Talent is tight—insurance needs better pay conversations

Insurance managers need new skills to communicate pay decisions and fairness. 

Insurers have always known that compensation is more than base pay, yet the idea of total rewards is now becoming central to how the industry attracts and keeps talent. Employees today want a more human, transparent and contextual understanding of what they receive, and why. That shift is forcing insurers to rethink not just the value they offer, but how well that value is explained.

For Markel, the frontline role sits firmly with managers. Amy Fahed, senior managing director for total rewards and HR operations, has seen transparency move from a regulatory requirement to a strategic tool. Salary-range legislation may have pushed the topic up the agenda, she said, but for Markel the intent goes much deeper.

“Total reward has become a strategic lever for Markel.”

“It really goes beyond that regulatory requirement for us; total rewards have become a strategic lever for Markel,” she said, during Intelligent Insurer’s latest virtual panel discussion titled ‘Beyond the paycheck: building trust through pay transparency’. To watch the full discussion, click here.

Fahed noted that while HR teams see reward holistically, “it’s naive to think that employees think of it that way”. Many still equate compensation with take-home pay. That means insurers must get far better at telling the full story including benefits, learning opportunities, wellbeing support, flexibility, and long-term incentives, not just the headline number.

Markel has leaned on clearer annual communications, detailed reward statements and even employee testimonials. Fahed said the latter often carries more weight than a corporate message: “Other employees connect to those testimonials, and I’ve found that to be very effective.”

But even the most thoughtful communication strategy can fall apart if the messenger is unprepared. And this, several panellists stressed, is where insurers are most vulnerable.

Hong-Wha Ling, chief people officer at VIG Re, said many leaders “become nervous when confronted with a compensation discussion”. Some don’t know how to explain the rationale behind decisions; others dread emotional reactions. Fahed agreed, especially when pay adjustments fall short of expectations.

“Leaders often become nervous when confronted with a compensation discussion.”

To address this, VIG Re provides managers with talking tools such as compa-ratio data to help steer conversations towards capability, progression and development, not a transactional tug-of-war about numbers. “This makes it a bit more forward-looking,” Ling said.

Aon’s Dan Fletcher was even more direct: “Managers are now the frontline ambassadors of pay transparency.” They are, he said, the first port of call when employees query salary ranges, Glassdoor comparisons or perceived inconsistencies, yet many managers have never been trained in reward fundamentals, let alone the emotional intelligence needed for these conversations.

Fletcher pointed out that many become managers through technical excellence, not communication skill. Some have never had structured people-management training and simply “don’t have the vocabulary” to discuss equity, bias or market data. With changing expectations and incoming EU rules, he believes insurers have no choice but to invest heavily in building manager capability. Support, he said, must be ongoing: role plays, FAQs, scenario scripts and refreshers, not a one-off workshop. “You want to wrap your arms around them and give them as much support as possible.”

Fahed described how Markel began retraining its leaders months ahead of its cycle, covering basics such as pay philosophy, salary ranges, compa-ratios and how to handle increasingly common questions sourced from online salary comparisons.

Yet the stakes are not just operational. Poorly handled conversations can erode trust even when the underlying structures are entirely fair.

The panel repeatedly returned to the role of perceived fairness. Fahed pointed to data showing employees are “eight times more likely to consider [a decision] fair, even if they don’t agree with the amount” when they understand the context. Markel’s engagement survey also showed that those who feel positive about fairness are twice as engaged as those who don’t.

Fletcher added that sentiment around pay is likely to become more volatile. Inflation pressures persist, expectations are rising, and the EU’s upcoming transparency directive will require insurers to reveal broader data – introducing comparisons employees have never had before. That, he warned, will “increase workloads, increase employer relation queries and require a stronger partnership across HR.” 

“Managers are now the frontline ambassadors of pay transparency.”

For Fahed, transparency means clarity around reward must be managed with care and consistency. “It’s going to be a journey,” she noted, acknowledging that transparency means different things to different employees.

Ultimately, the discussion reinforced that total rewards are no longer just a package – they are an experience shaped by human connection. The frameworks and metrics matter, but often less than the manager sitting across from an employee, explaining a decision with empathy and making them feel heard.

Click here to watch the full panel discussion.

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