• Office and administrative occupations usually require a high school diploma, while employers prefer college graduates for sales, managerial, and professional jobs.
• Medical service and health insurance is the fastest growing sector of the insurance industry.
• While corporate downsizing, computerization, and changes in business practices will limit job growth, numerous job openings are expected in this large industry to replace those who leave and to accommodate the insurance industry’s expansion into the broader financial services field.

The insurance industry consists mainly of insurance carriers, or “insurers,” and insurance sales agents. In general, insurance carriers are large companies that provide insurance and assume the risks covered by the policy. Insurance sales agents sell insurance policies for the carriers and work either for themselves or directly as employees of the insurer. While the majority of sales agents are independent and are free to market policies of a variety of insurance carriers, others may work exclusively for one insurance carrier, selling only that carrier’s policies. Some carriers market without agents, using the telephone, mail, and—increasingly—the Internet.

Insurance carriers offer a variety of insurance policies. Life insurance policies provide financial protection to beneficiaries—usually spouses and dependent children—upon the death of the insured. Disability insurance provides income if a person is unable to work, and health insurance pays the expenses resulting from accidents and sickness. Annuities (contracts that provide a periodic income at regular intervals for a specified period) provide a steady income during retirement for the remainder of one’s life. Property-casualty insurance protects against loss or damage to property resulting from hazards such as fire, theft, and natural disasters. Liability insurance shields policyholders from financial responsibility for injuries to others or damage to other people’s property. Most policies, such as automobile and homeowner’s insurance combine both property-casualty and liability coverage. Companies that write this kind of insurance are called property-casualty carriers.

Some insurance policies cover groups of people, ranging from a few to thousands of individuals. These policies usually are issued to employers for the benefit of their employees. Among the most common of these policies are group life and health plans. Insurance carriers also write a variety of specialized types of insurance, such as real estate title insurance and employee surety and fidelity bonding. A recent act of Congress has allowed insurance carriers and other financial institutions, such as banks and securities firms, to sell one another’s products. As a result, more insurance carriers now sell financial products such as securities, mutual funds, options and derivatives, and various retirement plans. This is most common in life insurance companies that already sell annuities; however, property and casualty companies also sell financial products. In order to expand into one another’s markets, insurance carriers, banks, and securities firms have recently engaged in numerous mergers. This allows the merging companies access to each other's client base and geographical markets.

In the last few years, insurance carriers have discovered that the Internet can be a powerful tool for reaching potential and existing customers. Most carriers use the Internet simply to post company information such as sales brochures and product information, financial statements, and a list of local agents. However, an increasing number of carriers are starting to expand their websites to include online access to accounts and billing information. A few even allow customers to submit claims online, and also provide insurance quotes from information submitted by customers on the website. In the future, carriers’ websites will allow customers to purchase policies through the Internet without ever speaking to a live agent.

In addition to individual carrier-sponsored websites, several “lead-generating” sites have emerged. These sites allow potential customers to input information about their insurance policy needs. For a fee, these websites forward customer information to insurance companies, which review the information and, if they decide to take on the policy, contact the customer with their offer. This gives consumers the freedom to accept the best rate.

The insurance industry also includes a number of independent organizations that provide a wide array of insurance-related services to carriers and their clients. One such service is the processing of medical claims forms for medical practitioners. Other services include loss prevention and risk management. Also, insurance companies hire independent claims adjusters to investigate accidents and claims for property damage and assign a dollar estimate to the claim.

Other organizations are formed by groups of insurance companies to perform functions that would result in a duplication of effort if each company carried them out individually. For example, service organizations are supported by insurance companies to provide loss statistics, which the companies use to set their rates. Information institutes produce and distribute relevant statistics and educational materials on the different lines of insurance to teachers and schools, and prepare news releases concerning developments of general interest to the public. Trade associations actively work with regulators and legislators to develop or amend the many rules and laws that affect this highly regulated industry. This segment of the industry also is supported by numerous educational institutions that grant certifications and designations to insurance industry employees, as well as provide a source of continuing education that is required by many State licensing bureaus.

Insurance sales agents often visit prospective and existing customers’ homes and places of business to market new products and provide services. Claims adjusters and auto damage appraisers frequently leave the office to inspect damaged property. Occasionally, claims adjusters are away from home for days when they travel to the scene of a disaster—such as a tornado, flood, or hurricane—to work with local adjusters and government officials. Insurance investigators often work irregular hours to conduct surveillance or to contact people who are not available during normal working hours.

