Insurance Careers

The insurance industry topped a trillion dollars in 2009. The industry employed over 2.247 million Americans.

Insurance is a staple in our lives. Insurance coverage is an essential element of any sound financial plan. It is a way to balance financial risk. Insurance provides financial protection in case an event threatens your financial stability in the future.

  • Life insurance
  • Health insurance
  • Property and casualty insurance
  • Automobile insurance
  • Rental insurance
  • Long-term care insurance
  • Disability income protection
  • Pet insurance
  • Travel insurance
  • Liability insurance

In addition, there are a number of insurance coverages available for businesses and business owners. Some business-related insurances are product liability, professional liability, commercial property, and workers compensation.

As the industry evolved, professionals with unique qualifications, such as actuaries, statisticians, and lawyers, were drawn to companies to help manufacture profitable insurance contracts. The companies issuing insurance hired general office workers and administrative staff to issue contracts, process claims, and answer questions. In addition, salespeople were instrumental (and remain so) at explaining why insurance protection is needed and how it works. Those positions morphed into modern day professions such as actuaries, underwriters, claims examiners, insurance agents, and account representatives.

Insurance careers are appealing because they pay well, offer job security, and opportunities for advancement. The majority of professionals in insurance work for insurance carriers; however, a number are also employed by insurance agencies and brokerages and other insurance service-related companies.

Given demographic and socioeconomic trends, the insurance industry as a whole is perceived as a growth industry. Throughout the economic downturn that began in 2007, insurance companies shed far fewer jobs than other industries. Some insurance segments even showed signs of slow growth. One of the biggest threats to any job security is automation. The good news for insurance professionals is that relatively few insurance jobs can be replaced by technology, so job security prospects are high.

Many insurance professions offer high degrees of job satisfaction. They provide meaningful work and allow individuals to protect what they care most about. Many insurance careers allow you to be a resource to people in their time of need. Sometimes it is because the person has lost their house to a fire, demolished their car, or is out of work due to an illness. Whatever the precipitating factor, they are in need of help.

The potential negatives about insurance careers are that they tend to be demanding jobs. They typically require someone who is high energy, well organized, and has good communication and analytical skills.

Insurance Careers Introduction

There are over one hundred colleges and institutes of higher education that offer specialized academic training in the field of insurance. Degrees can be obtained at the associate’s, bachelor’s, master’s, and doctorate levels.

In addition to accredited college programs, several societies and professional associations offer certification programs. Candidates must meet job experience requirements, participate in educational courses, and pass a series of exams to become certified. The associations publish extensive materials to help people prepare for the examinations. In addition, there are a variety of independent third-party vendors that offer study preparation courses, training tools, and software.

Qualities of a Good Insurance Professional

Insurance careers are appealing because they pay well, offer job security, and offer opportunities for advancement. In the current economy, it is sometimes difficult to look beyond these things. However, landing a secure job that pays well is not a predictor of how happy you will be in your new role.

Your level of job satisfaction impacts all areas of your life. Before diving into an insurance career, you might want to stop and think about whether it is a good fit with your skills and interests.

The first step in that analysis involves determining what motivates you and what your primary interests and passions are. If you have an interest in helping people achieve financial security, an insurance career might be worthy of a closer look.

The next step is to determine whether your strengths match the qualities of good insurance professionals. The following is a list of some common traits that successful insurance professionals share:

