Insurance jobs and careers explained

The insurance sector offers a range of career options in terms of the job function you perform, the insurance products you specialise in and the type of insurance firms you can work for. While some roles require strong mathematical skills, in others it’s all about selling products.

Whatever your insurance job, though, you will be helping individuals or companies prepare for and recover more quickly from a range of unforeseen events – from a minor car crash to a huge natural disaster. “Insurance is about helping people when they are faced with difficult and challenging situations in their lives – it is you who will be the most sought after once they regain their senses and overcome the shock,” says Sabine Goesch, chief human resources officer at Allianz Asia Pacific.

You will be helping individuals or companies prepare for and recover more quickly from a range of unforeseen events

In more rudimentary terms, insurance is a type of risk management. An insurer pools together ‘premiums’ (fees) from many ‘insured entities’ (or ‘policyholders’) to pay for losses that only some of them will end up incurring. Policyholders are therefore protected from a risk – for example, a family losing their house in a fire or a company losing their cargo at sea – by paying a fee, the size of which is determined by the severity and frequency of the event occurring. Risk of a loss passes from the company or individual to the insurance firm.

If you embark on a career with an insurance company, you are joining a large and profitable part of the finance sector, dominated by conglomerates like Alliance, AXA, China Life, Prudential and Zurich. AXA, the world’s largest insurer, has 157,000 employees spread across 56 countries.

The United States and Japan alone – with total insurance premiums of $1,259bn and $532bn respectively in 2013 – account for about 40% of the world's insurance market. The UK insurance industry is the third largest globally ($330bn) and employs some 315,000 people, of which more than a third are insurance company staff and the remainder work in auxiliary services such as broking.

Insurance sector expansion in developed markets is hindered, however, by market saturation – many individuals and corporates are already heavily insured. The long-term strategy of most global insurance firms is to generate more profits from fast-growing ‘underinsured’ emerging markets, particularly in Asia. Burgeoning middle-class populations in countries like China, India and Indonesia are looking to purchase more insurance products and insurance regulation in the region is becoming more sophisticated. China already boasts the world’s fourth biggest insurance sector (with premiums of $278bn).

There are four core job functions in insurance: actuarial, underwriting, claims and broking. And in broad terms there are five type of firms offering careers in insurance:

Life insurance companies

Life insurance guards against mortality risk – or the loss of income resulting from the premature death of the insured person. A family member or other named beneficiary receives a payment, protecting them from the financial impact of the death. Life insurance firms typically also offer annuities (long-term savings) and pension products and meet their liabilities by investing the premiums they received.

Life and non-life insurers are subject to different regulatory regimes in most countries, largely because life policies cover risk over many decades, while general insurance mostly operates over much shorter periods, such as one year.

General (or non-life) insurance companies

Some of these firms specialise in one type of non-life product (such as health insurance), but many of the larger players offer a wide range of services, typically including motor and property insurance. Any risk that can be quantified can potentially be insured, so the sub-categories of general insurance are almost endless – for example: liability insurance (in the event of a legal claim), income protection insurance (if the policyholder becomes unemployed) or credit insurance (to help repay loans when borrowers become insolvent). More exotic types of insurance are usually sold to companies rather than individuals – kidnap and ransom insurance and political risk insurance protect corporations operating in high-risk areas.

Reinsurers

Reinsurance firms sell policies to other insurance companies who want to reduce their risks and protect themselves against catastrophic losses. Given the scale of reinsurance policies, the industry is dominated by large firms (Munich Re and Swiss Re, for example) with sufficient reserves to back the primarily insurers.

Insurance brokers

These are intermediary firms who shop around among insurance companies to find the best policies for corporate or retail clients. They are typically paid a commission from the insurer rather than the policyholder. Brokers range from huge multinationals like Marsh, Aon, and Arthur J. Gallagher & Co to tiny local companies employing a handful of staff. Brokers can be also be ‘captive’ and work on behalf of just one insurer.

The Lloyd’s market

Unlike other insurance brands, Lloyd's is not a company; it's a London-based market where members – about 140 corporations, individuals, underwriters and financial backers – join together as syndicates to spread risk. The Lloyd’s market typically works by subscription, where more than one syndicate takes a share of the same risk.