Insurance is a system to alleviate financial losses by transferring risk of loss from one entity to another.

The entity, which may be an individual or association of any type, including a government or government agency, that is transferring the risk is called the "insured". The entity accepting the risk is called the "insurer". The agreement between the two by which the risk is transfered is called the "policy". The policy is a legal contract that sets out exactly the terms and conditions of the coverage. The fee paid by the insured to the insurer for assuming the risk is called the "premium". The premium is usually determined by the insurer to fund estimated future claims paid, administrative costs, and profit.

As the population ages and wealth grows, the demand for insurance professionals will increase dramatically. This is great news for you if your thinking of going in to insurance. Jobs in insurance involve helping individuals and business manage risk to protect themselve s from catastrophic losses and to anticipate potential risk problems.

Work in this area is not only personally rewarding, but can be financially rewarding as well. You will help clients understand their insurance needs, explain their options to them and hopefully help them purchase appropriate insurance policies. You could work in a variety of areas in insurance including as an underwriter, a sales representative, an asset manager, a customer service rep or an actuary. A theme that is constantly emphasiz ed by insurance professionals is that the industry is ultimately about helping people when they need it the most. The stereotype of a slick, sleazy, fast-talking insurance salesman is largely a figment of the past.

Main areas of work in insurance career

A person interested in working inthe field of insurance can either
work in the capacity of:

An office in one of the areas of insurance (life, general and postal).
An agent.
An insurance surveyor.
The work of an actuary (one who works in insurance field) involves
the calculation of insurance risk, premiums and pension programmes.
Actuarial science is build on the statistical evaluation of the financial and economic implications of possible congingencies.

In an insurance company person can take a job in and as:

Administration - deals with the registry of claims.
Development - deals with marketing and procurement of business etc.
Accounts - deals with the management of funds and their disbursement.
Investment - responsible for the investment of funds of insurance company.

Entry & eligibility for insurance career

A person who wants to be an actuary has to pass an entrance exam
conducted by the Actuarial Society of India.
However, recruitment to the Postal Life Insurance takes place according to the recruitment rules of the postal department.

To be an insurance surveyor, a person needs to hold a licence.

Private insurance firms take in management graduates to work mainly in the areas of marketing and sales.
The eligibility criterion for recruitment to both the LIC and GIC is the same. An AAO (Assistant Administrative Officer (class I officer) must be a graduate/postgraduate in any subject with minimum of 50 percent marks, from a recognized university. The candidate's age should be between twenty-one and twenty-eight years. AAO's recruitment exam is an all India level exam. To be recruited as a clas II officer, the candidate has to be a graduate in any descipline. Class III and class IV levels are open to graduates and school-leavers.
An insurance surveyor, to be eligible to hold a licence, must fulfil
one of the following qualifications:
Fellowship of associateship through the exam held by the Institute of Insurance Surveyors and Adjusters (IISA), Mumbai. Degree or diploma in architecture from a recognized university.
Fellowship or associateship of the Institute of Chartered Accountants of the Institute of Cost and works Accountants.
Degree of diploma from a recognized engineering institute.
Degree or diploma in naval architecture.
Actuarila Science & Insurance Institutions
Actuarial Science is mainly offered as a three year degree course by some universities, or as one of the subjects of a degree programme.
There are also short term courses in insurance or actuarial science, ranging from six months to two years. The Insurance Institute of India, Mumbai also grooms insurance personnel for a career in the LIC. The highest qualification for a career in insurance is that of a Fellow of the Institute of Insurance, London. This requries a licentiate in insurance, for which three papers have to be cleared, followed by eight papers for an associateship, and further four papers to qualify for the fellowship. The training imparts skills in
the science of assumptions and probabilities, and fine tunes arithmetical and mathematical faculties.