  • Desire. A strong desire to help people achieve financial stability.
  • Self-motivation. Insurance is not easy to sell. The most successful insurance professionals are the ones who are extremely self-disciplined. A strong work ethic and desire to succeed are traits that good insurance professionals share.
  • Good listening skills. Listening skills fall under the radar in many professions, but not in insurance careers. Listening skills are critical to gain an understanding of what a client might need to achieve financial stability in their lives. To determine appropriate levels of insurance protection, an understanding of life goals in necessary. Because it is such a valuable skill, many insurance companies even offer courses to develop listening skills in employees.
  • Outstanding communication skills. Insurance contracts can be quite complicated. Much time is spent educating clients on how the contemplated insurance works. It is important for an insurance professional to be able to communicate the particulars of a product or process clearly and articulately.
  • Ability to assimilate complicated subject matter. Insurance professionals must have a good understanding of the products their companies offer and the governing state regulations.
  • Sound judgment. No two insurance clients have the same situations. They may have a similar need for insurance protection, but their circumstances are different. For this reason, insurance professionals must be able to assess the client’s situation, carefully contemplate the various alternatives available, and draw sound conclusions. Insurance is a long-term commitment. The decisions made at the time of purchase are often not reevaluated until payment of a claim is sought. Insurance professionals must anticipate client needs at the time of claim and use good judgment to ensure that those needs are fulfilled.
  • Detail orientation. The insurance process is a detailed one with a lot of paperwork associated with it. Missing a step or neglecting a form can make the difference between someone having coverage or not. Individuals who are successful with insurance careers are those who pay attention to all the details.
  • Ability to handle stress. There can be a great deal of stress in working with clients, particular those who seek payment from an insurance policy. The client may have lost her home in a fire, her husband may have passed away, or she may have totaled her car in an accident and needs help with her claim. The insurance professional must empathize with the client’s situation and remain calm and helpful throughout their dealings.
  • Good reputation. The quality of your reputation, in many instances, dictates how successful you will be in insurance. If you are known to do right by clients, they will make the valuable referrals that drive growth.
  • Flexibility. One of the things insurance professionals like the most about their careers is the variety of work. Every day is different, requiring insurance professional to pivot from one task or one client to the next.
  • Honesty and Integrity. A good insurance professional puts their clients’ interests above their own. This means guiding clients to make decisions based on their unique needs, and not toward product choices that will generate the highest commissions or profits.

Advantages of Insurance Careers

According to the Bureau of Labor and Statistics, 2.247 million Americans were employed in insurance careers in 2009. Carriers are the most predominant employer among insurance professionals. If not employed directly by an insurance carrier, 39 percent were employed by insurance agencies, brokerages, and other insurance-service-related employment.

Here are some of the reasons so many choose insurance careers:

  • Nobility of profession. Insurance careers provide meaningful work. You help people safeguard their financial future against an unexpected loss. You help them get sleep at night knowing that if something totally unforeseen happens, a resource will be available to offset their losses and provide financial security.
  • Help people in their time of need. Opportunities in insurance careers offer you the chance to help people when they are in a time of need. Sometimes it is after they have lost their house to a fire, demolished their car, or are out of work while seeking treatment for an illness. The clients you deal with are likely to be vulnerable and typically are expectant of monies they feel are owed to them. Most often, they are grateful for good service rendered and have a heightened appreciation for their insurance.
  • Potential for high earnings. Insurance careers can be quite lucrative. Some of the higher paying careers are insurance brokers, who (depending upon specialty) can earn more than $270,000 annually. Actuaries who are responsible for assessing the carrier’s risk have a median salary of $133,000. Insurance sales agents’ earnings can run the gamut; as they are largely dependent upon personal iniative and sales skills. However, the average salary for insurance salespersons is close to $80,000 according to Money magazine.
  • Choice of working environment. The field of insurance offers many career paths. The path you choose could be directly related to the working environment that suits you best. Insurance offers the best of both worlds. If you are highly entrepreneurial, you may enjoy a career as an independent sales representative, broker, or claims examiner. If you prefer the structure of a corporate environment, you may want to pursue any number of careers offered in an insurance carrier’s corporate headquarters.
  • Opportunity for advancement. The world of insurance is comprised of several types of professional disciplines. Once you master one aspect of the insurance process, your value to your employer (and clients) increases. You can then build on that expertise by moving on to another component of the business. Well-rounded insurance professionals, particularly in the corporate setting, advance more quickly and have higher earning potential.
  • Flexibility. Many insurance careers offer a great deal of flexibility. Careers in insurance sales in particular, are extremely flexible. Your success is dependent upon your motivation to help people achieve financial protection. How you go about making those connections— when and where you do it—is up to you. In addition, many insurance carriers are progressive in their employment practices and offer flexible work schedules and flexible work arrangements (such as job shares and telecommuting).

