22,000 Possible New Jobs for the Insurance Sector
Back in June we wrote a blog post on how 2000 jobs are going to be cut due to the competitive UK insurance market. However, according to analysts from PwC, sustainable and well regulated growth in the UK financial services market could generate 22,000 more jobs by the year 2020. PwC’s last report (titled: Where next? Assessing the current and future contribution of the UK Financial Services sector) said that this kind of growth is possible. The biggest obstacle to growth is incompetent regulation – this growth will be impossible without a strong regulatory scheme. The market and economy conditions will also have to keep up in order to support the growth.
It has been estimated that jobs in the insurance industry will account for 47% of a possible 47,500 new positions across the UK financial services sector – an average of 33% growth per year by the year 2020. The report also mentioned that a further 218,000 jobs could be created in the wider economy across the UK. If these numbers materialise, the UK could be in a much better position in the future. If the economic climate is favourable, the UK’s gross domestic product (GDP) could be between 2 and 3% higher by 2020 if the financial services’ gross value added (GVA – contribution to wider economy) rises by £50bn between 2013 and 2014 and 2020/2021. On the other hand, if the financial service growth weakens and if its GVA contribution rises by £9bn, the UK’s GDP may only rise by 0.2% and create 12,000 jobs by 2020/21.
Jonathan Howe, UK insurance leader at PwC, said: “Our analysis shows the important contribution the UK insurance sector makes to not only the financial services sector, but to the whole of the UK economy. A thriving insurance sector is essential to both the UK economy and to individuals, yet it is important that this is supported with a sustainable and stable regulatory regime. The financial crisis brought to light many unsustainable practices in banks and providers of financial services that has highlighted the need for better regulation. The challenge for insurance policymakers is the provision of effective UK and EU regulation that limits the likelihood and impact of any future crises, while allowing both the insurance sector and the wider economy to prosper.”
James Savery, 22 July 2013