A small but increasing number of insurance employees spend most of their time on the telephone working in call centers, answering questions and providing information to prospective clients or current policyholders. These jobs may include selling insurance, taking claims information, or answering medical questions. Because these centers operate 24 hours a day, 7 days a week, some of their employees must work evening and weekend shifts. The irregular business hours in the insurance industry provide some workers with the opportunity for part-time work. Part-time employees make up 8.1 percent of the workforce. As would be expected in an industry dominated by office and sales employees, the incidence of occupational injuries and illnesses among insurance workers is low. In 1999, only 1.9 and 0.9 cases per 100 full-time workers were reported in the insurance carriers and agents and brokers segments, respectively, compared with an average of 6.3 for all private industry.

Insurance carriers are mostly large employers, as shown in chart. Over half of their employment is in establishments with 250 or more employees, and 80 percent is in establishments with 50 or more workers. Conversely, small establishments dominate the agents and brokers segment of the industry, with nearly all employing fewer than 50 workers (see chart). Approximately 40 percent work in establishments with fewer than 10 employees, and another 30 percent work in establishments with 10 to 49 employees.

Many insurance carriers’ home and regional offices are located near large urban centers. Insurance workers who deal directly with the public—sales agents and claims adjusters—are located throughout the country. Almost all insurance sales agents work out of local company offices or independent agencies. Many claims adjusters work for independent firms located in small cities and towns throughout the country.

Customer service representatives , for example, process insurance policy applications, changes, and cancellations. They review applications for completeness, compile data on policy changes, and verify the accuracy of insurance company records. They may also process claims and sell new policies to existing clients. These workers are taking on increased responsibilities in insurance offices, such as handling most of the continuing contact with clients. An increasing number of customer service representatives work in call centers that are open 24 hours a day, 7 days a week, answering clients’ questions, updating policy information, and providing potential clients with information regarding types of policies issued.

About 3 in 10 insurance workers have a job in a management and business and financial operations occupation. Marketing and sales managers constitute the majority of managers in carriers’ local sales offices and in the insurance sales agents segment. They sell insurance products, work with clients, and supervise staff. Other managers who work in their companies' home offices are in charge of departments such as actuarial calculations, policy issuance, accounting, and investments.

Claims adjusters, examiners, and investigators decide whether claims are covered by the customer’s policy, confirm payment, and, when necessary, investigate the circumstances surrounding a claim. Claims adjusters work for property and liability insurance carriers or for independent adjusting firms. They plan and schedule the work required to process claims, which includes interviewing the claimant and witnesses, consulting police and hospital records, and inspecting property damage to determine the extent of the insurance company’s liability.

In life and health insurance carriers, the counterpart of the claims adjuster is the claims examiner. Examiners in the health insurance field review health-related claims to see if costs are reasonable based on the diagnosis. Examiners check claim applications for completeness and accuracy, interview medical specialists, and consult policy files to verify information on a claim. Claims examiners in the life insurance field review causes of death, and also may review new applications for life insurance to make sure applicants have no serious illnesses that would prevent them from qualifying for insurance. Claims examiners in property and casualty insurance review claims to ensure that payments and settlements have been made in accordance with company practices and procedures. They ensure that adjusters have followed proper methods when investigating claims. Examiners may consult with lawyers on claims requiring legal action.

Insurance investigators handle claims in which companies suspect there might be fraudulent or criminal activity, such as arson cases, false workers’ disability claims, staged accidents, or unnecessary medical treatments. Investigators usually perform database searches on suspects to determine whether they have a history of attempted insurance fraud. Then, investigators may visit claimants and witnesses to obtain a recorded statement, take photographs, inspect facilities, and conduct surveillance on suspects. Investigators often consult with legal counsel and are expert witnesses in court cases as well.

Auto damage appraisers usually are hired by insurance companies and independent adjusting firms to inspect auto damage after an accident and provide unbiased repair cost estimates. Claims adjusters and auto damage appraisers can work for insurance companies, or they can be independent or public adjusters. Insurance companies hire independent adjusters to represent their interests while assisting the insured, whereas public adjusters are hired to represent the insured’s interests against insurance carriers.

Loss control representatives assess various risks faced by insurance companies. They inspect insurance applicants and business operations and analyze historical data regarding workplace injuries, automobile accidents, natural hazards, and conditions that may result in catastrophic physical and financial loss. They might then recommend, for example, that a factory add safety equipment, that a house be built to withstand environmental catastrophes, or that incentives be implemented to encourage automobile owners to install air bags in their cars. Because these standards can greatly reduce the probability of loss, loss control representatives are increasingly important to both insurance companies and the insured.

Another important management and business and financial occupation in insurance is that of underwriter. These professionals evaluate insurance applications to determine the risk involved in issuing a policy. They decide whether to accept or reject an application and determine the appropriate premium rate for each policy.

