The Complete Guide into
Insurance as Career
TLTR: This blog provides a comprehensive analysis of what you can expect from choosing insurance as a career. It highlights the possible jobs and positions that you can opt for and also explores how insurance agents make money.
So, you’ve finished doing your basic research and are considering getting into insurance as your career. You’ve learned that the industry pays well and that the market is currently ripe with opportunities for professional and financial growth.
But, as with everything in life, there’s more to it than meets the eye. The insurance industry is vast and comprises a wide array of professions and positions that bring with them their own sets of opportunities and rewards. From underwriters to actuaries, you have a lot to choose from.
Let’s start with the basics!
In this blog
What Kind of Insurance as Career Jobs Are There?
An insurance agent is an industry professional who works as a representative for insurance companies. They help their clients select the right insurance to buy but represent the insurance company throughout the process.
They help their clients choose from available policies that are offered by the carriers.
There are two types of insurance agents:
- Captive agents typically represent one insurance company. For example, State Farm sells its policies through captive agents. They are considered employees of the company or independent contractors of the carrier and are provided with office space, training, and administrative support.
They can only sell the products and services offered by their carrier. For example, if the carrier only sells personal lines, the captive agent cannot sell any business lines.
Furthermore, they cannot sell the policies provided by another carrier, even if they know that the policy provides better coverage at a cheaper rate.
- Independent agents or insurance sales agents can represent multiple carriers rather than a single company. They act as middlemen between insurance buyers and insurance sellers to facilitate a transaction.
Independent agents have legal contracts with the insurance provider (called “appointments.”) These contracts specify the policies agents can sell and the rate of their compensation.
Unlike captive agents, independent agents receive commissions from the policies they sell and are not considered employees of any specific insurance company.
Insurance brokers work directly with insurance buyers and are not tied in any way to insurance companies. They utilize their knowledge, expertise, and experience to help their clients assess their unique insurance needs and help find the coverage that’s best suited for them.
When clients contact an insurance broker for a quote, they will first acquire their personal information and assess their needs. They will then compare coverage from several insurance providers to gather a list of the best conditions and rates. They may also search for opportunities to lower the rates by combining different types of insurance as bundled packages.
Qualifications To Become an Insurance Agent/ Broker
Being an insurance agent/broker may be a good fit for you if you’re a social person. However, soft skills aren’t enough; you’ll also need at least a high school diploma to become an insurance agent or broker.
Underwriters are insurance professionals who create insurance policies. They decide which risks the insurance company should insure and which ones they should not.
An underwriter also decides the amount of money the insurance company should charge for insuring something or someone. A good underwriter should have the financial know-how and good deductive skills to establish coverage that can satisfy both the company and its clients.
In order to underwrite the most effective coverage, they use complex risk management techniques and dynamic proprietary algorithms.
They also work behind the scenes and very rarely interact directly with clients. As they are one of the most integral pillars of the insurance industry, underwriters can be found in every spectrum of the insurance industry, including property and casualty, life, and health insurance.
Qualifications To Become An Underwriter
Having a degree isn’t a criterion, but if you have a specialization in economics, business, accounting, finance, or mathematics, it will help your career. Similarly, getting certifications should be a priority as it will give you an extra edge. Some of the most common certifications include:
- Chartered Property Casualty Underwriter (CPCU®)
- Associate in Commercial Underwriting (AU™)
- Associate in Personal Insurance (API™)
- Life Underwriter Training Council Fellow (LUTCF)
- Chartered Life Underwriter (CLU)
New underwriters typically start by creating basic policies under the guidance and supervision of more experienced underwriters. As they progress by earning certifications, they take on more complicated types of policies and gain more accountability in the process.
According to payscale, underwriters can make anywhere from $41,000 to $93,000 per year based on their level of experience. They earn an average of $60,834 annually.
Customer Service Representative (CSR)
Customer service representatives, or CSRs, talk to clients after their property is damaged or stolen. They provide the initial information and answer questions from people who want to know what their insurance will and will not cover.
According to research by Salesforce, 89% of customers are more likely to make more purchases if they have a positive customer experience. So, CSRs are crucial in ensuring that the insurance industry runs smoothly.
They are the immediate mediators between the clients and the insurance company and help people learn about new policies, make adjustments to their policies, and collect details from the policyholders after a loss.
Qualifications to become a CSR
An undergraduate or advanced degree isn’t required to get into this profession. However, some insurance companies may require their CSR employees to get a license by completing an exam.
If you start in the customer service department, you may want to move on to the position of customer service manager and oversee entire customer-centric departments. But it isn’t uncommon to see many CSRs move on to other departments like sales or claims after learning more about insurance and risk management.
Entry-level jobs for CSRs include:
- Insurance Services Associate
- Call Center Representative
- Client Relationship Manager
According to mypath, a customer service representative can earn anywhere from $29,039 to 32,402 annually.
An insurance adjuster is an insurance professional who works in the field and investigates their clients’ property after it has been damaged. They assess how the property was damaged and determine whether the insurance company will cover the damage or not.
They are tasked with the important responsibility of determining how much the damage to the person’s property will cost to repair. There are two types of adjusters:
- Staff adjusters are salaried employees of an insurance company.
- Independent claims adjusters are independent contractors that work for Adjusting Firms.
Qualifications to Become an Adjuster
To become an insurance adjuster, you’ll need at least a high school diploma. However, some insurance companies might prefer an associate’s or bachelor’s degree.
