The quality of talent entering the insurance industry is at an all-time low, according to the latest Skills Survey from the Chartered Insurance Institute (CII).
Members' opinion of the calibre of industry entrants has reached its lowest level since the report began.
Just 8% said they believed new entrants were "very well" equipped in terms of basic literacy and numeracy.
Furthermore, the proportion of members that consider "education serves financial services well" has fallen from 54% to 49%.
Nearly three-quarters (73%) of the 2,300 CII respondents identified skills gaps in their organisations, with service quality, increased talent expenses and the inability to achieve growth named as the top three problem areas.
However, brokers reported an improvement in skills of 5%, while 67% of companies across the board - a drop of 10% since 2011 - reported a skills shortage, the lowest proportion since the survey began.
And the report found that the lack of employee skills in general insurance has a direct impact on the fortunes of insurers and brokers.
Detrimentally
Daniel Pedley, CII public affairs manager, commented: "For the first time we delved into the impact of these shortages and found quality and service standards had been detrimentally affected, which offers food for thought."
The survey found that the number of insurance businesses offering internships or work placements fell by 2% year-on-year, while companies definitely willing to take on an apprentice (41%) has remained static since 2011.
And Mr Pedley added: "This suggests there is a disconnection between what general insurance firms are trying to achieve by appealing to the best talent and what they are actually achieving in reality."
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