Introduction to Insurance
Insurance is a means of protection from financial loss neither from the company or your partner. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.
An entity which provides insurance is known as an insurer, insurance company, or insurance carrier. A person or entity who buys insurance is known as an insured or policyholder.
The insurance transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer’s promise to compensate the insured in the event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms, and must involve something in which the insured has an insurable interest established by ownership, possession, or preexisting relationship.
The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated. The amount of money charged by the insurer to the insured for the coverage set forth in the insurance policy is called the premium. If the insured experiences a loss which is potentially covered by the insurance policy, the insured submits a claim to the insurer for processing by a claims adjuster.
Types of insurance
Property
Property insurance includes a range of covers, which may be needed by businesses to protect their physical property, such as buildings, machinery and stock. Private individuals need property insurance too, but this is typically provided in a home insurance policy.
Pecuniary
‘Pecuniary’ means relating to money and pecuniary insurance covers businesses against purely financial losses (e.g. from fraud, legal expenses or business interruption) rather than physical damage to property.
Motor insurance
Available for private cars, motorcycles, commercial vehicles and fleet insurance. Motor is one of the compulsory insurance classes and anyone using a motor vehicle on the public highway must have it.
Liability insurance
We all have a legal duty to behave reasonably to others. If we injure someone or damage their property through negligence, we are legally obliged to pay compensation. Liability insurance is there to insure individuals and businesses against this risk.
Marine and aviation insurance
Marine policies cover the property or ‘interest’ insured against perils of the sea such as bad weather, stranding, collision, fire and seizure, while aviation insurance covers damage on the ground or in the air, and liabilities for cargo and passengers.
Life assurance
A life assurance (or insurance) policy pays a specified sum if the person assured (or insured) dies, or if they survive a given term of years.
Health and protection insurance
Personal accident and sickness cover pays out in the event of death, permanent disablement or loss of eyes or limbs due to accident or if the insured is unable to work due to accident (or sickness). Private Medical insurance (PMI) pays for inpatient and outpatient treatment outside the NHS. Creditor insurance covers credit repayments (e.g. on mortgage and credit card loans) in the event of unemployment, accident or sickness.
Scope of Insurance
Insurance companies have two principal functions: underwriting and investment.
Underwriting involves the measurement and calculation of risk. The premiums charged by an insurer reflect this risk. They’re appropriate and commensurate with the degree of likelihood that the insurance company will have to pay a claim if it writes a given policy.
The investment function is equally important. A well-run insurance company will have, at least in the long run, a surplus of income from premiums over actual payouts of claims.
This surplus must be properly and equitably invested, so insurance companies have substantial staffs dedicated to earning good returns on this money.
The insurance industry employs a large number of people over a range of positions. This is hardly an exhaustive list but it includes some of the more significant and better-paying lines of employment in this industry.
Skills and Competencies needed in Insurance
Communication
In an insurance role, you’ll be required to communicate with internal and external stakeholders. This is why employers seek candidates who stand out when it comes to their communication skills.
When applying for an insurance role, be sure to showcase any experiences, courses, or volunteer work that have developed your communication skills and be sure to highlight them in your application.
Customer service
As an insurance professional, you will be managing multiple relationships and priorities. Ensuring that you are understanding your customers’ needs, professionalism, managing your time and their expectations effectively and delivering what you promise can play a key role in a successful insurance career.
Any experience that helps you demonstrate your ability to respond to inquiries, manage a high volume of traffic, deliver some ‘tough messages’ or your commitment to go above and beyond are great selling points for your application and interview.
Teamwork
Though there may be times when you are working independently, you will ultimately be working as part of a team to achieve your unit or organization-wide objectives. Working collaboratively to identify new business opportunities, generate a solution to a problem or emerging issue, or develop a strategy to manage a potential risk effectively are just a few examples of ways you may find yourself working with your colleagues.
Think about school projects, jobs you have had, committees you were a part of or extracurricular activities that had you as a part of a team (for example: band, sports teams, debate clubs, etc.). How did you go about achieving success? What role did you play? How did you capitalize on each other’s strengths? Overcome challenges?
These are all great examples to showcase your ability to work as part of a team.
Professionalism
Insurance is all about peace of mind.
It is important that those working in the sector are seen as the professional they are. Demonstrating due diligence, paying attention to detail, wearing appropriate business attire, maintaining ethical standards and confidentiality, staying up to date on current trends/products and exercising sound judgment are all qualities that make up the package of the professional people are entrusting to help them to protect the things they hold most dear.
If you have the opportunity to engage an employer in-person or are brought in for an interview, be sure to take steps to put your best foot forward and convey that you are the professional the employer is looking for to join their team.
Results-oriented
On virtually any career path, success is not just based on doing the job.
Rather, it is often judged by the results you have achieved. Whether you are bringing on a new client, reducing the degree of risk associated with a particular client’s needs, developing a new product or settling a claim fairly and efficiently, there are lots of ways to achieve a positive result in your career as an insurance professional.
In the application process, be sure to focus in on not just what you did, but the results and outcomes from each of your previous roles.
