The Insurance Industry

Prepared by the Diamonds Mary Keegan Kathy Rehn Glenn Fitze Bruce Penn Kristin Waiting Rose Truglio

Overview and Trends

• Approx. 1800 U.S. companies offer personal and commercial lines • Function as financiers • Protects the economy against losses of all kinds • After 9/11/01, stopped writing terrorist policies

Overview continued...

• Insurers, banks, and securities brokers can merge and cross sell each other’s lines • More of an investment-management focus • They are forming strategic alliances, many mergers happening in industry • Act as large investors in our economy

Job Outlook

• Companies seek tech savvy candidates • Internet Sales has reduced need for “Insurance Agents” • Growth in systems analysts, adjusters, and examiners

Actuaries

• Blood and guts number crunchers • Determine risks and statistically render social trends • Must have strong mathematical reasoning and statistical background • College Degree a must

Agent or Broker

• Sell policies – Personal lines : limitless accounts – Business lines: Fewer customers, larger accounts • Product Line Knowledge imperative • Great Interpersonal Skills • State Licensing Exam

More careers:

Claims Adjuster • Negotiate claims • People Skills • No College required Loss-Control Specialist • Prevention analysis • Knowledge of safety • College required Risk Manager • Advise management • Manage benefit plans • Degrees/Work Experience Service Representative • Liaison to public • Product knowledge • College degree req’d Underwriter • Evaluates applications and decides if premium justifies risk.

• College degree req’d Information Technology • Manage data/information • Computer skills and experience • Technical degree or credentials preferred

Typical Salaries/ Compensation

A comparison: 120 100 80 60 40 20 0 Low Salary Avg.

Salary High Salary Agent Adjuster Actuary Manager Underwriter Analyst

Earnings Statistics

• Weekly earnings of nonsupervisory workers averaged $675 in 2000.

• Median Hourly earnings range from $11.83 entry level office assistant to $40.23 General Manager of an independent insurance agency.

What’s to Love?

• Growth Oriented – Life insurance – Long term care – Retirement investment – Bonus of work flexibility • Technological Outlook – Computer aided software tools – Image processing – Client/server systems – Pen-based computers

Love?

• Industry Extensions – Actuarial Tables – Direct Marketing – Financial Planning – Derivatives

What’s to Hate?

• No Job is Safe – Computerization – Consolidation – Competition • Bureaucracy – Memo everyone – Company policies – No creativity • “Heartless” – No reimbursement for AIDS – Loss ratio – Conscience?

Who are they? Top 5 in U.S.A.

1. American International Group 2. State Insurance 3. Berkshire Hathaway 4. Met Life 5. Allstate

Top 5 on Long Island

1. Aon Group, Melville 2. Treiber Insurance Group, Garden City 3. BWD Group, Jericho 4. Marsh USA, Melville 5. Allied North America, Jericho

Professional Associations

• ALLIANCE OF AMERICAN INSURERS (630) 724-2100 www.allianceai.org

• AMERICAN ACADEMY OF ACTUARIES (202) 223-8196 www.actuary.org

• AMERICAN ASSOCIATION OF MANAGING

GENERAL AGENTS

(405) 840-9393 www.aamga.org

• AMERICAN INSURANCE ASSOCIATION (202) 828-7100 www.aiadc.org

Wait, there’s more...

• INDEPENDENT INSURANCE AGENTS OF AMERICA (800) 221-7917 www.iiaa.org

• INSURANCE INFORMATION INSTITUTE (212) 669-9290 www.iii.org

• LIFE OFFICE MANAGEMENT ASSOCIATION (770) 951-1770 • www.loma.org

• NATIONAL ASSOCIATION OF INDEPENDENT INSURERS (202) 639-0495 www.naii.org

• NATIONAL ASSOCIATION OF INSURANCE WOMEN (800) 766-6249 www.naiw.org

There are many, many more.

The College Connection on L.I.

Employers prefer college graduates for all sales, managerial, and professional jobs.

The preferred degrees will have a major in business, economics, finance, or accounting. The ability to operate computers is essential.

Continuing education is a requirement for most jobs.

Where to go?

• Adelphi • Dowling • Hofstra • CW Post • Southampton College • NYIT ( New York Institute of Technology) • SUNY Farmingdale • SUNY Old Westbury • Molloy College

Continuing Education and Credentials

•Underwriters –AU ( Associate in Commercial Underwriting) takes 1 to 2 years combines courses and exams –CPCI ( Chartered Property and Casualty Underwriter) takes ~5 years and 10 exams •Life and Health Insurance –CLU ( Chartered Life Underwriter) –RHU (Registered Health Underwriter)

• Claims adjuster/Examiner – AIC ( Associate in Claims) – RPA ( Registered Professional Adjuster) – CPPA ( Certified Professional Public Adjuster) – SPPA (Senior Professional Public Adjuster) – ALHC (Associate Life and Health Claims) – FLHC (Fellow Life and Health Claims) • Actuary – Series of National Exams to become fully qualified, takes approx. 5 to 10 years.

• Agents – Must be licensed by the states in which they sell. – Additional licenses to sell mutual funds, securities or other financial goods.

Insurance is all about risk.

In summary, employment opportunities will continue in this industry. Lower than average growth for agents but replacements and support staff will continue to be necessary.