The first six months of 2012 have been good for Lloyd's of London. In fact, the profit of £1.53bn is the best first half for over five years, which is particularly welcome after a difficult 2011 beset with heavy claims from natural disasters. Staff driving the profits in the various syndicates are realising their worth, competition is heating up and salaries are heading northwards.
This year has been particularly strong because of a “benign claims environment”, according to the chairman of Lloyd's, John Nelson – total net claims stood at £4.58bn, a fall of almost a third on 2011.
Staff costs have, understandably, increased this year coming in at £45.4m compared to £40.6m for the same period in 2011. Recruiters focusing on the sector are reporting a spike in demand for underwriting, claims and operational staff and a rush for the best staff has necessitated firms to dig deep.
“We’ve been doing less contingency search and more headhunting than ever in the Lloyd's market,” says Andy Edwards, head of insurance at recruiters High Finance Group. “New syndicates are actively targeting the right talent across claims, underwriting and operations so they have the right people in their shop window to attract clients. Salaries have risen rapidly in the last six months.”
This is not entirely surprising. Of all the sectors in insurance, Lloyd's was highlighted as facing a skills shortage in the latest survey by the Chartered Institute of Insurance. Job-hopping had become a problem, with some brokers complaining of applicants with “lots of jobs; too many jobs” on their CV.
Edwards says that they placed a head of operations who was earning £90k in his previous position into a role that paid £120k. Teams of underwriters are also being hired, often on salaries of up to £200-250k with the potential for 50-100% bonuses.
Recently, for example, ANV hired a team of three from Travelers as it expanded into the Accident & Health market, specialist Lloyds (re)insurer Chaucer hired Alex Campbell as a class underwriter for international facultative business and at Lloyds bolstered its liability, credit bond and political risk teams with two new hires.
“Even in claims six figure salaries are becoming much more prevalent,” says Edwards. “There’s something of a merry-go-round; as new entrants poach key talent, more established firms are making moves to replace them. It’s a very candidate-led market.”