Curiousity/quick learning
It’s important to employers that you’re eager to stay on top of industry developments, news, trends and information. Since insurance affects virtually everything we do in life and in business, there is a lot of information to keep on top of in an insurance role and it’s crucial that you be in the know.
Be ready to commit some time to continuous learning in different forums, including networking, research and professional development.
Technical Skills
Insurance professionals must be comfortable working with computers and making math calculations. They may use a variety of software, including customer relationship management programs, to maintain customers’ files and underwriting software to review insurance applications. Because insurance professionals must calculate premiums and amounts of coverage, they should know algebra, calculus and statistics.
Organizational Skills
Because insurance professionals handle customer files and records, they must have efficient organizational skills. They are also responsible for handling policy renewals and organizing files on potential customers. A good system ensures that a customer’s file, which contain personal information such as Social Security number, financial income and driving record, is properly maintained.
Analytical Skils
When evaluating a customer’s claim or calculating the cost for an insurance policy, insurance professionals must exercise good analytical skills. Insurance sales agents are responsible for reviewing financial data to determine the best insurance policies and plans for their clients. Insurance underwriters analyze insurance applications to determine whether to extend coverage to a client. In some instances, insurance underwriters need to review a person’s credit score and medical documents to determine the risk of insuring a client.
ICT skills
The majority of tasks in insurance jobs are completed with the use of various forms of ICT. Excellent computer skills and an understanding of or experience of using the various types of software used for claims and underwriting is a huge advantage when applying for this type of work. It may be necessary to update these skills on a fairly regular basis to keep on top of technological changes within the industry.
Job Options and Career Opportunities under Insurance
- Actuary: An actuary holds an important technical job. She’s trained in statistical analysis and the scientific determination of insurance policy terms and premiums. It’s the actuary’s job to measure and calculate risk factors so that premiums can be charged accordingly.
- Insurance appraiser: This position involves evaluating claims that come into an insurance company from the angle of assessing the value of damaged property. He gauges the likely cost of repairing or replacing the property. This helps to determine whether the insurance company will pay the claim and, if so, how much the company will pay.
- Insurance claims adjuster: This role is similar to that of an appraiser. Some insurance companies employ both while others might rely on one or the other. An adjuster typically has broader duties, however, including research such as interviewing witnesses and analyzing police reports.
- Insurance claims examiner: This position also entails much of the same responsibilities and duties as an adjuster or an appraiser. It’s something like an appraiser and an adjuster rolled into one position.
- Insurance investigator: An investigator is charged with preventing and containing incidences of insurance fraud. This position is most commonly available with companies that insure against bodily injury, property damage, and liability.
- Insurance sales agent: An agent might work for either the insurance company itself or for an independent insurance broker. It’s her job to sell the company’s policies to consumers.
- Insurance underwriter: Underwriters evaluate the risk an insurance company is likely to take on when it issues a policy. Underwriters recommend appropriate premiums.
- Money managers and securities research professionals: These employees oversee the investment side of the business, ensuring that premiums paid to the company are invested and maintained to the company’s best advantage.
- Agent and Broker: Agents and brokers advise people and organizations on how to protect things they value by selling customers insurance contracts. You will be the first person contacted after an accident, fire or injury. An understanding of insurance contracts is essential to this type of occupation. A career as an agent or broker can be financially rewarding. This work is highly time-flexible, requires some background in business and is best if you enjoy interacting with people.
- Service Representatives: Service representatives are the link in the field between agents who sell policies and insurance companies who write the policies. Field representatives must be good listeners and communicators. This position requires knowledge of your companies products and ability to establish good rapport with those working for your companies. A background in liberal arts can be a great preparation for this type of position.
- Loss Control Specialist: As a loss control specialist your job is to help keep accident and losses to a minimum. You will visit factories, shop floors and businesses to identify potential hazards and help to eliminate them. In the health insurance area you might work with an organization to promote preventive health care in the workplace or to limit exposure to certain types of ailments. This work requires an understanding of safety management or engineering. A combination of a technical major and a business major would be outstanding preparation for this job.
- Risk Manager: A risk manager is employed by an organization to help identify the risks that it faces and to make recommendations for dealing with these risks. The recommendations may include the purchase of insurance, adoption of precautionary measures and presentations to upper management. Risk managers are involved in the management of employee benefit plans.
- Underwriter: Underwriters decide whether to provide insurance to applicants seeking coverage. An underwriter evaluates an applicant’s exposure to risk and decides whether an applicant meets an insurer’s standards. An underwriter may also become involved in setting prices for insurance applicants.
Admission Requirements for the study of Insurance in Nigeria
The O’level subject combination and requirements needed to study Insurance;
You require; Five SSCE credit passes including English Language, Mathematics, Economics plus any two of Accounting, Business Methods, Commerce, Government, Geography and Statistics.
In UTME, please note that English Language is Compulsory for this course. Therefore, the three (3) other JAMB UTME subject combination needed to study Insurance under the Faculty of Administration in the above Universities include;
Mathematics, Economics and one other subject
