Careers in Insurance and Risk Management

CAREERS IN INSURANCE AND RISK MANAGEMENT ★ '%%. :9>I>DC

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>CH>9:G<J>9: ★ INDUSTRY OVERVIEW AND TRENDS ★ ON THE JOB: REAL PEOPLE PROFILES ★ PROFILES OF LEADING COMPANIES ★ POSITIONS AND RESPONSIBILITIES

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Guide Careers in Insurance & Risk Management

2009 EDITION

Careers in Insurance & Risk Management

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Careers in insurance and risk management 2009 Edition ISBN: 978-1-58207-899-1

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Careers in Insurance & Risk Management

CHAPTER

123 1 At a Glance

5 The Industry

17 The Companies

6 Overview

18 The Big Picture

8 The Bottom Line

18 Major Players

9 Industry Breakdown 10 The Opportunity Breakdown 14 Industry Rankings 15 Industry Trends

Careers in Insurance & Risk Management

conte 2009 EDITION

4567

39 On The Job

49 The Workplace

40 The Work 40 Real People Profiles

57 Getting Hired

50 Lifestyle

58 The Recruiting Process

50 Hours

60 Interview Tips

50 Workplace Diversity

60 Grilling Your Interviewer

51 Compensation & Benefits

61 Getting Grilled

52 Travel

62 Alternatives to the Insurance Industry

52 Career Path 54 The Inside Scoop

nts

65 For Your Reference

66 Industry Jargon 68 Recommended Reading 69 Online Resources 70 Professional Organizations and Communities

At a Glance

1

At A Glance The Role the companies On the job the workplace getting hired

Careers in Insurance & Risk Management

Insurance & Risk Management At a Glance

Jobs are usually stable, the work hours reasonable, and internal promotion for nonspecialized positions is the rule.

•

Contrary to stereotypes, the work is genuinely interesting. Insiders say this again and again, even when frustrated with their employers or stymied by their own progress on actuarial exams.

Opportunity Overview

Disadvantages of Insurance Careers

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The insurance industry believes itself in dire need of future leaders and is aggressively seeking young talent to nurture. Companies are receptive to a variety of undergraduate backgrounds.

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There’s very little glitz in insurance. If you crave glamour on top of interesting work and decent compensation, try investment banking or high tech.

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An increasing number of colleges and universities offer degrees in insurance and risk management, which will give you an advantage when trying to enter the industry.

Many senior managers have worked their way up the ranks and are set in their ways.

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If you go into the actuarial field, you’re expected (and often required) to take exams and pursue certification.

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Insurance is a highly regulated field: Rules are for following, not breaking.

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Undergraduate mathematicians are heavily recruited for actuarial positions, while information systems majors can find work on the IT side of insurance companies.

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MBAs will find opportunities in finance, marketing, and strategic planning, as well as risk management and underwriting.

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Midcareer professionals can find opportunities in midlevel management roles; midcareer salespeople with fat Rolodexes of contacts are particularly sought after.

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Most large insurance firms offer internships, which can lead to full-time opportunities.

Advantages of Insurance Careers FOR YOUR REFERENCE

•

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Great benefits.

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Most jobs expose you to a range of issues and management assignments that lead to in-house promotions or, at the very least, a strong set of professional credentials.



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Recruiting Overview •

Job fairs and campus meet-and-greets allow students face-to-face contact with future employers, but most prospective hires conduct their research online. No surprise, then, that the majority of jobs in insurance and risk management are found electronically. Says one insider, “Although most companies would prefer to have that on-the-ground-interface, it’s very easy for candidates to apply directly online.”

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Actuaries are hired via aggressive campus recruiting campaigns and, for candidates who have even a little experience, through specialized recruiting firms.

