By Billy Huntsman
What images pop into your head when you think about insurance?
Allstate’s Dennis Haysbert in a babyblue sweater? Progessive’s Flo drenched in rainwater?
What about Ben Stiller’s character from Along Came Polly? An insurance actuary, whose job entails the measurement and management of uncertainty and risk in insuring people and property.
Such is one field that will be in need of hiring in the next five years, according to a Bureau of Labor Statistics survey cited by MyPath.org.
MyPath is a joint endeavor of The Institutes, a networking organization for people in the insurance and risk management professions, and their affiliates—The Griffith Insurance Education Foundation, the CPCU Society, and the CPCU-Loman Education Foundation. The website was created in 2013 and offers information about the insurance and risk management professions, as well as available internships.
MyPath has partnered with such companies as Allstate, Farmers Insurance, Nationwide, Philadelphia Insurance Companies, and dozens of others to offer seasonal and continuing internships throughout the country. Additionally, these partners offer a slew of scholarships, some for amounts up to $10,000, mostly for undergraduate but also a few for graduate students.
MyPath says the insurance industry is ripe for Millennials to take, as the Bureau of Labor Statistic’s survey estimates nearly one-half of current workers in the industry will be retiring in the next decade.
Other promising statistics the survey found include:
- Only 14,000 risk management and insurance undergraduates worldwide
- Only five percent of students surveyed consider themselves interested in insurance
- Between 2015 and 2022, approximately 500,000 positions will need to be filled
The jobs in need of replacements, according to MyPath, include: actuary, computer analyst, data scientist, insurance agent, and sales representative.
How to get started
Unless you’re in the College of Business, chances of you knowing about NMSU’s Insurance Studies Program are slim-to-none. But in fact NMSU’s Finance Department offers a minor in Risk Management and Insurance.
The same minor is offered by the Math Department, in conjunction with Finance. Further, B.S.-seeking students in Math can choose the Actuarial Science and Insurance emphasis to earn the minor.
These programs prepare students for such careers as actuaries, claims adjusters, financial analysts, independent agents, information techs, investors, marketers, reinsurers, retirement planners, and underwriters.
What do people in these positions do?
“Actuaries mostly work with insurance companies to help determine rates for insurance products using statistical models,” says Tim Query, a professor in NMSU’s Finance Department who works with the Actuarial Science and Insurance Studies programs.
Claims adjusters look at claims filed by insured individuals to see if the loss is covered by the insurance policy, make monetary estimates on losses, and look out for fraudulent claims, he says. This career can also entail acting a special investigator insurance agencies can hire to “ferret out fraud.”
“There are a wide array of duties for a variety of analysts, depending on the company,” Query says. “A financial analyst might get involved in matching investments with future liabilities (claims). Most insurers have business analysts too, who use statistical data to determine trends among insureds (people who are insured), types of losses, etc.”
Independent insurance agents, who are more like entrepreneurs, deal with a number of different insurance carriers, and can offer more flexible insurance lines. An example of this is Las Cruces’ Pat Campbell Insurance.
On the other hand, insurance agents can also be captive, and sell only the products of the exclusive insurance company they work with, such as State Farm or Allstate. Both kinds of agents can sell insurance lines to individuals and businesses.
When an insured person files a claim, he or she pays a premium, which is then invested by investors in the insurance industry, and these investments serves as a major source of all their income, Query says.
Query says marketers in the insurance industry have essentially the same job as a marketer in any other industry would have—market the product being sold.
“GEICO is the company who really started investing heavily in TV commercials about 12 years ago, and other companies followed suit—Allstate, State Farm, Progressive, Nationwide, Liberty Mutual,” Query says. “When I was in college all the beer companies had the commercials, now it’s the insurers!”
Reinsurers are companies that help insurance companies “diversify their risk exposures.” For example, an insurance company writing a lot of homeowners insurance policies in south Florida may reinsure some of those policies with a reinsurer so that a hurricane in the wrong area doesn’t result in a catastrophic number of claims for the first insurer. Many of the positions in reinsurance are similar to insurance, Query says.
Retirement planners assist in preparing financial goals for retirement.
“An underwriter looks at applications for insurance and determines if (1) the application is accepted or rejected, and (2) do we underwrite this risk exposure at the standard rate, a preferred rate (a triathlete vegetarian with good health measures for life insurance), or at a higher rate (someone with a DWI and 2 speeding tickets in the last two years for auto insurance)?” Query says.
Sales representatives are also known as producers, and they may sell group policies for employers to offer their employees, or they can also be insurance agents.
Most of these jobs have starting salaries between $32,000 and $50,000. Actuaries typically start around $50,000 to $70,000. Sales reps and agents can widely differ, but Query estimates the top agents in New Mexico make between $500,000 and $1 million a year.
“One of our students interned at AIG in Los Angeles the summer of 2014 and came back to school with a job offer in hand of $65,000,” Query says.
Query says most of these jobs are in high demand, except for underwriters, as the industry has started replacing those with technological advancements.
Query agreed with MyPath’s assessment of the need for new hires in the insurance and risk management industries. In the next decade, the number of retirements from the RMI industries will double the last decade’s, he says.
“One stat I saw shows that the number of students studying risk management and insurance (RMI) nationwide is just a fraction of the openings needed to be filled,” he says. “Not only are the entry-level opportunities abundant, but the ability to move up the corporate ladder should be strong for this generation and a few years beyond.”
In the fall, spring, and summer semesters, Query estimates about 250 students take RMI courses at NMSU, with only 30 to 40 earning the minor. Further, there are only about 55 RMI minors/majors in the nation, mostly east of the Mississippi River.
For a résumé to stand out to employers, Query says, it’s a good idea for RMI students to take a series of exams in order to get certification.
Common exams students take include Chartered Property Casualty Underwriter, Associate in Risk Management, Certified Risk Manager, and Life-Health and Property-Casualty.
“We (the IFSC) provide study materials for some exams and subsidize part of the $100-$300 examination or registration fee, more if they pass,” Query says.
In addition, actuaries also have a specific series of “rigorous” exams that they must take.
“That weeds out the supply to the point that, no matter what the general economy looks like, there is always a need for actuaries,” Query says.
Students interested in risk management and insurance can receive support both from NMSU’s Insurance & Financial Services Center, as well as national scholarships.
“We have about $15,000 in scholarships available to NMSU students,” Query says. “Also, a number of nationally competitive scholarships are also available, and a number of Aggies have successfully applied for those.”
NMSU’s RMI minor was established shortly before Query arrived at NMSU in 2006, thanks to a $1 million endowment by the Mountain States Insurance Group. Query serves as the chairman for this group.
At the time, the only other RMI program in the West was at the University of Calgary in Canada. A few years after NMSU’s minor was established, however, the University of Colorado – Denver established their own RMI program.