitment, our sector specialists take care in understanding the needs of our customers and tailor a recruiting service accordingly.

The infrastructure to source and recruit suitable graduates is often absent in mid-sized organisations such as those in the insurance industry. Our graduate program sources high-quality graduates on behalf of our customers, providing them with a high-quality talent pool and attracting a young generation into the industry.

We have a well-developed understanding of the technical requirements of each role and the dynamics of the market. With our customers’ success in mind, we’ve built a reputation through consistent delivery of valuable candidates for businesses in the insurance and wealth management industry.

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As a specialist in the insurance market, Fuse is well placed to support your business and respond to any temporary and /or permanent resourcing needs that you may have to most effectively manage any changes in the market, or business and economic environment, off the back of COVID-19; or any increase in claims that may flow into your business as a result of the BI court ruling. If you would like to learn more about Fuse and how we can partner with your business to help you achieve your business objectives through talent suggestions, please contact us via the form on this page!