The Insurance industry has several sectors. The pivotal ones are:
1. General Insurance (Property and Casualty) is an umbrella term covering all types of insurance except life assurance. It can be split between Commercial and Personal.
2. Commercial insurance protects businesses from unforeseen circumstances such as theft, negligence, liability, property damage and other interruptions to their day-to-day business. Commercial insurance covers all aspects of a firm, sometimes even damage to employees.
3. Personal insurance refers to a variety of private insurance contracts that an individual can take out for their self-benefit. This includes insurance for vehicles and health.
4. Life insurance is a huge industry and distinct from the above as here; insurance is purchased as a safeguard saying the buyer dies suddenly. This allows the deceased to take care of their family financially without being alive.
Affiliated with the insurance industry are Actuaries and Pension Consultants (which are also significant graduate careers).
Chief Executives: In London, Allianz, Axa, Zurich, Lloyds are at the top. They will have both General and Life insurance graduate positions, as well as the same two specialities for Actuaries and Pensions Consultants. There are also graduate openings in actuarial consultants like Aon and Mercer.
Insurance and Underwriters
Insurance is one of the bulkiest markets in the world, continuing to provide insurers with dynamic challenges in the areas of Assessing, Managing and Price Risk. The graduate scheme presents an opportunity to explore this complex market by giving an underwriter scope to analyse property and casualty risks, engineering, motor trade and motor fleet businesses.
You could work within the insurance needs of individuals and businesses, large and small such as the SME sector (Small and Medium Enterprises) in Property and Casualty, Vehicles, Directors and Officers, Professional Indemnity and Cargo. Insurance has a wide variety of products available, and a graduate may gain experience in underwriting hotels, warehouses, construction projects, casinos, retail businesses, food production, sporting arenas, listed buildings, film production, and Motorsports to name a few!
In a thriving and evolving industry, an underwriter can expect to be visiting a clothing warehouse on one day; sitting in on broker-client meetings the next, and liaising with a large arson claim after.
As a graduate underwriter, you are an integral part of an experienced underwriting team, which will enable you to develop your technical career, and given the time to seek wider project opportunities.
Risk is incomparable across fields. Hence, you must think outside the box – even though you are without a reference frame – and bank on conceptual understanding, as well as diplomatic bargaining and bartering capabilities.
Analyst: General insurance
Insurers are essentially Risk Analysts that assess the profitability of an insurance company by accounting for numbers of claims in a policy and the current climate that causes shifts in the number of coverage applications a company might receive. Insurers want as little usage of their coverage as possible to prevent any debt or unprofitability.
After these calculations, they can then estimate premiums to charge and advise clients on the optimal reinsurance programme to ensure economic success when insuring a customer, depending on estimations of potential liabilities.
They will help to quantify how much money they need to hold aside to finance the accountabilities arising from insurance policies they have written. Future unknown losses on existing policies are forecast using previously recorded history, actuarial judgment and assumptions. They also assess the volatility of these reserves, which influences the amount of capital that companies are required to maintain profitability.
Actuaries support critical commercial decisions to calculate the expected level of future claims. By applying statistical techniques, analysing experience against expectations, and communicating business insight, they become a valuable member of the pricing and risk function.
Joining an actuarial pricing team, you’ll find yourself analysing profitability, improving approaches to customer segmentation, and developing market-leading rating technology. Actuaries work across both General and Life insurance segments.
In Life Insurance you will deal with life, pension and investment products. This could include anything from pricing novel commodities of the company, risk assessment across multi-player ventures, financial liability management, economic modelling, commercial reserving and budgetary reporting.
Actuarial : Life/Pensions
A lively, rapidly progressing insurance sector UK companies presently have over £1 trillion invested for their pensioners, a sum greater than the financing by the rest of Europe combined. As vast as the amount may be, is the input sufficient enough to provide returns in the future?
In Post Brexit UK, it’s questionable whether returns on pension investments will result in profitability as people are living longer than ever before. This results in larger numbers of the population requiring pension schemes, for more extended periods of times, thus lowering returns to such actuary firms. As an actuary in this sector, your work will intersect with the trustees organising the Pensioning schemes, or the service provider itself.
Areas you will work on:
1. Analysis of the returns on the current pension scheme.
2. Risk comparison and suggestions for their reduction to increase profits, despite inflation and higher life expectancy rates.
3. Tracking economic changes based on usage of the pension scheme.
4. Appropriating the number of benefits an individual should receive based on their career history and current living situation.
5. Daily operations
6. Deciding taxation levels to fund the costs of pension provision to clients
7. Supporting pensioners despite mergers or acquisition.
8. Closing the account of a deceased pensioner/a person who no longer qualifies for the scheme.
Retirement has never been more challenging due to earlier retirement ages, more benefits given to employees, improvement of working and living standards, etc. Challenges include maintaining the necessary amount of funding (taxation is used to garner pensioner funds, but naturally people dislike being taxed), the types of benefits that can be provided, and new regulations.
1. Statistical proficiency
2. Economic intelligence
3. Passion and excitement for the field
4. Actuary certifications – based on the speciality you desire.