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MBAs are often hired into financial, marketing, and strategic-planning jobs.

at a glance

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Midcareer professionals are hired by recruiters, either directly (by applying to human resources) or through introductions made by personal contacts.

the companies

Midcareer salespeople, especially for what are called “personal” insurance lines, are sometimes hired via recruiting seminars that target career changers and people looking for a part-time second job.

the industry

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on the job the workplace getting hired FOR YOUR REFERENCE

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The Industry

2

Overview . ........................................6 The Bottom Line...............................8 Industry Breakdown..........................9 The Opportunity Breakdown..........10 Industry Rankings...........................14 Industry Trends..............................15

At A Glance The Industry industry the companies On the job the workplace getting hired FOR YOUR REFERENCE

Careers in Insurance & Risk Management

Overview Think insurance is dull? How about earthquakes,

floods, terrorism, and critical illnesses? Those raise the heart rate, right? Turns out they’re just a handful of the types of insurance coverage available, indicating the breadth of subjects spanned by the industry. Such range should come as no surprise, given the field’s long history. Perhaps the earliest example of insurance dates back to the second millennium B.C. At the time, Babylonian traders who took out loans to fund overseas shipments could pay extra to guarantee the cancellation of the loan in the event that those shipments were stolen. That’s insurance in a nutshell: Risk transferred evenly from one party to another in exchange for a premium.

π Lloyd’s of London Founded in 1688 to insure merchant ships, Lloyd’s of London remains the world’s largest, most celebrated insurance exchange. Its investors—known as “Names”—agree to pay claims from their personal finances and back Lloyd’s underwriters. Names earn healthy profits from the premiums they charge, but they also run expensive risks because their agreements promise unlimited liability, which means the insured can take every cent (or pence) of a Name’s wealth if the claims are large enough. This is known



as losing down to the last shirt button, as Lloyd’s PR likes to say. Lloyd’s serves two main functions in the industry: It provides reinsurance to help other insurers cover major disasters and, more famously, it offers unusual coverage. They once offered insurance to Bruce Springsteen against losing his voice and, another time, insured against snow in Oklahoma on Christmas—a risk one car dealer ran as part of a promotion. Names who choose their underwriters and deals wisely can make a lot of money; those who don’t can take a bath.

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The modern insurance industry can be traced to the 17th century. Back then commerce was expanding at an exponential rate. Newly established colonies awaited goods sent across the Atlantic by merchants who worried about their delivery. The financial risks intrinsic to shipping naturally increased, with relief arriving in the form of evolved mathematics. Dependable equations meant businesses could determine the probable costs of certain events—a shipwreck, for instance—while developments in the legal field guaranteed the enforcement of insurance contracts. Risks could be insured against more reliably. Today most insurance companies are behemoths. Many boast billions of dollars in assets and tens of thousands of employees. Those numbers allow firms to assume more risk and, more important, to withstand the financial impact of disasters, such as 2005’s Hurricane Katrina, which generated a crippling number of claims. Estimates vary, but some put the loss to the insurance industry at $40 billion to $55 billion. According to the 2008 Statistical Abstract of the United States, the insurance industry counted 2.4 million employees on a collective payroll in excess of $124 billion in 2004, the most recent year for which such data is available. And in 2005—again according to the abstract—insurance carriers and related businesses generated $296 billion in revenue, which accounts for about three percent of the gross domestic product. Consider what that means: Insurance and finance companies produce 3 percent of the total output of the American economy. And since most people and companies have several kinds of insurance apiece, it’s the closest we have to a sure thing besides death and taxes. That’s one of the factors that makes insurance a relatively stable industry to enter: Everybody’s a customer. Policyholders pay what are known as premiums, which form an insurance company’s cash reserves. These reserves offset costs resulting from accidents, losses, or what insurers sometimes call a force majeure, or act of God. We’ll use earthquake insurance as an example. Let’s say you own a house in California where earthquake premiums run $1,000 annually. You decide not to pay the premium, and when a decade passes in relative

at a glance FOR YOUR REFERENCE



getting hired

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the workplace

Avid gamblers beware: You’re better off buying top-drawer insurance than betting half your Christmas bonus at the roulette wheel. As a tiny (but terrifically unfortunate) few of the uninsured learn daily, the smart money is on insurance. That simple economic truth helps explain why, year after year, a nice chunk of attractive jobs are found in the insurance industry. And the jobs aren’t just plentiful—they’re varied, too. Consider the process of purchasing insurance and all the steps involved in making that transaction happen. An actuary, for example, assesses the likelihood of various types of accidents by performing statistical analyses of the factors he or she deems relevant in determining the possibility of such accidents. The actuary uses the results to set policy prices and to decide whether a policy should be sold to a given individual or company. An agent, on the other hand, sells the policies and records all the information in your application, all while trying to assure you, the customer, that you’re buying a policy at a competitive rate. But you’re being assessed, too. Using actuarial data, an underwriter

on the job

“Two of the most important traits and characteristics that are transferable to all jobs are innovation and creativity. That kind of flies in the face of the perception that insurance is dull. We are looking for people who can be innovators and who can be creative and provide creative solutions to get their job done.”

