Operating & Financial Review
People – retaining, motivating and building skills
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We recognise that the success of Amlin is dependent on our ability to attract, develop, motivate and retain talented staff. We believe that our intellectual property and competitive advantage resides in our employees and that there is a strong correlation between effective people practices and shareholder value. Strategically our ambition is to become “the place to work” in the industry, thereby helping us to retain talent and attract new talent when and in areas that we need to.
In managing our people, our objective is to create a strong alignment between the Group’s Vision and goals, shareholder value and employee interests. We aim to sustain, and where necessary raise, the performance of the business by developing staff to their full potential, by motivating staff appropriately and by planning ahead so that we are capable of properly addressing succession issues.
Employee profile
Amlin employed a total of 620 people at 31 December 2006 and the number of new staff joining the Group during 2006 was 93. Following the establishment of Amlin Bermuda at the end of 2005 when a team of four underwriting staff were transferred from London to Bermuda, the operation at ABL has expanded to 14 employees, 8 of whom are local Bermudians.
Continuity
Underwriting expertise and a consistent approach to underwriting risk management and control is critical to the success of Amlin, making the retention of skilled and experienced underwriters a business priority. Our 48 senior underwriters have on average over 21 years’ experience in the insurance industry andover 12 years’ service with the Amlin Group.
For the fifth year in succession we achieved our goal that voluntary turnover, excluding retirements, of our senior underwriters is below 10% per annum and our overall employee turnover below 15%.
Employee turnover and experience
In fact, 2006 turnover of senior underwriters and all employees was 4.35% and 12.62% respectively and the turnover of senior underwriters has been less than 5% for each of the past six years.
Further work has been undertaken to update and refine the Group succession plan which enables us to take a more planned and strategic approachto the resourcing and development of key staff. The plan identifies key roles and individuals, reviews possible areas of risk and identifies contingencies and successors both within and outside of the Company.
A key initiative in 2007 will be the design and implementation of leadership development and talent management programmes to meet the needs of the Group succession plan.
Diversity and flexibility
Amlin is proud to be an equal opportunity employer and we aim to ensure that the recruitment, promotion and development of staff is based on their suitability and competency for the role. In April 2006, in preparation for the new age discrimination legislation and also to allow employees to continue employment with Amlin beyond the age of 60, Amlin raised the normal retirement age for employees from 60 to 65. Approximately 3% of employees are currently over the age of 60.
We believe that work /life balance is important to our staff and helps improve performance through increased job satisfaction and reduced absenteeism. Our flexible working policies apply to all employees across all parts of the business (subject to local differences in Bermuda) and include:
- Part time working;
- Job share;
- Two weeks paid paternity leave;
- Parental leave;
- Sabbatical leave; and
- Home working.
At the end of 2006, around 4% of employees regularly worked from home in addition to the 50% of employees who can work remotely. The number of staff with flexible working arrangements across the Group now stands at 9%, compared to 4% at the end of 2005. Sabbatical leave also proved popular throughout 2006 with 3% of employees taking advantage of the sabbatical leave entitlement.
Age, work status and disability
Performance management
In addition to the day-to-day management of employees, Amlin undertakes formal reviews of individual performance through two means: a detailed business class review for each senior underwriter which includes an assessment of an underwriter’s ability to manage a portfolio of risk and to adapt to changing business circumstances; and performance and development reviews for employees. Both are intended to ensurethat we have the right skills in place and that we focus training and development where it is needed.
Well structured incentive arrangements also play an important part in performance management. While reward systems need to pay our staff fairly and competitively against the market they are also designed to provide high reward for high performance. For example, the Company’s Capital Builder Long Term Incentive Plan is designed to retain and reward the long-term commitment of key underwriters by allowing them to build personal capital over a sustained period of success if, and only if, they exceed demanding targets to help the Company achieve superior returns on capital. For senior management and others who are not underwriters, incentives are performance related with a greater proportion being driven by return on equity the more senior the employee, as the Company considers return on equity to be the primary driver of shareholder value.
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