Storms, statistics and the complex business of being prepared for the worst
Insurance is about making sure you’re covered when the worst happens, whether that’s a natural disaster, a car crash or your exports being lost at sea.
It’s also a huge industry: global insurance premiums totalled more than $4.6 trillion in 2012, and in the US (the largest insurance centre, followed by Japan and the UK) it provides about 2.3 million jobs. The industry has four main areas:
Insurers – assess risk and develop products for
sale to individuals and corporations.
Re-insurers – insure insurers against risk of
Insurance brokers – intermediaries who sell Insurance products – particularly important in the corporate market.
Lloyd’s market – about 140 corporations, individuals, underwriters and financial backers, or syndicates, who come together to spread risk.
Roles and career paths
Underwriting – involves extensive risk analysis, sifting stats on industries, demographics and clients to prepare a quote.
Actuarial – the domain of the maths whizz. Actuaries produce financial models based on the statistical analysis of risk, which are used by underwriters in their analysis.
Broking – the salespeople of insurance, who try to find the right product for a client.
Claims – where most insurance people work. Graduates are likely to land in fraud detection or claims investigation.
Pay and bonuses
In the US, the median annual wage of qualified actuaries is $87.6k, but the top 10% earn over $160k, according to the Bureau of Labor Statistics. In the UK, the starting salary for qualified actuaries is £46.5k ($70k), increasing to £221k ($337k) for a chief actuary, according to The Actuarial Profession.
Specialist Lloyd’s underwriters should expect a starting salary of £25-35k ($38-55k), but it’s possible to earn £70-150k ($107-230k) in a senior position.
It takes five to seven years just to qualify as an associate actuary, but training is usually provided by the employer. You will need a mathsbased degree to get your foot in the door, but this is the case for most graduate roles in insurance.
For underwriting roles, a good level of numeracy is required, plus communication skills.
“We are looking for candidates with good analytical skills, attention to detail and a strong results orientation,” says Sabine Goesch, chief human resources officer at Allianz Asia Pacific. “We place high importance on the ability to work in teams – ideally across markets in an international environment.”
Insurance firms are also dealing with a more complex regulatory environment – Solvency II is placing great demands on insurance firms in Europe, for example. Keeping up with developments in this area would be valuable.
Because insurance spans so many areas, subject matter experts are also hired into graduate schemes: “Experts from all disciplines are needed – mathematicians, economists, lawyers and engineers, but also geologists, pilots, climate researchers, physicians and graduates from many other fields,” says Verena König, talent management consultant at Munich Re.