An actuary applies mathematical and statistical methods to assess risk in the insurance and finance industries. They also execute all actuarial assignments related to product development, evaluate the company’s risk exposure, determine product pricing and financial position. They ensure a balance between funds available for payment of claims and circulated in investments. Actuaries either work in senior management positions of insurance companies or in actuarial consulting firms.
When you want to buy an insurance policy, you contact an agent. What do companies do when they want the same? They call up an insurance broker at a broking firm. Brokers are intermediaries who represent clients needing insurance coverage. The broker’s job is to study the available products, match the right ones to the client’s needs, select the best insurance company, and negotiate the best terms for the client. They also help make and settle claims.
An underwriter is responsible for evaluating the risks involved in insurance proposals and deciding whether to accept or reject a proposal. Since insurance companies provide insurance for others – individuals and companies – against different types, the underwriter’s job is at the heart of the business.
The position has areas of specialisation with underwriters focusing on specific fields and classes of insurance. This allows them to master the specific skills, knowledge and issues related to complex projects and industries. For example, there are underwriters specialising in oil and gas, aviation, shipping and aerospace.
The reinsurance department helps to spread risk. Reinsurance is concerned with insuring the insurer (that is, the insurance company) so that in the event of a big claim, the insurer does not bear the full impact of the financial outlay alone. The department is responsible for managing an insurance company’s overall risk. It plans the reinsurance programme and negotiates terms of reinsurance with the reinsurer. A specialist in this field could be employed by the insurance company and the reinsurance company.
In Malaysia, there are six general reinsurance companies but because reinsurance is a global business, there is demand for good reinsurers worldwide, says Persatuan Insurans Am Malaysia (PIAM).
The insurance business inevitably involves claims being made. The claims department handles all matters related to processing and settling claims.
The work can be detailed as the department needs to investigate cause of losses, evaluate extent of the loss and sometimes make a judgment call on whether a loss is covered by a policy.
A loss adjuster or assessor works in tandem with the claims department. He or she is an independent professional from a loss-adjusting firm, which is appointed by an insurance company to investigate the cause of a claimed loss, assess and determine the extent of the loss. He or she also advises on measures to prevent or minimise loss.
At any given time, premiums might exceed the claims made against policies. A client might make regular payments of premiums (monthly, quarterly or yearly) but only claim perhaps once or twice during the term of the policy. During the time lag between payments and claims, insurers are in possession of large sums that they invest carefully.
The investment department is at the heart of the action. It is responsible for selecting the right vehicles to invest the funds, manage the investments, and generate high returns. Insurers need to access funds to pay off claims, hence the department must ensure that investments are in secure vehicles that will not jeopardise the company’s financial position or ability to settle claims.
At times, the income from investments could compensate for underwriting losses or lower income.
The marketing department is responsible for overall marketing activities. This could involve general brand building activities, campaigns like contests, and promotions and public relations initiatives like corporate social responsibility projects. The department may also supervise the agency force to support, motivate and train agents.
An agent’s job is to sell policies from a particular company. However, many agents have also taken on the role of financial adviser, helping their customers plan their finances by using insurance as a tool.
Being an agent is one way to be a business owner because you work for yourself. While agents belong to agencies, they enjoy flexible working hours and the benefits of working for themselves. But agents are still representatives of a company and are expected to behave in a professional manner.
The department manages and develops the operations and customer service teams to provide high standards of customer service in a timely, efficient and professional manner. It also reviews systems and processes to ensure that all customer service practices meet agreed service standards, documented quality procedures, BNM requirements and in line with product requirements.
Insurance companies are large organisations requiring the support of many departments to function properly. Some of the opportunities include: ACCOUNTING: An accountant’s job in an insurance company is to record all business transactions in line with the principles and practice of accounting followed in the insurance industry to show the results of the business (profit or loss) and the true financial position (assets and liabilities) of the company. The accounting must comply with various laws, such as the Companies Act, Income Tax Act and Financial Services Act 2013.
HUMAN RESOURCES form another backbone of an organisation. The HR department ensures that manpower planning is managed properly and the talent pipeline is healthy for business continuity. It also performs a range of duties, from salary and administration to training, counselling and more.
Other essential departments include information technology, legal, company secretarial and administration. Each might require some specialist knowledge and skills for its specific needs.