Insurance Colleges in Andhra Pradesh
Insurance Colleges in Delhi
Insurance Colleges in Goa
Insurance Colleges in Haryana
Insurance Colleges in Maharashtra
Insurance Colleges in Manipur
Insurance Colleges in Orissa
Insurance Colleges in Punjab
Insurance Colleges in Tamil Nadu
Insurance Colleges in Uttar Pradesh
Insurance Colleges in West Bengal

Job Prospects in Insurance Companies in India
There are plenty of jobs in the insurance sector today, in both government and private sectors. In fact, the estimated requirement for trained professionals is expected to be mroe than 30,000 over the next two to threee years. Groth in the insurance profession depends totally on the individual.

Remuneration in Insurance Career
In government sector, the pay scale of the officers in the insurance sector as given by the government of India is in the range of Rs 3000-Rs 8000 for development officers and go upto Rs 14,000-16,000
for zonal managers. Along the basic pay given above, allowances amount is about more than 200 percent of the basic pay. In private sector, starting salaries are in th range of Rs 6000 to Rs 9000 per month, where management graduates can start with Rs 15,000 to Rs 25,000 per month

With private players coming into the insurance sector, new and innovative products and better customer service is expected. And with this, several new job opportunities too
The liberalisation of the Indian insurance sector has opened new doors to private competition and the new and improved insurance sector today promises several new job opportunities. With private players now in the field, there will be innovative products, better packaging, improved customer service, and, most importantly, greater employment opportunities.

There are a number of options to choose from for a career in Insurance. Ideally an insurance company will have openings in the marketing, distribution, actuarial, underwriting, operations and investing departments. Though some jobs like investing, marketing and distribution are the same in any other industry, actuarial and underwriting jobs are exclusive to the insurance industry
Actuaries
Underwriter
Surveyor
Investment
Marketing & Distribution
CAREER OPTIONS
Actuary
Evaluates the risk for companies to be used for strategic management decisions.
Actuaries use their analytical skills to predict the risk of writing insurance policies through the use of mathematical, statistical and economic models.
An actuary not only fixes the premium rates for new products, but also revises both products and prices. They calculate costs to assume risk, for example how much to charge policyholders for life or health insurance premiums?






Nov-15-2002


10-57 Building careers in insurance


With private players coming into the insurance sector, new and innovative products and better customer service is expected. And with this, several new job opportunities too.

The liberalisation of the Indian insurance sector has opened new doors to private competition and the new and improved insurance sector today promises several new job opportunities. With private players now in the field, there will be innovative products, better packaging, improved customer service, and, most importantly, greater employment opportunities.

There are a number of options to choose from for a career in Insurance. Ideally an insurance company will have openings in the marketing, distribution, actuarial, underwriting, operations and investing departments. Though some jobs like investing, marketing and distribution are the same in any other industry, actuarial and underwriting jobs are exclusive to the insurance industry.

Actuaries
Underwriter
Surveyor
Investment
Marketing & Distribution
CNBC India spoke to Sehwag Gidwani, Secretary General of Insurance Institute of India, Mumbai on the different career options available in the insurance industry. Excerpts from the conversation.


Discussing the options, potentials, strength and career as an actuary, he said, “There is a tremendous potential for an actuary not only in India but also worldwide, given that, the regulations now prescribe that every company must have an appointed actuary. The actuary, basically is a mathematician, statistician, who works out the premium rates, the product design, and infact, he decides on the solvency margin of insurance companies. We have an Actuarial Society of India in Bombay which conducts these professional examinations and currently, more than 1200 members are pursuing this education.”

CAREER OPTIONS

Actuary

Evaluates the risk for companies to be used for strategic management decisions.
Actuaries use their analytical skills to predict the risk of writing insurance policies through the use of mathematical, statistical and economic models.
An actuary not only fixes the premium rates for new products, but also revises both products and prices. They calculate costs to assume risk, for example how much to charge policyholders for life or health insurance premiums?
Course

The actuarial course involves basic techniques, communication, advanced techniques in actuarial science, finance, life and general insurance.
Commenting on the demand potential and the likely remuneration for an actuary in the industry, Gidwani said, “The Actuary belongs to the top management team thus the compensations are very attractive for example in U.S., the salary will be more that 80000 US dollars per annum. The field is not only relevant to insurance industry but to the whole financial sector. So I visualize a very bright future and good demand because they will be not only for product development, product designing but also deciding on the solvency margin premium rates. Without an actuary, an insurance company cannot function.”