Disadvantages of Insurance Careers

The following are some of the negative attributes of an insurance career that you might want to consider:

  • Difficult to sell. There is an adage that insurance is sold not bought. What that means is that few clients will knock on your door and ask you whether you can offer insurance coverage. Instead, they have to be convinced that it is something that is critical to their overall financial well-being. Many customers have an “it won’t happen to me” attitude and have to be educated about the risks they face. These objections take time, patience, and expertise to overcome.
  • Income can be unpredictable. In times of economic troubles, people look to save money anywhere they can. Unfortunately, in many cases it means reducing their insurance premium commitments. People may refrain from purchasing new policies, or they could even surrender the policies they own. Economic downturns have historically adversely impacted the earnings potential of those working in the industry.
  • Strong reliance on self-motivation. The most successful insurance professionals are the ones that are extremely self-disciplined. They have a strong work ethic, are often competitive, motivated by their mission, and driven to meet the next client’s protection needs.
  • Stress. There can be a great deal of tension in working with clients, particular those seeking payment from their insurance policy. In instances where an insurance claim has been made, the client is typically distressed. They may have lost their home in a fire, a spouse may have passed away, or they could be unable to work as a result of an illness. Insurance sales professionals also cite pressure to meet sales requirements as a main stressor associated with their profession.
  • Complicated subject matter. Insurance contracts are complex. Insurance professionals must have a good understanding of the products their companies offer, the governing state regulations, and what the competition is doing.
  • Detail orientation. The insurance process is a detailed one with a lot of paperwork associated with it. Missing a step or neglecting a form can make the difference between someone having coverage or not. People who are successful with insurance careers are those who pay attention to all the details.
  • Negative perception. Insurance sales people have competed with politicians and car mechanics in many well-publicized lists of the most distrusted professionals. It is a perception that must be overcome before a client is comfortable in doing business with you and referring you to others.

Opportunities for Women in Insurance

The insurance industry needs more women to help promote the importance of insurance protection for long-term financial stability to other women.

Opportunities for Women in InsuranceHistorically, insurance salespeople have been men. In the life insurance industry, for example, is estimated that nearly 80 percent of salespeople are men.

The problem with this model is that it is not effective at closing the insurance protection gap that exists between men and women. Women are a market segment that is widely perceived as underinsured; they own far less insurance coverage than their male counterparts. For example, the U.S. Census Bureau shows that in 2008, over 20 percent of American women of childbearing age—12.4 million—were uninsured.

The statistics for life, disability, and even automobile insurance are not much better. For many societal and economic reasons, millions of women are not making their long-term financial stability a priority.

Many insurance carriers have recognized the need to add more women in leadership positions and have embarked on aggressive recruiting campaigns. They have made an effort to recruit more women, offer greater flexibility, and have created mentor and support programs to see that they succeed.

In addition, various industry organizations and trade groups have taken on the challenge of recruiting women to insurance careers. Organizations such as the Association of Professional Insurance Women and Women in Insurance & Financial Services exist for the sole purpose of providing women with opportunities for professional development and support to advance their careers.