the companies

Insider Scoop

reviews the policy an agent forwards, decides how much overall risk you add to the insurance company, and if that risk is minimal, determines at what premium you should be insured. When you do finally pay the premium, it goes to a money manager who invests the funds for the insurance company until they’re needed to pay claims. When that happens, a claims representative steps in to determine whether the policy did, in fact, cover the accident and, if so, what portion of the resulting expenses are covered by the insurer. The sum of your experiences—whether the accident fell under your policy, what percentage the insurer paid out—becomes further data for actuaries and underwriters to analyze and use later as they tinker with their risk and price assumptions. You see, then, how the industry showcases a variety of jobs—the range of which keeps expanding. As insurance companies increasingly merge with financial services firms, they feature a wider and wider array of financial products, allowing MBAs in particular (but others as well) to discover comfortable positions in business development, marketing, operations, and finance. Could that mean an insurance career isn’t mindnumbingly dull? Its size, conservative demeanor, and predictable bureaucracy have promoted the business as a classic Cold War nine-to-five: a daily grind of number-crunching in a company’s windowless back office for years and years, with the annual cash-bar holiday party providing the only break in the monotony. Or, if you’re one of the anointed few, you can look forward to a suit, a tie, and door-to-door sales ad infinitum. Neither sounds appealing, so it’s good to know insiders feel differently. To hear them tell it, insurance is a compelling field studded with highly varied projects, fantastic training, tons of opportunities for advancement, and awesome benefits. Those who crunch numbers have found that the numbers fluctuate and fascinate. Those in sales have found the customers interesting and the products exciting. Those who enjoy change have found that their companies have branches in multiple locations and constant job openings. To those working in the industry, insurance isn’t boring at all.

the Industry industry

stability, you pat yourself on the back because you’ve saved $10,000. Or maybe there’s a minor quake and all you’ve sustained is $7,000 worth of damages. You’ll still have $1,000 over 10 years to cover the expenses, right? The odds of success are in your favor: You pocket $1,000 every earthquake-free year. But what if an earthquake does strike? What if it measures 8.1 on the Richter scale and it obliterates the $500,000 house you lived in for ten years? Sure, you have $10,000 (plus interest) in savings from the earthquake premiums you sidestepped—but nowhere to rest your head.

At A Glance

Careers in Insurance & Risk Management

“You’ve got to kind of feel other people’s pain, and try to have the technical background and knowledge to kind of solve [their problems]. You’ve got to know the business policy. You’ve got to know general liability overages. You’ve got to know all this stuff because, you know, the competition does.” It accommodates many interests, as well. Engaged by health and wellness issues? Try an HMO or other health insurer. Like to watch the stock market? Consider a life insurance company or insurer with big financialservices operations, with whole departments devoted to investing premiums to cover claims down the road. Or maybe you excel at math. If that’s the case, seek your bread and butter in the actuarial field—though you’d do just as well in finance, investments, or underwriting. If you anticipate problems successfully, your engineering background will secure you a spot in propertycasualty underwriting, risk management, or research. If you love whodunits, try the claims department. There you’ll do lots of investigating: Did that grocery store really catch on fire accidentally, or was it arson so the storeowner could pocket the insurance money? Equally satisfying can be making sure Mrs. Jones has a safety net when Mr. Jones is no longer around. That’s exactly what you’re responsible for in a sales or customer service position, where personal interactions are as frequent as they are in claims, and additional skills, such as diplomacy and persuasiveness, come into play.

FOR YOUR REFERENCE

getting hired

the workplace

On the job

the companies

The Industry industry

Insider Scoop



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The Bottom Line Many personalities can succeed in the

insurance and risk management industries. If you enjoy working with people, there’s room for you in sales; if you enjoy quantitative problem solving, there’s a place for you in the actuarial and underwriting fields. And if you like sleuthing but dislike the danger associated with criminal investigations, check out the claims department. MBAs find an open door in the business, too, as insurance companies continue to consolidate and compete with other financial service agencies.

