Online Career Center: Preparing for a Career in Finance

II. Career Paths in Finance

C. Insurance

The insurance industry is a trillion dollar business that employs over two-and-a-half million people in the United States alone. In the coming years, as the population ages and wealth grows, the demand for insurance professionals will increase dramatically.

Careers in insurance involve helping individuals and businesses manage risk by protecting them from catastrophic losses and by anticipating potential risk problems. Insurance professionals help clients understand their insurance needs, explain their options to them and help them purchase appropriate insurance policies.

Alternative positions in insurance include underwriting, sales, asset management, customer service, and actuarial services.

Personality Traits and Skill Requirements. A typical job in the insurance agent/sales area would require the following skills:
1. People Skills: High
2. Sales Skills: High
3. Communications Skills: High
4. Computer Skills: Medium
5. Analytical Skills: Medium
6. Ability to Synthesize: Medium
7. Creative Ability: Medium
8. Initiative: High
9. Work Hours: 40-60/week
Positions in the more analytical fields such as in claims or actuarial services would require less in the people skills/communications area and more in the analytical/computer skills area.
Key Career Areas
1. Actuary. Actuaries use their analytical skills to predict the risk of writing insurance policies on property, businesses and people's lives and health. Actuaries are a crucial part of the insurance process because they use statistical and mathematical analysis to determine the risk of providing coverage. To perform effectively, actuaries must be informed about general societal trends and legislative developments, which may affect risk. Actuaries can work either within insurance companies or for government, pension planning organizations, or third-party advisors.
2. Agents and Brokers. Agents and brokers advise people and organizations on how to protect valued items by selling customers insurance contracts. An understanding of insurance contracts is essential. A career as an agent or broker can be financially rewarding. This work is highly time-flexible, requires some background in business, and requires effective people skills.
3. Claims Adjusters. Adjusters negotiate insurance claims for people that have experienced a loss. Adjusters are responsible for reaching claim settlements that are fair to all parties. Success in this position requires resourcefulness, tactfulness, and effective people skills. Some adjusters work in the field, while others work out of an office.
4. Service Representatives. Service representatives are the link between insurance agents (who sell insurance policies) and insurance companies (who write the policies). Field representatives must be good listeners and communicators. This position requires a thorough knowledge and understanding of company products and an ability to establish good rapport with those working for your companies.
5. Loss Control Specialist. A loss control specialist is responsible for keeping accidents and losses to a minimum. Loss control specialists visit factories, shop floors, and businesses to identify potential hazards and help to eliminate them. In the health insurance area, loss control specialists might work with an organization to promote preventive health care in the workplace or to limit exposure to certain types of ailments. This work requires an understanding of safety management and/or engineering. A combination of a technical major and a business major would be outstanding preparation for this job.
6. Risk Manager. A risk manager is employed by an organization to help identify the risks that it faces and to make recommendations for dealing with these risks. The recommendations may include the purchase of insurance, adoption of precautionary operating procedures, and presentations to upper management. Valuable skills include knowledge of the insurance industry and of business practices as well as skill in making presentations to upper management.
7. Underwriter. Underwriters decide whether to provide insurance to applicants seeking coverage. An underwriter evaluates an applicant's exposure to risk and decides whether an applicant meets an insurer's standards. An underwriter may also become involved in setting prices for insurance applicants.
Salaries. The Bureau of Labor Statistics reports salary ranges in the insurance industry as follows:
Actuary: $28 to $65 thousand
Agent/Broker: $14 to $58 thousand
Claims Adjuster: $24 to $42 thousand
Underwriters: $25 to $61 thousand
Suggested Coursework. Careers in insurance are concerned with the management of risk and exposure to loss. Courses relevant to a major in risk and insurance would include the following:
1. Strongly recommended:
  Corporate Finance
  Advanced Corporate Finance
  Financial Institutions
  Management of Financial Institutions
  Risk Management and Insurance
  Business Risk Management
  Investment Analysis and Portfolio Management
  Derivatives
  Money and Capital Markets
2. Recommended:
  Investment Banking & Financial Intermediation
  Market Microstructure and Trading
  International Corporate Finance
  Corporate Restructuring
  Taxation and Management Decisions
  Financial Statement Analysis
  Corporate Financial Reporting
3. Other Suggested Courses:
  Decision Analysis
  Corporate Strategy
  Advanced Marketing Strategy
Useful Professional Certifications
Chartered Life Underwriter (CLU)
Chartered Property Casualty Underwriter (CPCU)
Chartered Financial Consultant (ChFC)
Certified Public Accountant (CPA)
Financial Risk Manager (FRM)
Chartered Financial Analyst (CFA)
NASD Exams (Series 7, 63, etc...)
Internet Resources
A.M. Best Company
American Academy of Actuaries
National Association of Professional Insurance Agents
Insurance Information Institute
American Institute for Chartered Property and Casualty Underwriters
American Council for Life Insurance
National Association of Insurance Commissioners
Risk and Insurance Management Society
Health Insurance Association of America
Insure.Com
Job Listings
Insurance Firm Listing
Ultimate Insurance Jobs

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