An insurance career may be uniquely well suited to many women because it offers:

  • High earning potential. Careers in insurance can be quite lucrative. In sales positions, where women are urgently needed, the only limits to earning potential are those a woman puts on herself.
  • Noble cause. Women have an opportunity to make social improvements and help other women achieve financial security.
  • Natural markets. It is easy for most women to meet other women and to strike up a conversation. Women are often more comfortable revealing personal details and financial vulnerabilities to another woman.
  • Flexibility. In many insurance positions, the hours and work schedules are flexible. A woman in a sales position can schedule meetings to occur at a time that works best for her clients, herself, and her family.
  • Job security. Even in unstable economic climates, insurance careers offer a degree of job security. Insurance is a major industry and continued growth is projected.
  • Build relationships. Insurance is all about building relationships. It involves listening to people’s concerns, asking personal questions, and finding solutions to their unique issues. Women tend to gravitate toward business people who are interested in a relationship and not just a transaction.

History of Insurance Careers

Insurance, in one form or another, has been around for thousands of years. At its core, insurance is a way to manage or share risk. As primitive people started forming societies, they found ways to share risk.

As early as 4000 BC, Chinese merchants who transported goods through dangerous and accident-prone river rapids found a way to spread their risk. They divided cargo among multiple ships. If one ship capsized, only a portion of the merchant’s goods would be lost.

In 2005 BC, the Babylonian King Hammurabi declared a law to protect the financial interests of traveling merchants. This was the first official recognition of the need for insurance.

King Hammurabi passed a law that absolved merchants from repaying moneys borrowed to fund transportation costs if their goods were stolen. This law transferred financial risk from trader to moneylender. It provided motivation to the moneylenders to take steps to insure the cargo vessels were safe. They began providing guards that accompanied the merchants on their journeys. Lenders recouped the additional security expenses by charging interest that was in direct proportion to the hazard or risk involved with the journey. If a merchant traveled waters that were routinely robbed, he paid higher interest rates. Thus, the art of assessing the monetary value of risk, and charging a premium for that risk transference, was born.

The assignment of financial risk and the resulting insurance protections and products evolved through the ages. Professionals with unique qualifications, such as actuaries, mathematicians, and lawyers, were drawn to companies to help manufacture profitable insurance contracts. The companies issuing insurance hired general office workers and administrative staff to issue contracts, process claims, and answer questions. In addition, salespeople were instrumental (and remain so) at explaining why insurance protection is needed and how it works. Those positions evolved into modern day professions such as underwriters, claims examiners, insurance agents, and account representatives.

These careers and the technical and legal skills they required continued developing informally through on-the-job experience and by training offered by industry associations.

Although some of this country’s oldest insurance companies date back to the mid 1800s, there were no formal educational institutions that offered insurance specific criteria. In 1904, Dr. S. S. Huebner from the Wharton School of Finance and Commerce at the University of Pennsylvania created one of the first collegiate educational programs in insurance. Other colleges and insurance associations followed suit. Now, over one hundred colleges offer insurance-related studies.

In 1909, a group of insurance associations met in Philadelphia to establish education instructional standards for insurance professionals. The Association of Insurance Societies and Institutes of America was formed. Taking on many names over the last one hundred years, the organization under its new moniker, The Institutes, continues to provide insurance education and training today.

In the 1920s, Dr. Huebner developed the first professional curriculum specifically for insurance salespeople. It is now called the Chartered Life Underwriter designation and is offered by the American College.

In 1941, several insurance associations again convened in an effort to establish uniform education standards. The outcome was the establishment of a national college, American Institute for Property and Liability Underwriters. It had the power to award professional designations in insurance now known as the Chartered Property and Casualty Underwriting (CPCU) designation. This designation is given to insurance professionals who pass a series of complex tests regarding insurance laws and procedures. It is known as the gold standard of insurance certifications for those in the property and casualty field.

Since that time, there have sprung a variety of insurance associations offering advanced training and certification in insurance careers. Careers in insurance have gotten more sophisticated and are being transformed by technology. As companies race to automate where they can and increase services to meet changing client expectations and regulatory guidelines, a new generation of highly desirable candidates has emerged. These are technically savvy individuals who can help develop software solutions and re- engineer manual processes.

Last Updated: 04/07/2013

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