You crash your car. You have emergency heart surgery. Your suitcase is stolen. Your house burns to the ground. Of course, these are all less-than-ideal situations, and heaven help anyone who encounters them simultaneously – but they’re all linked by an urgent need for one simple thing: insurance.
Insurance is all about risk management. In simple terms, it involves paying an amount of money to an organisation for them to guarantee compensation in the event of some kind of mishap. They ‘underwrite the risk’ of that event happening and it helps protect you from financial loss when things go bad – sort of like paying a little now to potentially save a lot later, to soften the blow of an unexpected (and undesired) event.
Of course, buying insurance is not a new thing (the first insurance company was actually formed in the wake of the Fire of London in 1666). But today, insurance is big business, worth over $40 billion in Australia alone, as more people wish to risk-manage their lives in all sorts of ways – against property damage, financial loss, ill health, and even death.
The sheer size of the industry means that if you want it, there is work in insurance – a lot of it. Over 20 000 people are employed in the industry alone in Australia, and almost everyone has at least one type of insurance policy taken out with a major insurer. Insurers are large employers hungry for good people. Like you.
There are a couple of broad categories of insurance.
General insurance covers a number of risk products, broadly split into commercial and personal. Commercial encompasses things like worker’s compensation, public liability insurance, commercial property, marine and professional indemnity insurance.
Personal insurance lines, on the other hand, deal with property insurance – against theft, or damage to your house, car or property by flood, fire, storm or other natural disaster. With this kind of general insurance the insurer usually pays for the whole or partial cost of replacement or rebuilding.
Consumer credit insurance and Compulsory Third Party personal insurance both come under the ‘general’ banner, in addition to health insurance, which can reduce hospital or practitioner fees, medication and surgery when you get unexpectedly crook. General insurance also includes travel insurance, taken out for flights, luggage, and risk-taking activities undertaken while travelling (one company, World Nomads, offers more extensive cover for more adventurous sorts – they actually insure people against bungee jumping, paintballing, elephant riding, and stilt walking!).
Outside general insurance, there’s life insurance, which attenuates the financial burden that may result in the event of an individual’s death. Basically it’s a contract between the policy holder and the insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. It doesn’t have to cover just death, but can also cover disability or a major illness. Life insurance is now commonly coupled with superannuation or other investment scheme as a way to maintain an individual’s financial security.
The size and scope of insurance markets today means you can pretty much insure against anything (some bizarre examples include insurance against immaculate conception, against a loss of humour, against a golfing hole-in-one, and insurance against death by giant crab – why take the risk?).
Just as there are all sorts of things that you can risk-manage through insurance, so too are there a range of different job roles available in the industry.
Generally speaking, they can be divided into those involved with issuing insurance products, and those who deal with claims under those products. Here are just some of the roles available.
These people look at insurance applications and research the risks to decide what kind and level of cover is required.
Given the sheer number of risks out there that can be insured against, underwriters have an interesting and challenging job, and learn a lot about a whole host of different industries as they help businesses understand what risks they face. To work in this role, you need to be a confident number cruncher and a solid team player, as you’ll be liaising with many other insurance departments.
When you make an insurance claim, these are the people who handle it.
Claims officers mediate with clients claiming for a loss under their policy, and arrange the settlement of the claim by interviewing them and obtaining evidence that the loss has, indeed, occurred. They also organise whatever needs to happen for the claim to be fulfilled – for example, finding a builder after a house fire has occurred.
Processing claims can be quite complicated and needs to be done quickly and accurately, so you need to be organised, detail-oriented and have good communication skills, as you’ll constantly be dealing with people who have suffered some sort of loss.
Insurance brokers act as middlemen, working with insurance companies to find the best, most suitable deal for potential clients, and overseeing applications and insurance requirements. They play a pivotal role in advising businesses and individuals of their risks, and how best to avoid or treat them. Many businesses buy insurance using an insurance broker.
To be a broker, you need to have good communication and negotiation skills, and have a passion for helping people and solving businesses problems.
Actuaries mathematically analyse the likelihood of insurable events occurring. They are critical to determining the financial impact of business decisions in order to minimise losses.
Actuaries deal in mathematics and probability, and take into account a range of social, economic, demographic and financial factors. To perform this role, you need to have a serious head for maths.
More hands-on than underwriting, these guys get out there to ascertain levels and types of risk for businesses, for example whether a building is fitted with appropriate safety devices (like smoke alarms and fire exits). They also give advice on these measures, and brief the underwriters and brokers on what they find – which ultimately helps decide what premiums a client will pay.
In the event of a claim, loss adjusters investigate whether a loss has occurred, to what extent it has occurred, and sometimes examine what caused the loss in the first place. They’ll also assist in organising the services required to recuperate the loss. They’re the ones who will talk to engineers, police and hospital staff to make sure claims are legitimate.
There are different kinds of customer service consultants – some positions provide support and advice to brokers, while others deal with queries for personal insurance products. In any case, opportunities for progression are many, and the skill set for each is similar – assisting people and providing information in a swift and professional manner. For this, you need great communication skills, a passion for helping people, and the ability to work efficiently in a time-pressured environment.
Depending on the job you’re shooting for, you can get into insurance from a range of different backgrounds – management, business, communications, law, accountancy or maths.
That said, employers in the industry are consistently searching for demonstrated industry training in insurance and financial services, so new employees will have the necessary knowledge and skills and be able to hit the ground running.
Good money, stable employment, growing markets and working with people – no matter what your level of experience or expertise, there is a job in insurance for you. Just goes to show, you don’t need to be a risk taker to work in risky business.
If you would like a career in insurance or financial services, see our range of finance and insurance courses.