The insurance industry is a great place to build a career. Insurance is a consumer staple, so it's not subject to the booms and busts that affect trendy products and services. In fact, during the most recent economic downturn, the insurance industry was actually adding jobs and hiring more people.
But what kinds of job can you expect to get if you start an insurance career? What kind of work will you be doing if you're an insurance broker, an insurance adjuster, or an underwriter? And, importantly, how do you get those jobs?
Insurance Industry Jobs: The Big Four
When people think of insurance jobs, they might picture someone in an ill-fitting suit spending all day making cold calls to sell insurance products. But the insurance industry is so much more than that. And it's also known for its job mobility, so it's not uncommon to take on different roles throughout your career.
Here are the insurance industry's core jobs, the ones most people think of when they talk about working in insurance.
Lets start with your friendly neighborhood insurance broker. Brokers are essentially insurance salespeople and the middle-men who monitor and facilitate the whole insurance process.
If a policyholder has any questions about their coverage or problems with their policy, they normally call their broker first. Brokers also reach out to existing customers when a new product becomes available that might be a good fit for them.
As an insurance broker, your job is to attract clients, build and maintain good relationships with them, and help them find the insurance product that would be the right fit for them. If your client has to file a claim or has any questions or concerns about their insurance policy, you'll be the one to handle it (see What Is an Insurance Broker? to learn more).
How to Become a Broker
While you don't need a college degree or industry experience to become a broker, you will have to be certified. The certification process varies across jurisdictions, but most of them involve a graduated licensing program with three levels:
- Level 1 – Getting your Level 1 license allows you to work at an insurance brokerage and sell insurance. Getting certified usually involves passing a multiple choice test on the basics of the most popular insurance products, insurance law, your responsibility as a broker, and so on.
- Level 2 – With a Level 2 license, you can sell insurance without the supervision of a senior broker, which gives you the flexibility to become self-employed and build your own client list. The Level 2 licensing exam tests your knowledge of more complicated products, like sureties, marine insurance, commercial insurance, and liability insurance.
- Level 3 – A level 3 license lets you run a brokerage or be a nominee responsible for all the brokers working under you.
Insurance agents are pretty much the same as brokers: they do the same job and have the same licensing requirements. The only difference is that they don't work for a brokerage that represents many insurance companies and sells their products. Instead, they work directly for an insurance company and sell that company's products.
As an employee of a large insurance company, the advantage of working as an agent is that you will be more likely to get great training and benefits. The disadvantage is that you won't have the opportunity to build your own client list and use it to transition smoothly into self-employment (to learn more about agents and their role, see Insurance Agents: What's the Point?).
If agents and brokers are the front-line salespeople, underwriters are the back-line. Underwriters don't interact with the clients but they perform many of the services that make the salesperson's job possible.
Underwriters generally perform three tasks:
- Risk Selection – Insurance is a business, and nobody goes into business to lose money. Risk selection means looking at a variety of information to select the piece of business that is most likely to be profitable for the insurer. This usually means picking the least risky business to insure.
- Rate Making – Ever wonder how your insurance premiums are determined? The underwriters set insurance rates based on the applicant's risk levels and some standards they have to conform to (learn about the kinds of things underwriters consider in How Insurance Companies Calculate Your Home Insurance Premiums).
- Policyholder Services – This means issuing insurance quotes and processing policy changes, cancellations, and renewals. This paperwork usually makes up most of an underwriter's typical work day.
How to Become an Underwriter
Because underwriters are not client-facing, they don't need to be certified or hold a valid insurance license. That being said, most underwriting positions will require at least a college diploma. There are also courses and professional designations for underwriters that would be helpful if you are looking to advance in this industry.
The other major player in the insurance process is the claims adjuster. When a policyholder reports a claim to their insurance company, the insurer will assign an adjuster to the case. They are tasked with investigating losses, determining the amounts lost, and deciding how to settle a claim.
Some adjusters work as staff adjusters for an insurance company, while others go at it on their work. These independent adjusters can open their own adjusting firms and land contracts to adjust claims for insurance companies.
How to Become an Adjuster
Just as it is with insurance salespeople, the licensing usually involves a graduated scheme with three levels. And like those, a supervisor has to sign off on a Level 1 adjuster's work, while a Level 2 and 3 license will give you more independence.
Other Insurance Industry Jobs
Agents, brokers, underwriters, and adjusters are the jobs that usually come to mind when thinking about insurance careers. But there are plenty of other positions that provide crucial support to the insurance process.
Actuaries are those who assess risk and manage insurance policies. They act as consultants to the insurance companies, helping them set rating standards, construct mortality tables, and manage the risks of the portfolio they write.
This is a job that requires daily use of probability calculations, financial theory, and computer-aided statistical analysis. There is no official licensing requirement, but given the complex tasks involved, most actuaries have studied actuarial sciences in their post-secondary education and are trained and tested extensively since they play a crucial role in ensuring the profitability of an insurer.
Yep, we're still talking about the insurance industry. Ever wonder what the insurance company does with the premiums you pay them? It doesn't get tucked under a mattress: they invest it.
Insurance companies have access to large amounts of incoming money from premium payments. And while they are legally required to hold some in cash to pay out claims, they are free to do as they please with the rest. So naturally, they try to grow it.
Many insurance companies maintain in-house investing departments to generate profit from this surplus. So, investment analysis, portfolio managers, and other financial experts are an important part of an insurance company's activities.
Qualifications and prerequisites will depend on which role you intend to pursue. Typically, you'll need some investment experience alongside a relevant post-secondary degree.
Insurance polices are, first and foremost, legal contracts. While the terms of the policy are generally set by underwriters or other insurance professionals, they are all done in concert with lawyers who ensure the terms are fair and defensible in a court of law.
Litigation is a large part of the insurance industry. Insurers will almost always have an in-house legal department or a network of lawyers at their disposal to defend either themselves, their liability clients, or to subrogate (sue a party on behalf of their clients).
This provides plenty of opportunities for lawyers, paralegals, and other legal professionals to either find work in the insurance industry or to specialize in assisting and representing insurance companies.
Lawyers working in the insurance industry need the same education and qualifications as other legal professionals. They must pass the bar exam and be licensed to work in their jurisdiction.
And of course, no business can run properly without administrative staff making sure everything gets taken care of in an efficient manner.
Every insurance brokerage, adjusting firm, and insurance company has a clerical and admin staff to handle office management, reception, bookkeeping, paperwork, human resources, and all the other day-to-day activities that must be taken care of so the business can accomplish it's primary tasks.
Qualifications vary based on which role you are taking on. Some may have industry-specific accreditation programs for those who wish to move up in their chosen role.
Insurance Careers: More than Meets the Eye
As you can see, the insurance industry goes well beyond the insurance brokerages you see on nearly every downtown corner. It's a vast industry and if you're interested in being part of it, there's almost certainly a job that's a good fit for you.