About 13 percent of wage and salary employees are sales staff, who sell policies to individuals and businesses. Insurance sales agents may work as exclusive agents, or captive agents, selling for one company or as independent agents selling for several companies. Through regular contact with clients, agents are able to update coverage, assist with claims, ensure customer satisfaction, and obtain referrals. Insurance sales agents may sell many types of insurance, including life, annuities, property-casualty, health, or disability. Also, many insurance sales agents are involved in “cross-selling” or “total account development,” which means that, besides insurance, they have become licensed to sell mutual funds, annuities, and other securities. These agents usually find their own customers and ensure that policies they sell meet the specific needs of their policyholders.

The insurance industry employs relatively few people in professional or related occupations; however, these professionals are essential to company operations. For example, lawyers representing insurance companies are needed to defend clients who are sued, especially when potentially large claims are involved. They also review regulations and policy contracts. Nurses and other medical professionals advise clients on wellness issues and on medical procedures covered by their managed-care plan. Computer systems analysts, computer programmers, and computer support specialists are needed to analyze, design, develop, and program the systems that support the day-to-day operations of the insurance company.

Actuaries represent a relatively small proportion of insurance employment, but they are vital to the industry’s profitability. Actuaries study the probability of an insured loss and determine premium rates. They must set rates so that there is a high probability that premiums paid by customers will cover claims, but not so high that their company loses business to competitors.

Graduation from high school or business school is adequate preparation for most beginning office and administrative support jobs. Courses in word processing and business math are assets, and the ability to operate computers is essential. These and other special skills also help beginners advance to higher paying positions. On-the-job training usually is provided for clerical jobs such as customer service representatives. Because customer service representatives in call centers must be knowledgeable about insurance products in order to provide advice to clients, more States are requiring customer service representatives to become licensed like agents are.

Management, business, financial, and professional jobs require the same college training as similar jobs in other industries. Managerial positions usually are filled by promoting college-educated employees within the company. For beginning underwriting jobs, many insurance companies prefer college graduates who have a degree in business administration or a related field. However, some companies prefer to hire liberal arts graduates at a lower cost and many insurers send them to company schools or enroll them in outside institutes for professional training. As an underwriter’s career develops, it is beneficial to earn the specialty designation, Associate in Commercial Underwriting (AU). This certification, which is administered by the Insurance Institute of America, typically takes 1 to 2 years to earn and requires the completion of a series of courses and examinations. More advanced certification includes the Chartered Property and Casualty Underwriter (CPCU) designation which takes about 5 years and requires passing 10 exams covering topics in insurance, economics, finance, law, accounting, ethics, management, and risk management. Those working in the life and health sectors of the insurance industry can earn the Chartered Life Underwriter (CLU) or Registered Health Underwriter (RHU) designations. (Additional information on these designations is available in the Handbook statement on insurance underwriters).

Most companies prefer to hire college graduates for claims adjuster and examiner positions. No specific college major is required, although most workers in these positions have a business, accounting, engineering, legal, or medical background. Some States require independent, or public, adjusters to be licensed. Most adjusters also find it beneficial to earn one or more professional designations, such as the Associate in Claims (AIC); Registered Professional Adjuster (RPA); Certified Professional Public Adjuster (CPPA) or Senior Professional Public Adjuster (SPPA); and the Associate, Life and Health Claims (ALHC) or the Fellow, Life and Health Claims (FLHC). Many State licenses and professional designations require continuing education for renewal. Continuing education is important because adjusters and examiners must be knowledgeable about changes in the laws, recent court decisions, and new medical procedures. (Additional information on these designations is available in the Handbook statement on claims adjusters, appraisers, examiners, and investigators).

Auto damage appraisers typically begin as auto body repairers, and then are hired by insurance companies or independent adjusting firms. While auto damage appraisers do not require a college education, most companies require them to have at least a bachelor’s degree. Only four States—Florida, Massachusetts, Rhode Island, and Wyoming—require auto damage appraisers to be licensed. As for adjusters and examiners, continuing education is very important for appraisers because of the new car models and repair techniques that are introduced each year.

Most insurance companies prefer to hire former law enforcement or private investigators as insurance investigators. Many experienced claims adjusters or examiners also can become investigators. Licensing requirements vary among States. Most employers look for individuals with ingenuity and who are persistent and assertive. Investigators must not be afraid of confrontation, should communicate well, and should be able to think on their feet. Good interviewing and interrogation skills also are important and usually are acquired in earlier careers in law enforcement.

For actuarial jobs, companies prefer candidates to have degrees in actuarial science, mathematics, or statistics. However, candidates with degrees in business, finance, or economics also are becoming more common. Actuaries must pass a series of national examinations to become fully qualified. Completion of all the exams takes from 5 to 10 years. Some of the exams may be taken while an individual is in college, but most require extensive home study. Many companies grant study time to their actuarial students to prepare for the exams.

