The universal joke in the insurance business is that just about everyone finds their way into insurance underwriting and brokerage by mistake.
That dynamic could be changing, however.
"We used to coin the phrase that people in the insurance industry, even the very successful ones, all would have opted first for investment banking," recruiter Karen McCorkindale tells eFinancialCareers.
"Today, many investment bankers who've been laid off seek a safe haven in the insurance industry," observes McCorkindale, principal with the global insurance division at Smith Hanley Associates in Southport, Conn.
D&O liability and E&O insurance growing businesses
The recruiter specializes in the professional liability insurance classes D&O (directors and officers liability) and E&O (errors and omissions) insurance, which continue to represent a vital, growing field within the business and one with clients in virtually all walks of life: Not only do companies of all stripes often purchase D&O insurance to indemnify their senior executives and directors against lawsuits and judgments arising out of poor management decisions and other acts committed in good faith, but E&O coverages are taken out by lawyers, doctors, travel agencies, securities brokers, investment advisors, mutual fund companies and among others, to protect against similar third-party suits and judgments.
"Cyber" E&O insurance against breaches of network security and theft of private information represent some of the newest coverages to spring up in the field, observes Jay Brodsky, senior vice president with the DeWitt Stern Group, an insurance brokerage based in New York City.
Brodsky got into insurance the usual way-circuitously. He worked in TV and radio for a while before studying law and going to work for the Brooklyn DA in New York City. Later on, he answered an ad in the New York Times for a position handling lawyers' liability and other professional liability claims for AIG-a company he'd never heard of before. He spent five years as an AIG claims examiner and another five years in underwriting of E&O and D&O coverages for brokers, investment advisors and mutual funds-businesses he still handles to this day from the brokerage side.
Moving from banking to insurance can be rocky
The move from banking to insurance can be a rocky one for several reasons, though there are advantages as well.
First off, "This is not a white collar and cuffs business," says Brodsky.
Whereas investment bankers get paid "massive amounts of money" to work 70- and 80-hour weeks, the payoff in insurance comes more in the form of a more laid back, 50-hour work week with weekends off and the ability to have a more balanced life in general where you're not constantly on the clock. Those with five years of experience will be looking at maybe a $100,000 salary as a result. Deals might be done on the golf course or over dinner, and yet there's plenty of hard work to be done in underwriting and sales alike, given that large multinational companies often spend $1 million or more each year for their D&O policy.
On the other hand, McCorkindale notes, the insurance industry-while having retracted somewhat of late, and while experiencing a soft market where rates have eroded for the past several years-looks "nothing like Wall Street or the legal world," which the recruiter describes as "a mini-version" of banking with its own massive layoffs.
Perhaps most importantly, from the point of view of investment bankers whose clients run the gamut of industries, in the professional liability arena too, you're dealing many different kinds of industries and client risks, so it's "never boring," says Brodsky.
Insurance industry giants are hiring
Insurance underwriters active in the D&O space include Chubb, Chartis (part of AIG), CNA, Travelers, XL Professional, the Hartford and Bermuda-based ACE, and according to a recent Advisen report, ACE is hiring directly from its headquarters. Brokerage firms representing clients seeking D&O and E&O insurance limits include industry giants Marsh & McLennan, Aon and Willis. Willis North America is doing direct hiring, Advisen reports.
McCorkindale says it's important to keep in mind that these days, insurance firms and brokerages are more prone to hiring people with insurance industry experience than they've been in the past, so investment bankers who want to transition in will need to do most of their own legwork by capitalizing on their C-suite contacts.
Brodsky agrees. His clients include CFOs, treasurers and risk managers, and these are the kinds of people investment professionals tend to deal with regularly as well. Beyond that, bankers' analytical savvy, financial prowess and "people-person" skills will all be transferable to insurance, he notes.