Brokers tell us their Number 1 challenge for 2024

Fixing the labour shortage plaguing Canada’s P&C insurance industry is officially Job 1 for the broker channel, Canadian Underwriter’s 2024 National Broker Survey shows.

Failing to do that, survey respondents say, puts brokerages at risk of sustaining collateral damage in the competitive war to find — and keep — qualified talent. The CU survey is sponsored by Sovereign Insurance.

It’s actually not just a broker story. Or even a Canadian story, Traci Boland, president of the Insurance Brokers Association of Canada, reports.

“I don’t think it’s just a national crisis that we’re going through right now — it’s international,” she tells CU. “I just returned from Mexico City, where I was representing Canada at the World Federation of Insurance Intermediaries. It was one of the topics discussed, and every country around the table has the same issue….

“I don’t want to think that this is going to be the way it is forever. Our business is very cyclical. So, I’m hoping this is one of the things that does come around in the end. It’s hard to say, because it’s not just insurance. The entire world is feeling this. I don’t know what the actual final answer is to fix this, but I’m hoping that it does settle down in the next couple of years.”

Still, the current situation sounds pretty desperate. Here in Canada, CU asked more than 200 brokers to choose the most urgent among 13 different ongoing challenges over the past five years. Among them, the ailing Canadian economy, the seemingly endless hard market, NatCats, M&A consolidation, and the perennial growth in Canada of the direct-to-consumer distribution channel.

Talent acquisition and retention topped them all, selected as 2024’s Number 1 challenge by a whopping 69% of 211 brokers who answered the survey. It’s the first time this challenge has topped the list since the survey’s launch in 2016.

Huddled away in a distant tie for second place, both at 54%, were: 1) economic issues such as interest rates and inflation; and 2) the growth of the direct-to-consumer market.

Running close behind is the omnipresent hard market (53%), which dominated as brokers’ greatest single challenge throughout the pandemic in 2021-23.

But not this year.

In 2024, talent is slipping in and out of brokerages’ hands like running water, survey respondents tell CU. Of the 62 broker principals answering our survey, 69% say the biggest challenge for their own businesses is “finding qualified talent.” By contrast, concerns about the price demands of their clients in tightening auto and property markets is a distant second, at 52%.

It’s not just finding new people, and training them, and onboarding them — it’s keeping them, broker principals report.

“The percentage of loyal employees has dropped considerably over the last three years,” says one leader in a large Canadian brokerage with more than 31 years of experience. “We train them, reward them, incent them, listen to them, etc., and they still leave. Always looking for greener grass and the next best thing.

“The cost of turnover and chasing salaries is overwhelming, not to mention very hard on culture.”

Urgency to find qualified brokers is mirrored in survey results of the 62 brokerage principals across the board, whether male (68%) or female (64%), or in small (fewer than 20 employees), medium (21-99 employees) or large brokerages (100-plus employees). Regardless of the brokerage’s size, principals’ responses all range between 68% and 75% — all Number 1.

Younger brokerage principals, those with fewer than 16 years in the business, feel the squeeze the most. Eighty-six per cent of them say finding and keeping talent is their single biggest challenge. In contrast, 70% of broker principals with between 16 and 30 years in the business report being stymied. And of those with more than 31 years in the business, 68% say it’s been a tough slog to find and keep people.

 

This article is excerpted from one appearing in the April-May 2024 print edition of Canadian Underwriter. Feature image courtesy of iStock.com/deepblue4you

 

Watch this space: Canadian Underwriter hosted a webinar on recruiting issues. Stories from that session will appear here throughout the week.