InsideR Scoop “The thing that hurts is you take it so personal. And I think that’s one of the attributes that makes you a good agent—you take it so personally when you lose an account.” And the insurance industry rewards its people. From top-notch bennies to reasonable hours and job security, the field appeals to those who seek a stable employer that compensates its workers beyond a weekly paycheck. You’ll also expand your skill set through extensive training and opportunities for career advancement. Finally, insurance is a great place for those fulfilled by working within large organizations. Trade-offs include dealing with big bureaucracies, paternalistic management, and an occasionally heavy-handed emphasis on team play. The industry also prizes customer service and analytical skills, so if neither are as valuable to you, you’re better off looking elsewhere.

aT a glaNCE

There are a couple of ways to break down the

“Regulation will always play a role in dictating how business is run, but certainly the ability to interpret that regulation and understand what it means to the business, that really provides for a dynamic environment, because it’s always fluid, always changing.”

insurance industry. Th e fi rst is by product line: health, life, or property-casualty. Th e second is by customer: business (also known as commercial) or personal. Most insurers specialize in one or a couple of these types of insurance. Th e few that off er more are known as “multiline” companies. Insurance companies can also be divided into public and private entities. Th ose that are publicly traded are known as “stock” companies; those that are privately held are known as “mutual” companies.

Property-casualty insurance refers to insurance for things: cars, houses, and businesses. Property insurance is insurance for, duh, property. Casualty insurance mainly protects individuals and businesses from legal liability, such as if somebody slips by the pool and breaks a leg. You’ll fi nd a wide range of propertycasualty insurance products—everything from earthquake, volcano, and fl ood insurance products to automobile, aviation, and boat insurance. Casualty insurance, sometimes referred to as liability insurance, includes both legal defense and settlement costs.

ThE WOrkPlaCE gETTINg hIrED

Despite the fact that nearly 47 million Americans lack health insurance, it’s a necessary part of life. Managed care plans rule the market. Most are local or regional, though acquisition and expansion on the part of a few national companies have created a handful of supersized enterprises. Also, several standalone health insurance outfi ts began as HMOs and now off er a spectrum of health insurance options. Most health insurance is sold to employers, so it’s widely viewed as business-line. It can be a great sector of the industry for people interested in health care. Nurses and pharmacists in particular fi nd good jobs with these companies.

PrOPErTy-CasualTy INsuraNCE

ON ThE JOb

hEalTh INsuraNCE

INSIDER SCOOP

ThE COmPaNIEs

(insuring one fi rm or its shareholders against the untimely death of an indispensable senior employee) are typically sold as business lines.

ThE INDusTry

IndusTry BreakdOWn

lIFE INsuraNCE

FOr yOur rEFErENCE

Life insurance is really about death. It pays burial expenses, covers estate taxes, and off ers the survivors of the deceased fi nancial support. Annuities, on the other hand, pay a regular income until death. Many leading life insurance companies have extensive investment departments. It’s also common for such companies to off er mutual funds and other investments. Most life insurance falls into the category of personal-line products, but group life policies, retirement plans, and “key man” policies WETFEET INSIDER GUIDE

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At A Glance The Industry industry

Careers in Insurance & Risk Management

The Opportunity Breakdown

FOR YOUR REFERENCE

getting hired

the workplace

On the job

the companies

No, you don’t have to sell life insurance—unless you want to, of course. There are enough interesting and challenging jobs in the insurance industry to suit almost every personality. Here are some job descriptions to help you choose the best fit for you.