If you want to become an adjuster, you’ll also need to pass a licensing exam. Some states might also require you to complete a certain number of hours of training that needs to be done ahead of time.
From there, you’ll need to complete continuing education credits in order to maintain your license. For example, in California, licensed adjusters have to complete a minimum of 24 hours of continuing education per two-year licensing term.
Note: Illinois, Kansas, Missouri, Maryland, Massachusetts, New Jersy, Nebraska, North Dakota, Pennsylvania, Ohio, Virginia, Tennessee, Colorado, Iowa, Wisconsin, Missouri, and Colorado don’t require a license for becoming an adjuster.
According to indeed, as of July 26, 2021, claims adjusters make an average of $49,774 annually. More experienced adjusters with over 10 years of experience can earn more than $59,143.
Each state has a designated agency to ensure that insurance companies obey the applicable laws and regulations. The role of an insurance regulator is to oversee and supervise the business practices of the insurance industry in a particular state.
They have the power to investigate cases, carry out penalties, and provide licenses to insurance companies. They also have the ability to revoke licenses and permits.
Regulators play a key role in protecting the insured and the insurers. If a company faces financial hardships, it can compromise its ability to cover its clients and policyholders. Regulators monitor and preserve the financial solvency of insurance companies.
A good regulator can provide legal services and applicable business solutions on a wide range of administrative, corporate, insurance, and transactional issues.
Qualifications to Become a Regulator
The practice of regulatory law demands intensive knowledge and understanding of administrative laws, general business and corporate law, contract law, trends, and jurisprudence in insurance litigation, legislative developments, and various other topics.
According to glassdoor, insurance regulators make an average of $45,407 annually in the U.S.
An actuary is an insurance professional who helps insurance providers estimate the amount of money to charge for insurance. In other words, they analyze the financial risk associated with clients.
In creating and setting prices of insurance plans, actuaries use mathematical and statistical models to determine how likely their company will be to have to pay out on claims.
Insurance companies use this information in designing policies. Actuaries base their analyses on various factors like the lifestyle of groups or people looking to be insured, their location, state of health, and other related factors.
Qualifications to Become an Actuary
The most important skill that an actuary must have is the ability to understand how people think and behave. You must also be well versed in using information systems to design and manage risk assessment programs.
According to payscale, actuaries with less than a year of experience can earn an average of $59,830. However, as they gain professional experience, their average salary can double.
How does an Insurance Agent Make Money?
It depends. There are two types of agents: captive and independent.
The rate of commission that captive agents make depends on whether they are employees of their parent company or independent contractors. Captive agents who are regarded as employees are provided salaries and benefits by the company they work for. Captive agents who are classified as independent contractors are provided with payment based on sales and commissions.
According to the U.S. Bureau of Labor Statistics, insurance agents in 2020 made an average of $52,180 annually or $25.08 per hour.
Independent agents are paid solely on a commission basis. They are compensated by insurance companies every time they sell their insurance policy and when their clients renew their policy. Compared to captive agents, their commission splits are higher. Furthermore, since they can sell from a wider array of carriers, they have the potential to earn more in general.
Agents who sell property and casualty insurance can earn commissions from the sales of several lines of policies. P&C insurance encompasses several categories:
As a P&C agent, you can either choose to sell one specific type of policy or specialize in selling multiple policies to a broad spectrum of customers.
An agent who sells homeowners insurance and car insurance can expect to earn commissions from both the premiums as well as a portion of the policy renewal. This means that the chances of increasing your earnings improve with the growth of your client network.
Similarly, agents who sell life and health policies earn upfront commissions from their companies, albeit at lower commission rates on renewals.
Insurance companies also offer independent insurance agents rewards and bonuses if they meet the set sales targets.
Is Insurance Sales a Good Career?
Now is as excellent a time as any to start a career in insurance sales. Not only is there a low barrier for entry, but the possibilities of making profits are virtually limitless. While a college degree is preferred, a high school degree is enough for you to get into insurance firms and kick-start your career.
Some of the benefits of choosing insurance as a career are:
- Limitless Earning Potential
As an agent, there’s no denying that building up a good network of clients and a book of business will take time and effort. However, an agent with limited experience can achieve financial success relatively quickly.
As long as you are driven to learn how to become an insurance agent that your customers can rely on, success is relatively easy to find.
- Unprecedented Flexibility
Whether you’re an independent insurance agent or a captive one, you can generally pick when you want to set your appointment times. If your client isn’t too sure about coming to your office to talk, you can choose to go to them instead. You could also choose to meet in a café or restaurant.
Having an insurance sales career allows you to accommodate both your clients and yourself. If you’re an independent insurance agent, you’ll also have the option of selling from a wide variety of carriers. This can allow you to tap into niche markets and establish yourself as a top professional in the field.
- Never a Dull Moment
While insurance agents enjoy a relatively flexible work life, they also have other responsibilities to adhere to. Besides the regular work, for the most part, insurance agents need to constantly meet new clients, find them the right insurance policy, and close sales.
They also need to think about growing their business. This includes marketing and advertising, providing prompt responses to emails and calls, and establishing a good social media presence.
If insurance agents are to progress professionally, they will need to keep up to date with the latest industry trends and government regulations. So, you’ll never have a dull time when you choose insurance as a career.
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