Areas of Work: Insurance

Want to work in the insurance industry but not sure what exactly it is you’ll do? Let gradmalaysia take you through the areas of work within insurance.
Jacie Tan

The insurance industry provides livelihoods to thousands of professionals from a wide range of disciplines in the nation. According to the Life Insurance Association of Malaysia (LIAM), Malaysia’s life insurance industry is poised to record high growth in terms of new business premiums in 2017 (as reported by The Star Online). So, if you’re looking to start your career in this industry, here’s what you could be doing.

1) Actuary 

Actuaries are involved in analysing the financial risks of insurance policies and making priced decisions based on these. Actuaries create and manage programmes which reduce the financial loss to the company due to the expected and unexpected events.

The actuary helps design plans and evaluates the financial risks a company takes when it sells an insurance policy or offers a pension programme. For example, property or casualty actuaries calculate the expected number of claims resulting from vehicular accidents, which varies depending on the insured person's age, sex, driving history, type of car, etc.

They ensure that the premium charged for such insurance will enable the company to cover claims and other expenses. This premium must be profitable and yet competitive with other insurance companies. An actuarial position in a company is considered high-profile as they usually serve as vice-presidents and presidents of the company.

2) Claims

The claims department is in charge of all claims made by clients. The claims manager must ensure that the claims made by a client is eligible according to insurance contract. During this, the claims manager must also be sure that a loss has actually taken place. It's their responsibility to collect enough evidence and gain knowledge to find out about the causes of the loss and the extent of the loss. Only then can the insurance company make the appropriate payment.

3) Loss adjusters

Loss adjusters, also called assessors, can be part of the insurance company or independent professionals by themselves. They play an important role in the insurance business as they are the ones who survey a loss.

Loss adjusters work closely with the claims department of an insurance company in investigating the causes of the loss and extent of the loss. Besides knowing the various kinds of insurance coverage, they need to do a bit of detective work to make a report on losses. Loss adjusters require a licence from the insurance regulator to practise.

4) Insurance agents 

Insurance agents represent the insurance company and work to acquire prospective clients for the company. Insurance agents can act on behalf of not more than two general insurance companies and one life insurance company at a time. To be an insurance agent, one must sit for and pass the Pre-Contract Examination For Insurance Agents (PCEIA) conducted by Malaysian Insurance Institute (MII).

5) Insurance brokers 

Insurance brokers represent clients and work as an intermediary between insurance companies and their clients. Their main job is to place their clients with suitable insurance companies that most fit their needs.

Pre-services include noting down the kind of insurance their clients need and presenting the insurance proposal to a company that they think has the programmes that fits best with their clients’ needs. The insurance company then pays them brokerage. Post-services offered by them include making claims toward insurance companies for their respective clients.

Note that insurance brokers require a licence from the insurance regulator and a professional indemnity policy before they can commence business.

6) Underwriting

Insurance brokers and agents submit insurance proposals to insurance companies on behalf of their clients. Insurance proposals include the insurance needs of the client. From there, these proposals will go through a qualifying process handled by an underwriter.

An underwriter assesses the risks involved in the insurance proposal and decides to accept or reject them. Upon accepting, the underwriter will also compose the terms and conditions of the insurance contract weighing on the degree of the risk. There are many different types of insured risks but an underwriter determines how these risks should be insured. In a case of high-risk insurance, the underwriter can pass part of the risk to one or more insurers. This is called reinsurance.

The role of an underwriter had become very specialised over the years as some insurance involves very large risks like maritime, aeronautics and, oil and gas platforms. Risks like these are very complex and a mastered specialist underwriter is required for the job.

7) Investment

An insurance company makes profits through underwriting and investment. However, sometimes underwriting may cause some loss to the company so investment is important to balance out the loss. Insurance works in the principle of pooled risks, in which a large number of people pay money (called insurance premiums) into a common fund used to compensate anyone in the pool who has experienced an insured loss.

However, the common fund grows larger if there are no losses within the pool. Therefore, the insurance company invests the money in the pool. Investment personnel plan the investment scheme for the company to ensure high returns. Planning the scheme involves ensuring that the company is financially strong so that all claims can still be settled financially.

8) IT

There's always room for those you techies out these in any business. The insurance business deals with a large database containing all sorts of insurance-related information stored in computers. The most important thing is to be able to manage these databases well so they can be obtained easily and flow well. Working in a IT field in insurance company requires coming up with the best solution for the company to manage its data and be able to adapt it according to the changes of the company. 

9) Accounting

As with all businesses, insurance is a money business. Accounting in insurance involves recording all business transactions made. It reveals the financial status of the company like loss and profits and assets and liabilities. The accounting department must make sure that the accounts are in line with various laws like the Companies Act, Insurance Act and Income Tax Act.

10) Marketing

Insurance is a service for sale and naturally will need a marketing team backing it. Marketing in insurance involves researching on the current insurance needs of clients. With ongoing research, the department will have strong background knowledge in the business and its trends, and be able to change or adapt its marketing strategy to meet the demands of clients and at the same time profiting the company.

The marketing department assists insurance brokers and agents by providing them guidance and training. This in turn helps them achieve their business targets and also post-sales service to their clients.

11) Reinsurance

Even insurance companies need to be insured. It is very much like regular insurance schemes, only on a bigger level. Reinsurance involves insuring the company that is negotiating the terms and conditions of the insurance. For example, a piece of high-value property such as an airplane is considered a very high-risk insurance for insurers and is a big liability. So, insurers reduce their risks by spreading it out among other insurers. Reinsurance can be a separate department by itself or a specialised reinsurance company.