Although some employers hire high school graduates with potential or proven sales ability for entry-level sales positions, most prefer to hire college graduates. All insurance sales agents must obtain a license in the States in which they plan to sell insurance. In most States, licenses are issued only to applicants who complete specified courses and pass written examinations covering insurance fundamentals and State insurance laws. New agents receive training from their employer either at work or at the insurance company’s home office. Sometimes, entry-level employees attend company-sponsored classes to prepare for examinations. Others study on their own and, as on-the-job training, accompany experienced agents when they meet with prospective clients. After obtaining a license, agents must earn continuing education credits throughout their careers in order to remain a licensed insurance sales agent.

Insurance sales agents wishing to sell securities and other financial products must also meet State licensing requirements, which include passing an examination. Before agents can qualify as securities representatives, they must pass the General Securities Registered Representative Examination (Series 7 exam), administered by the National Association of Securities Dealers (NASD). This test measures the prospective representative's knowledge of the securities business, customer protection requirements, and recordkeeping procedures. To further demonstrate competency in the area of financial planning, many agents also find it worthwhile to obtain a Certified Financial Planner (CFP) or Chartered Financial Consultant (ChFC) designation.

Advancement opportunities are relatively good in the insurance industry. Office and administrative support workers can advance to higher paying claims adjusting positions and entry-level underwriting jobs. Sales workers may advance by handling greater numbers of accounts and more complex commercial insurance policies. Having a master’s degree, particularly in business administration or a related field, helps advancement into higher levels of management. Many insurance companies expect their employees to take continuing education courses to improve their professionalism and their knowledge of the industry.

Insurance carriers offer attractive benefits packages, as often is the case with large companies. Yearly bonuses, retirement investment plans, insurance, and paid vacation often are standard. Insurance agencies, which generally are smaller, offer less extensive benefits.

Unionization is not widespread in the insurance industry. In 2000, 2.3 percent of all insurance workers were union members or were covered by union contracts, compared with 13.5 percent of workers throughout private industry.

Medical service and health insurance is the fastest growing sector of the insurance industry. Laws to help people purchase health insurance should boost demand. As the population ages, more people are expected to buy health and long-term care insurance, as well as annuities and other types of pension products sold by insurance sales agents. Population growth will stimulate demand for auto and homeowners insurance. Population growth also will create demand for businesses to service its needs, and these businesses will need insurance as well. Moreover, large liability awards are motivating many individuals and businesses to purchase liability policies to cover lawsuits brought by people claiming damage or injury by a particular person or product.

Many successful insurance companies will recognize the Internet’s potential as a powerful marketing tool. Not only might this reduce costs for insurance companies, but it could also enable many clients to first turn to the Internet as a source of information on their policies, to obtain quotes, or to submit claims. As insurance companies begin to offer more information and services on the Internet, some occupations such as insurance sales agents could experience slower employment growth.

Sales agents working in the property and casualty market, particularly in auto insurance, will be most affected by increasing reliance on the Internet. Auto policies are relatively straightforward and can be issued more easily without the involvement of a live agent. Also, auto premiums tend to cost more per year than do other types of policies, so people are more likely to shop around for the best price. The Internet makes it easier to compare rates between companies. As a result, the Internet will create more competition among carriers, and rates could fall. Faced with more competition and a greater need to contain costs, companies could begin to reduce employment of agents.

Insurance companies will continue to face increased competition from banks and securities firms entering the insurance markets. As more banks and securities firms begin to sell insurance policies, increasing numbers of insurance sales agents will be employed in such firms, rather than in insurance companies. In order to stay competitive, some insurance companies will need to either expand their financial service offerings, or establish a partnership with a bank or brokerage firm.

Productivity gains caused by the greater use of computer software will continue to limit the growth of certain jobs within the insurance industry. For example, the use of underwriting software that automatically analyzes and rates insurance applications will limit growth of underwriters. Also, computers that are linked directly to the databases of insurance carriers and other organizations have greatly facilitated communications among sales agents, adjusters, and insurance carriers, making employees much more productive. Furthermore, efforts to contain costs have led to an increasing reliance on customer service representatives to deal with the day-to-day processing of policies and claims.

Sales agents and adjusters still are needed to meet face-to-face with clients. Many clients prefer to talk directly with an agent, especially regarding complicated policies. Opportunities will be best for sales agents who sell more than one type of insurance or financial service. Adjusters will still be needed to inspect damage and interview witnesses. Many adjusters are now getting investigators’ licenses to make themselves more attractive to employers. Insurance investigators should be in strong demand due to increases in the number of claims in litigation and in the number and complexity of insurance fraud cases.

For information on the property and casualty insurance industry, contact:

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