Actuarial Actuaries are the lifeblood of the insurance business: number crunchers who analyze the statistical probability of particular types of risks. Their findings set prices, maintain statutory reserves, and determine who receives coverage. Insurance companies live or die on the assumptions actuaries make—if they’re wrong, the rest of the company can’t work effectively. Their role in insurance is large indeed. So it’s too bad actuaries have such a bad rap. They’re seen as calculator-wielding, pocket-protector-wearing geeks, nerds who were invented so accountants would have someone to make fun of. But actuaries have the last laugh. Their pay is good, their hours reasonable, their assignments varied, and their stress level low. Oh, and math majors idolize them. That’s because math skills are a crucial component of the job. Actuaries take a rigorous series of ten intensely mathematical exams offered throughout the year. As each test is conquered, actuaries climb the ranks. Those who pass seven such exams become Associates; those who pass all ten are Fellows. The Society of Actuaries issues the exams for life and health actuaries, and the Casualty Actuarial Society runs them for the property-casualty side. The two groups are not quick to intermingle. One actuary who achieved Associate status in the Society of Actuaries shared the downside of the divide: She moved with her husband to a part of the country where life actuarial jobs were scarce, so she decided to restart her career in property-casualty. This meant accepting a 10

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demotion (the company she chose gave her credit for only four exams, despite her seven-exam Associate status) and enrolling in the Casualty Actuarial Society exam program. Lesson to be learned: However marketable and substantial your insurance industry background may be, you can encounter challenges if you relocate. But aspirants, take heart: Because actuaries play such a key role in the operation of insurance companies, they often move into senior management positions.

Sample Projects An actuary helps a company assess its pension liability, measures the expected profitability of a new product line, or may even answer questions for a state insurance commission about a company’s minimum required reserves. The actuary also reviews the previous year’s claims to see if any internal assumptions need to be changed, issues guidelines for the investment department on the basis of the year’s expected payouts, and adjusts policy prices when the state legislature mandates new liability limits or coverage requirements.

Job Tips Don’t even think about becoming an actuary unless you’re a math, statistics, or actuarial science major—this is hardcore, high-level math. Even if you end up in a job where you meet with regulators and never crunch numbers, you’re still expected to take and pass actuarial exams. If you’re interested in becoming an actuary, it’s a good idea to take some of the tests before you start interviewing. “It shows you’re motivated,” one actuarial consultant tells us. “Many college students come out with several exams, so you’re competing against those people.”

Insider Scoop “Many actuaries end up going into management. I’d say a number of our top executives are actuaries, and that’s pretty typical in a lot of insurance companies.”

Claims Claims adjusters investigate incidents, assess damage, and decide whether and how much to pay. They

at a glance

Job Tips

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FOR YOUR REFERENCE

For MBAs in particular, insurance companies offer excellent investment-management positions. Entry-level jobs usually carry the title of associate; they’re generally hired out of college, but sometimes start after business school. Many financial analysts and portfolio managers pursue a Chartered Financial Analyst designation, which requires passing three levels of tests (one

getting hired

And you thought you were defenseless against alien abductions. Wrong—London-based brokerage Goodfellow Rebecca Ingrams Pearson sells insurance that protects policyholders against kidnappings by little green men. The firm has sold more than 20,000 such policies and paid at least one claim worth £1 million.

The investment analyst meets with the executives of a company offering stock to see whether it represents an attractive deal, calculates the expected volatility of several bonds to see which fits best in a portfolio, and works with actuaries to determine asset allocation goals for the coming year. Although this is a key insurance job—and is apt to become even more so as companies expand financial services products—it has more in common with the job of analysts at mutual fund and money management firms than the work of actuaries, underwriters, or claims adjusters.

the workplace

π Insurance X-Files

Sample Projects

on the job

Job Tips You don’t have to be a college graduate to work in claims, although many of the people who work in this arena have a degree. People with special expertise, especially in health care, can find great jobs here, as can lawyers. Many insurance companies hire their claims personnel through direct application rather than campus recruiting. The claims area is also a common point of entry into the insurance business for people who aren’t actuaries. Salaries generally start at $25,000 for new college graduates and increase with skills and negotiating authority. A lawyer who works for an insurance company’s outside law firm handling claims litigation easily makes $100,000 a year or more.

Most insurance companies make money on the “float,” money that sits around during the period after premiums are received and before claims are paid. Since premium revenues can run into the billions of dollars, even low interest rates yield a significant amount of cash that must be managed. Life insurance companies, which often sell investment products like annuities, tend to have large and sophisticated investment departments. Investment managers choose investments that meet performance and liquidity criteria to maximize the return to the company and its clients. Good investment performance can help a company charge more competitive premiums. For an annuity or other investment product, investment performance is one of the main items a company sells to its customers. Because of the importance of money management to the long-term health of the insurance business, many companies have acquired and/or developed brokerage, mutual fund, and other money management firms.

the companies

Sample Projects After a major disaster like a tornado or an earthquake, the claims adjuster may get flown to the scene to write checks for the company’s customers. The adjuster also works with doctors to determine the medical necessity of particular surgical procedures.

