The Insurance Industry

Prepared by the DiamondsMary Keegan Bruce PennKathy Rehn Kristin Waiting Glenn Fitze Rose Truglio

Overview and Trends

• Approx. 1800 U.S. companies offer personal and commercial lines

• Function as financiers• Protects the economy against

losses of all kinds• After 9/11/01, stopped writing

terrorist policies

Overview continued...

• Insurers, banks, and securities brokers can merge and cross sell each other’s lines

• More of an investment-management focus

• They are forming strategic alliances, many mergers happening in industry

• Act as large investors in our economy

Job Outlook• Companies seek

tech-savvy candidates

• Internet Sales has reduced need for “Insurance Agents”

• Growth in systems analysts, adjusters, and examiners

ActuariesActuaries• Blood and guts number

crunchers• Determine risks and statistically

render social trends• Must have strong mathematical

reasoning and statistical background

• College Degree a must

Agent or BrokerAgent or Broker• Sell policies

–Personal lines : limitless accounts–Business lines: Fewer customers, larger accounts

• Product Line Knowledge imperative• Great Interpersonal Skills• State Licensing Exam

More careers:Claims AdjusterClaims Adjuster• Negotiate claims• People Skills• No College required

Loss-Control Loss-Control SpecialistSpecialist

• Prevention analysis• Knowledge of safety• College required

Risk ManagerRisk Manager• Advise management• Manage benefit plans• Degrees/Work Experience

Service RepresentativeService Representative• Liaison to public• Product knowledge• College degree req’d

UnderwriterUnderwriter• Evaluates applications and

decides if premium justifies risk.

• College degree req’d

Information Information TechnologyTechnology

• Manage data/information• Computer skills and

experience• Technical degree or

credentials preferred

Typical Salaries/ CompensationA comparison:

0

20

40

60

80

100

120

LowSalary

Avg.Salary

HighSalary

AgentAdjusterActuaryManagerUnderwriterAnalyst

Earnings Statistics

• Weekly earnings of nonsupervisory workers averaged $675 in 2000.

• Median Hourly earnings range from $11.83 entry level office assistant

to $40.23 General Manager of an independent insurance agency.

What’s to Love?

• Growth Oriented– Life insurance– Long term care– Retirement investment– Bonus of work flexibility

• Technological Outlook– Computer aided software

tools– Image processing– Client/server systems– Pen-based computers

Love?

• Industry Extensions– Actuarial Tables– Direct

Marketing– Financial

Planning– Derivatives

What’s to Hate?• No Job is Safe

– Computerization– Consolidation– Competition

• Bureaucracy– Memo everyone– Company policies– No creativity

• “Heartless”– No reimbursement

for AIDS– Loss ratio– Conscience?

Who are they? Top 5 in U.S.A.1. American International

Group2. State Insurance3. Berkshire Hathaway4. Met Life5. Allstate

Top 5 on Long Island

1. Aon Group, Melville2. Treiber Insurance Group,

Garden City3. BWD Group, Jericho4. Marsh USA, Melville5. Allied North America, Jericho

Professional Associations• ALLIANCE OF AMERICAN INSURERS(630) 724-2100 www.allianceai.org

• AMERICAN ACADEMY OF ACTUARIES(202) 223-8196 www.actuary.org 

• AMERICAN ASSOCIATION OF MANAGING GENERAL AGENTS

(405) 840-9393www.aamga.org

• AMERICAN INSURANCE ASSOCIATION(202) 828-7100www.aiadc.org

Wait, there’s more...• INDEPENDENT INSURANCE AGENTS OF

AMERICA(800) 221-7917www.iiaa.org

• INSURANCE INFORMATION INSTITUTE(212) 669-9290www.iii.org

• LIFE OFFICE MANAGEMENT ASSOCIATION

(770) 951-1770• www.loma.org

• NATIONAL ASSOCIATION OF INDEPENDENT INSURERS

(202) 639-0495www.naii.org

• NATIONAL ASSOCIATION OF INSURANCE WOMEN

(800) 766-6249www.naiw.org

There are many, many more.

The College Connection on L.I.Employers prefer college graduates for all

sales, managerial, and professional jobs.The preferred degrees will have a major in

business, economics, finance, or accounting.

The ability to operate computers is essential.

Continuing education is a requirement for most jobs.

Where to go?

• Adelphi• Dowling• Hofstra• CW Post• Southampton

College

• NYIT ( New York Institute of Technology)

• SUNY Farmingdale

• SUNY Old Westbury

• Molloy College

Continuing Education and Credentials•Underwriters

–AU ( Associate in Commercial Underwriting) takes 1 to 2 years combines courses and exams–CPCI ( Chartered Property and Casualty Underwriter) takes ~5 years and 10 exams

•Life and Health Insurance–CLU ( Chartered Life Underwriter)–RHU (Registered Health Underwriter)

• Claims adjuster/Examiner– AIC ( Associate in Claims)– RPA ( Registered Professional Adjuster)– CPPA ( Certified Professional Public Adjuster)– SPPA (Senior Professional Public Adjuster)– ALHC (Associate Life and Health Claims)– FLHC (Fellow Life and Health Claims)

• Actuary– Series of National Exams to become fully

qualified, takes approx. 5 to 10 years.

• Agents– Must be licensed by the states in which they

sell. – Additional licenses to sell mutual funds,

securities or other financial goods.

Insurance is all about risk.

In summary, employment opportunities will continue in this industry. Lower than average growth for agents but replacements and support staff will continue to be necessary.