Has Level 5 shrunk New Zealand’s insurance broking talent pool?

Has Level 5 shrunk New Zealand’s insurance broking talent pool? | Insurance Business New Zealand

Insurance News

Has Level 5 shrunk New Zealand’s insurance broking talent pool?

Brokers facing “issue with bringing through people” under new regime

Insurance News

By
Terry Gangcuangco

“There is an issue with bringing through people.”

That was the assertion made by Insurance Brokers Association of New Zealand chief executive Melanie Gorham (pictured above) during an interview in which she referred to hiring woes within the insurance broking sector under the country’s new regulatory regime.

Gorham – who’s been on both sides of the insurance fence, having worked at the likes of Marsh and QBE – told Insurance Business: “I think, overall, in the FAP (financial advice provider) space and for financial advisers, the fact that you need to be [New Zealand Certificate in Financial Services] Level 5-qualified makes it harder.

“The example that I give is, insurers and brokers have always fished from each other’s ponds. Now, with the Level 5 requirement, an insurer can still fish from the broker pond, no problem. But for the broker to then take on one of the insurers’ employees – they typically won’t have a Level 5 – you’ve got that period of downtime.”

Barrier to entry

Sharing the same sentiment is Crème Insurance director Mark Mallard (pictured below), who believes the talent pool for insurance brokers in New Zealand has become smaller because of the required qualification.

“It’s a real barrier to getting new staff and makes the pool of potential staff extremely small,” he told Insurance Business. “In the past, you can go to underwriters and hire them to come and work in your business – people with experience and things like that.

“Now, most underwriting companies you can’t hire from because they do not have Level 5 qualifications, which means you can’t even talk to a client for three to six months until they are qualified, which is a long time without them working with clients.

“I have a real concern about the Level 5 requirements for hiring people.”

Mallard, however, clarified that he’s not looking to have the requirement removed. In his view, there needs to be certain accommodations for highly experienced people in the industry.

“It’s a very small market of people who have experience and it’s not like, if you want to get someone with experience, you can go out and hire a normal person off the street,” he said. “But then you can’t even hire someone who’s worked in the industry for the last 20 years.

“That’s a concern. I’m not saying that we need to remove the Level 5 qualification; what I’m saying is we need to work to make sure that experienced and good people aren’t negatively affected by it.”

At the same time Mallard, who said he believes in knowledge, recognised that insurance is a knowledge-based business.

“But there are people who are senior in underwriting companies that have worked in the industry for 25 years that I could not go and hire today, and their knowledge is impeccable,” he pointed out. “Surely, if they’ve worked for 25 years, they can get an exemption to go and sit their papers while they’re overseen by somebody else, which we’ve been told is happening but hasn’t happened yet.”

The brokerage owner went on to reiterate how “very small” the current talent pool is amid the regulatory environment that now exists.

Gorham, meanwhile, added: “A lot of people are qualified, but there’s just that perceived barrier because you’re not Level 5… It is definitely seen as an impediment. And the labour market here, in general, is a problem.”

Mallard also told Insurance Business: “I don’t have a problem with training up people and making sure that my staff have the requirements and all of that – it’s been fantastic. We had a two-year period to do it; it was more than fair, timewise, to let people go and do it.

“That’s sort of what I’d like to see for other people who are already in the business that might want to come into the broking space, is a fair and reasonable timeframe for them to go and do their qualification.”

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