Investment Management the Industry industry

provide the services that people want and expect when they buy insurance. Having a major loss is stressful (you’ll deal with people whose houses have burned down, who have had their property vandalized, and so on), so claims representatives need good customer service skills. At the same time, they need to ensure the company’s financial health by identifying and aggressively inquiring into claims they suspect may be fraudulent. They also need to be shrewd negotiators, with a reporter’s nose for detail.

At A Glance The Industry industry the companies On the job the workplace getting hired FOR YOUR REFERENCE

Careers in Insurance & Risk Management level per year for three years), on a variety of money management issues. Entry-level employees can expect to start at $35,000 annual salary, MBAs at $50,000 or more, depending on their experience. Salaries ratchet up quickly for those who are sharp. Top-performing portfolio managers of big mutual funds can earn $1 million or more in annual salary and bonuses.

Risk Management It might sound funny, but risk managers work with customers to make sure they don’t make claims. (Risk management is also known as loss control, technical services, or utilization review.) This works to the benefit of all parties concerned. For example, a manufacturing company that reduces the incidence of workers’ compensation claims will also pay lower premiums, thus allowing for more competitive costs for its products. The insurer wins because it still collects a premium, albeit a smaller one, but uses fewer employees to investigate claims and negotiate settlements—to name just two benefits. At times, risk managers look a lot like consultants to their customers.

Sample Projects The risk manager helps a company with its training programs and safety engineering. He or she also reviews health insurance claims. For instance, it’s possible that certain doctors order tonsillectomies more often than others. Or a risk manager may conduct research into flame-retardant materials for children’s clothing or an earthquake-resistant house design to determine how much risk those items alleviate risk.

Job Tips Risk management is a good field for engineers or people who have some specialized knowledge about medicine, art, the environment, or other areas in which a company offers insurance coverage. Many risk managers eventually move from insurance companies into corporations, where the pay can be excellent (up to $100,000 a year at major manufacturing firms). Within the insurance industry, entry-level annual salaries are closer to $30,000. 12

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Sales Agents sell insurance directly to the customer after carefully considering that customer’s needs. They can be under exclusive contract to one company— what’s known as being a “captive” or “exclusive” agent—or they can work independently, representing multiple insurers. If you’re considering a stint as an independent, it’s helpful to know your state’s licensing requirements. Insurance brokers are similar to agents, except they represent commercial customers instead of insurance companies. Commercial line companies generally have in-house salespeople whose jobs are twofold: selling to major customers and dealing with brokers. These are great jobs for midcareer people who like sales and have a robust network. Many

π Telematics Look to the palm of your hand to find the best taqueria within five blocks, learn when the next bus arrives, or see what the weather looks like for Tuesday. No, we’re not talking about palmistry, but rather the iPhone. Or, more specifically, telematics: the transmission of data via telecommunications devices. Such technology has become omnipresent. Of course not all cars are equipped with a global positioning system (GPS), but with manufacturers touting OnStar and Tele Aid as safety must-haves, telematics seems poised for widespread auto-integration. What does that have to do with insurance? Well, telematics is

good news for carriers and their customers. Telematics can count the miles you drive, analyze the routes you take (some roads are more accident-prone than others), and note the type of car you’re helming, as well as other variables that can help the insurance industry better understand the risks you present as a driver. So, for those drivers who have long argued against one-size-fitsall premium pricing, telematics may soon lead to more equitable insurance rates. Go ahead and piddle along in the slow lane. Pay-as-you-drive pricing policies mean that the speed racer who just blew past you will pay a higher price in more ways than one.

at a glance

Underwriters evaluate applications for insurance coverage and decide whether the likely premium justifies the risk of carrying a particular policy. Underwriters work very closely with the sales force, but theirs is ultimately an analytical job, determining whether a given applicant is a good, fair, or marginal risk; whether the coverage limits are reasonable; and what the applicant’s rate should be, based on actuarial data. In the larger scheme of things, a policy should be priced high enough so that it turns a decent profit for the company, but not so high that a customer looks elsewhere for coverage. As underwriters like to say: There are no bad risks, only bad rates.