Speaking on the number of years experience that is really required to get the right break as an actuary, he said, ”The candidates opting for a career as an actuary must have a strong mathematical background, statistical background and it can take minimum two to nine years depending upon the kind of studies conducted by the candidate. Usually, it is found that, people who join the insurance industry pursue these careers.”

Who can qualify --

Mathematics and Statistics graduates can try the actuarial course.
The eligibility requirement is higher secondary education.

Elucidating the prospects of a career as an underwriter or a surveyor he said, “An underwriter basically decides whether to grant insurance and if so, on what terms and conditions. His role is to assess the risk and determine at what premium we should charge him and whether to give him insurance at all. Thus the role of the underwriter is a unique operation in insurance companies.”


Underwriters

Work Profile –

Insurance underwriters review insurance applications and decide whether they should be accepted or rejected based on the degree of risks involved in insuring the people or objects of concern.
In the life insurance business, an underwriter is expected to filter the "bad or substandard lives". Whereas, in the general insurance segment, he takes care of risk management .
Underwriters give and obtain information, explain policies and quote rates to medical personnel, other insurance companies, or field representatives.
Adding further he said, “The surveyor on the other side usually functions only in non life business and not in life insurance business. The surveyor’s role is to assess the loss that has been notified by the customer, suppose a car meets with an accident, the policyholder will lodge a claim with the company for compensation. The surveyor will then go and assess the extent of loss. The insurance business operates on the principle of indemnity, that is, putting the customer in same position financially in which he was before the loss happened. As there is a tendency on the part of customer, to benefit out of an insurance transaction, the surveyor puts a check on that and assesses the loss. He then gives a report to the insurance company and based on the surveyor’s report the company will settle the claim.”


Surveyors

Work Profile –

Surveyors are professionals who assess the loss or damage and serve as a link between the insurer and the insured.
They usually function only in non life business.
Their job is to assess the actual loss and avoid false claims.
Surveyors like agents, are not employees but are independent professionals hired by the insurance company.
Regarding the minimum qualification require for pursuing the career of an underwriter or a surveyor, Gidwani said, “There are specific regulations governing the profession of surveyors, they should have an engineering degree or insurance qualifications. They have to undergo a one-year training program with an existing surveyors firm and at the end of that they have to pass another examination which will be done by Insurance Institute of India.”

Who can qualify –

An insurance surveyor must possess a license issued by the Controller of Insurance under Ministry of Finance, Govt. of India.
Licenses are issued to technically qualified people who are engineering graduates or diploma holders in any discipline, Chartered Accountants, Graduates in Medical Sciences.
They have to undergo a one-year training program with an existing surveyors firm and thereafter pass an exam held by the Insurance Institute of India.
A surveyor after obtaining the license may be empanelled by any or all of the insurance companies.
Commenting on the need of investment managers who look at the assets of the insurance company he said, “Investment operations of insurance company is a very old function, given that insurance business is 300 years old and because an insurance company collects a lot of funds, they need to be invested wisely without jeopardizing public security. Thus, there is a good potential for a career in this field. And every company has a few investment experts who will guide the operations, most of which may done by asset management companies.”

Speaking on a career in marketing and distribution, Gidwani said, “In the marketing area the potential is unlimited. The insurance business in India is yet to grow upto international standards. And, between the last 18 months more than 4,00,000 people have enrolled as agents. Since there are a large number of agents you need marketing managers, agency managers to guide, motivate and supervise them and worldwide this trend is discernable. More and more people are needed in marketing because it brings money for the company.”

