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An interview from Acre's Kate O'Rourke for Insurance ERM, published on 04.03.2024, Original Source: Insurers catch up on the sustainability hiring boom, Author: Joshua Geer
Demand for staff with sustainability and ESG experience is at a high, according to recruiter Kate O'Rourke. She talks to Joshua Geer about what the market is looking for
With the sustainability wind finally hitting insurers' sails, and showing no signs of dropping, firms are going to need the personnel to steer the ship.
Demand for environment, social and governance (ESG) professionals is only going to increase, according to Kate O'Rourke, London-based head of banking and insurance at recruitment firm Acre, which specialises in ESG and sustainability hiring globally.
She spoke with InsuranceERM to discuss the current trends, challenges and emerging opportunities arising from this green employment shift.
Insurance behind others
O'Rourke highlights that the state of the ESG recruitment market in insurance is directly reflective of the industry-wide commitment to sustainability, something that is generally considered to lag behind other financial services.
"Insurance as a whole is definitely behind the rest of the financial sector in terms of how much it values and commercialises sustainability overall," she says.
While there is of course a "top cohort" of insurers who have sustainability ambitions and have ESG deeply rooted across their functions, O'Rourke says there are many others who have only made their first sustainability hire in the last two years.
Some firms have a strong desire to build sustainability teams to enact positive change; others just see it as a compliance exercise
Nonetheless, O'Rourke is positive that this is set to change, as sustainability goes up the value chain, driven up by factors such as increased regulation as well as pressures from consumers and investors.
"When I spoke with chief risk officers, chief strategy officers and chief underwriting officers about sustainability a couple of years ago, they told me there is lots to do on sustainability, and it's on the to-do list but not a priority," she says.
But a lot of these people have come back in the past six months, telling her that sustainability is gaining traction and that relevant hires are now needed.
Despite the tide turning, O'Rourke explains there is still disparity in the motivations for getting ESG professionals through the door. While some firms have a strong desire to build sustainability teams to enact positive change, others just see it as a compliance exercise.
Demand for different roles
O'Rourke explains the traditional sustainability roles that sit within an insurer's corporate structure are highly sought-after. These types of positions would include head of sustainability and chief sustainability officer positions, who are often used as central resources on ESG matters and are required to work across the company.
In addition, there are new ESG roles in specific departments, "particularly in underwriting", according to O'Rourke.
Examples of these roles are "responsible underwriter" or "climate transition lead" , which require employees to consider portfolios beyond purely commercial interest.
O'Rourke explains: "A new role type is emerging that intersects between sustainability and underwriting to address and aid the green transition." For example, she notes the head of an energy underwriting book may have an expanded role looking at climate transition to also ensure the portfolio is progressing towards net zero.
She adds these positions do not just focus on "dirtier lines of business" and consider all types of underwriting.
Roles like this require extensive engagement with clients, says O'Rourke. In accordance with that, there is increased demand for ESG professionals in insurers' risk advisory divisions and among brokers to help clients with sustainability risk and then sell the relevant protection.
Attracting ESG talent
Like in the broader recruitment market, O'Rourke says the sustainability recruitment pool is tight and competitive.
One major reason why insurers may struggle to find the sustainability employees they need is due to "unrealistic expectations" of what it costs to get an experienced hire, she says.
A lot of sustainability hires are having to come from other industries.
"In some cases, insurers have priced a head of sustainability role at £70,000-80,000 ($89,000-101,000) a year, but for that salary, you would struggle to get someone with more than five years of experience."
Another factor contributing to a tight job market is sustainability practices in insurance being less mature than other financial sectors.
Employees who have a "blended skillset" of insurance and ESG knowledge that firms want are hard to come by, because the talent pool is still not deep enough, she explains.
As a result, a lot of sustainability hires are having to come from other industries, who then assist insurance professionals in corporate and commercial functions, says O'Rourke.
ESG disclosure hires
The amount of ESG reporting that insurers must do is at an all-time high, and this is only going to increase as regulators tighten the screws on firms' sustainability practices.
As a result, O'Rourke notes a "strong proportion" of the ESG staff she places are to aid insurers with reporting burdens, and she predicts the number of these hires will increase.
O'Rourke says employees who fulfil these positions are expected to have "strong sustainability disclosure experience" and be familiar with multiple reporting standards and legislation, such as the Taskforce on Climate-Related Financial Disclosures and the International Sustainability Standards Board, to name a few.
The amount of reporting insurers have to do and how closely this sits to finance and sustainability is "a continuous topic of conversation" in my communications with insurers, says O'Rourke.