Marketing & Distribution

Insurance agents may work for one insurance company or as independent agents selling for several companies.
Insurance brokers do not sell for a particular company, but place insurance policies for their clients with the company that offers the best rate and coverage.
Insurance agents and brokers can find openings in the health insurance sector, financial planning services, retirement planning counselling or even provide other services, for example sell mutual funds, annuities and other securities.
Lastly, briefing on other career options that can be available in the insurance industry, he said, “The other options are in health management as third party administrators, as well as back office processing as IT industry does for information technology i.e operations of other insurance companies worldwide could also be done in India. There are frauds in insurance, insurance investigation could be another choice for occupation, and call centers are also becoming a big business for marketing of insurance products, so that too could be an innovative career in the insurance industry.

Learning Grounds

Insurance Institute of India
National Insurance Academy, Pune
Actuarial Society of India

New Insurance Products

ICICI Prudential has launched the unit-linked variant of its regular policy for children, SmartKid. It provides three scheme options: Maximiser, which has a skew towards equities; Protector, which is biased towards debt; and Balancer, a blend of the Maximiser and Protector. Withdrawals can be made after five policy years; a total of five withdrawals can be made over the policy term. On the death of the parent, the sum assured is paid out immediately; payment of all future premiums is waived and the policy benefits remain in force.

OM Kotak Mahindra Life has launched an investment-cum-protection plan - the Kotak Safe Investment Plan -- that offers safety of capital while permitting the policyholder to benefit from investment opportunities in the equity, debt and money markets. This unit-linked insurance plan is unique in that the various funds give the policyholder access to growth markets while the plan guarantees the sum assured - on maturity or death — regardless of the performance of the funds.

ING Vysya Life has launched "conquering life critical illness plan", a total protection plan combining a term life cover and a unique critical illness benefit. It plan covers the basic need for protection and also provides for cover against 10 major critical illnesses.

ICICI Bank has decided to offer `Life Time Pension Triple Advantage' exclusively designed life insurance product from ICICI Prudential Life Insurance to its high net-worth credit cardholders across the country. The product is a flexible unit-linked pension plan gives the customers the advantage of reducing their tax burden along with safeguarding their post-retirement years. Besides the tax advantage, the product also offers to provide the cardholders regular pension, guaranteed for life.

TATA AIG Life Insurance Co Ltd has launched `Nirvana', a pension plan for individuals. With a minimum cover of Rs 50,000, this policy is available for anyone between 18 and 55 years of age with the flexibility to retire between 50 and 65 years. The `Nirvana' policyholder has to pay premiums each year till retirement, when he/she gets a maximum of 25 per cent of the sum accumulated. This pension plan also offers a guaranteed addition of 10 per cent of the sum assured, which will be payable either on death or on survival at the time of retirement, provided the policy has been in force for 10 years.

Aviva Life Insurance has also launched two individual products - PensionPlus and Secure Life. Aviva is the fifth private insurance player to introduce a pension product. Others include-ICICI Prudential Life, HDFC Standard Life, OM Kotak Mahindra Life and Tata AIG Life.

Life Insurance Corporation of India has launched its first co-branded bancassurance product - Corp Jeevan Raksha, a group insurance scheme on the life of deposit holders of Corporation Bank. This scheme is available to all personal account holders of Corporation Bank including those having fixed deposits, savings account and current account provided they are between 18 to 55 years of age.

Those customers of Corporation Bank who opt for this scheme will be eligible for a life insurance cover of Rs 1 lakh in case of natural death & Rs 2 lakh for death by accident. In the absence of any bancassurance norms, Corpbank's role will be that of a facilitator for payment of premium to LIC and for payment of claims to deposit holders. The admission of claims will however be subject to clearance by LIC.

Indian Institute of Insurance Surveyors and Loss Assessor

IRDA has got the ‘Indian Institute of Insurance Surveyors and Loss Assessor’ incorporated on 4th October, 2005 with registered office at Hyderabad. This is on model of the Institutes of Company Secretaries or Chartered Accountants. From three years of its establishment, the institute would be considered for conferment of a chartered status.

The main objects of the Institute , inter alia, are promotion of quality in the profession of surveyors and loss assessors through education and training, introduction of best practices amongst its members, conduct of professional examinations relating to the profession of surveyors and loss assessors, promotion of research and studies in loss control and minimization techniques, development and administration of code of conduct and ethics among the surveyors and loss assessors and ensuring compliance of the same.

Surveyors and loss assessors holding valid licence as well as categorization issued by the IRDA are eligible to become members of the Institute. There are two classes of membership, viz Associate and Fellow.

General insurance industry grew by 20 per cent

General insurance industry grew by 20 per cent in the first five months of 2006-07 due to strong performance by private players. The 12 non-life players collected Rs 10,427 crore in premium during April-August 2006 as compared to Rs 8,668 crore in the corresponding period last year.

Market leader New India's market share has come down from 21.56 per cent a year ago to 20.07 per cent while private player ICICI Lombard's market pie has increased from 8.12 per cent to 12.31 per cent during the same period. At present, the eight private players together have about 35 per cent of the market share.

New India Assurance (NIA) grew business by 11.95 per cent to collect Rs 2,093 crore in premium in April-August this fiscal. NIA was followed by Oriental Insurance Company, which clocked 11.63 per cent growth in business at Rs 1,667 crore and a market share of 15.99 per cent. National Insurance saw a flat growth and collected Rs 1,542 crore in premium and a 14.79 per cent share of the market. United India grew premium income by 7.19 per cent at Rs 1,488 crore and a market pie of 14.27 per cent

Insurance companies to focus on the priority sector

After banks, insurance companies also may be required to voluntarily provide a certain per cent of insurance to the priority sector -- rural poor and other social sectors.

The Minister of State for Finance, speaking at a seminar has asked Insurance companies to come forward for setting targets for this priority sector and they should start with health insurance. The Insurance Regulatory and Development Authority (IRDA) Chairman, also favoured such a mechanism and would soon ask insurance companies to provide insurance to the priority sector on the basis of their years of operation and market share. Even though the scheme would not be mandatory, the companies not providing priority sector insurance coverage might be penalised.

Presently Indian banks have to extend 40 per cent of their total net credit to the priority sector. Financing of Small Scale Industry, Small business, Agricultural Activities and Export activities fall under this category. This is also called directed credit in Indian Banking system. Part of the cost of this concession is borne by RBI by means of refinancing such loans at concessional rate.

Indian government want to ensure that a certain portion of insurance cover goes to the rural and other social sectors to achieve insurance inclusiveness. Objective is also to render health insurance affordable to the poorer sections of the society

Underwriting losses of non-life insurance companies to increase

The general insurance industry in India is likely to be de-tariffed from 31st December, 2006 giving insurance companies the freedom to decide their premium rates.

Tariffing is a concept associated with the insurance industry for more than hundred years. Tariffs are laid down rules, conditions, rates etc prescribed by member companies, called tariff companies. This avoids unhealthy competition among the insurance companies. Also, there is no price war within the insurance companies, since tariff regulations put a ban on such practices.

In the absence of tariffing, companies can, charge lower premiums without calculating risk weightage. Hence, such companies can risk the danger of bankruptcy. Thus, tariffs were like a protection for the insuring public, shareholders and employees of the company.

Now, the authorities feel that the non-life insurance market has matured enough, and to grow further, it needs to remove this protection which is hampering the growth.

De-tariffing will enable companies to take their own decisions on premium rates, and to be profitable as well.

However, according to a CRISIL study of 12 public and private sector non-life insurance companies, underwriting losses will increase after de-tariffing.

This is likely to increase competition in profitable business segments such as fire and engineering, translating into lower returns in terms of premium generated from these segments, the report said.

The report also said that returns from severely loss-making segments such as motor third-party insurance are likely to improve, as industry players increase premium rates to cover future expected claims more efficiently than the current practice.

Post de-tariffing, underwriting losses will increase from the current levels as benefits from the increase in motor third-party premium are not expected to be sufficient to completely offset the impact of the reduction of premium levels in the profitable segments, the report added.