“In sales, negotiating skills are really important. Being able to know and understand the organization, the different products, being able to cross-sell, being able to not only deliver one product that you specify but also to know what else is going on in the organization is becoming increasingly more important.”

Sample Projects

Job Tips

The underwriter calculates the costs of full or term life insurance policies; advises a company setting up operations in India as to what their directors’ and officers’ liability is and what their coverage would cost; and examines a doctor’s practice history to see whether he can be offered medical malpractice coverage.

Job Tips

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FOR YOUR REFERENCE

You need a college degree to compete for any underwriting position. Employers train most underwriters, but special expertise can be helpful for particularly unusual or complex risks. Underwriters are not gamblers. They understand the odds and act accordingly. The job’s combination of customer service and hard-nosed calculation is great general training for management positions, both inside and outside the insurance business. Entry-level salaries start at $30,000 per year.

getting hired

Most firms take on agents and brokers only with prior business experience. If you want to break in from scratch, find a company with a strong entry-level development program or start in another customer service position (claims, for instance) to enhance your familiarity with insurance and cultivate vital people skills. Make no mistake: These are sales jobs, so you’re paid strictly on commission or have a low salary with a high bonus potential. You may start out earning $20,000 or so annually, but if you’re a savvy agent, you can pull in $80,000 a year after the first couple of years. “If you like to talk to people, you’ll do well,” says an exclusive agent for a personal-lines company.

Sample Projects the workplace

The agent helps a couple planning their retirement find the best products, a driver find the lowest-cost car insurance given his driving record, or a family whose house was destroyed by a tornado file a claim. A broker may be hired by a small business looking for the appropriate amount of liability coverage or a large company that wants a lower-priced employee health insurance benefit package. The in-house salesperson helps a large corporation select adequate coverage for liabilities that may arise from its products or services.

Underwriting

on the job

Insider Scoop

“High-level, ethical salespeople offer an important service for the customer, and you can take the necessary skills, like thinking outside the box and turning challenges into opportunities, anywhere.”

the companies

Insider Scoop the Industry industry

agents will also pursue underwriting certifications. Those who sell life insurance to individuals often seek out financial-planning credentials, too, as well as Securities and Exchange Commission licensing in order to be able to handle mutual funds, stocks, and bonds.

At A Glance The Industry industry the companies On the job the workplace getting hired FOR YOUR REFERENCE

Careers in Insurance & Risk Management

Industry Rankings This list, while far from exhaustive, features some

of the larger and better-known insurance companies in the United States.

Top U.S. Insurance Companies By Sales Company

Sales ($M)

Employees

Ownership

Specialties

Berkshire Hathaway* (Includes GEICO, General Re, and NICO)

118,245

233,000

stock

property-casualty

American International Group

110,064

116,000

stock

property-casualty

UnitedHealth Group

75,431

67,000

stock

health

WellPoint

61,134

41,700

stock

health

State Farm Mutual Automobile Insurance Company

60,500

68,000

mutual

property-casualty

MetLife

53,007

49,000

stock

health, life

The Allstate Corporation

36,769

38,000

stock

property-casualty

Prudential Financial

34,401

40,703

stock

health, life

Aetna

27,599

35,200

stock

health, life

TIAA-CREF

27,526

35,200

mutual

health, life

The Travelers Companies

26,017

33,300

stock

property-casualty

The Hartford Financial Services Group

25,916

31,000

stock

property-casualty

Humana

25,290

25,000

stock

health

Liberty Mutual Holding Company

23,520

39,000

stock

property-casualty

Nationwide Mutual Insurance Company

22,253

36,000

stock

property-casualty

New York Life Insurance Company

21,123

14,847

mutual

health, life

The Northwestern Mutual Life Insurance Company

19,733

4,800

mutual

health, life

Loews Corporation

19,733

21,700

stock

property-casualty

Massachusetts Mutual Life Insurance Company

18,020

27,009

mutual

health, life

CIGNA Corporation

17,623

26,600

stock

health

Aflac

15,393

8,048

stock

health, life

*Berkshire Hathaway is a conglomerate. While its core holdings are in the insurance industry (including GEICO, General Re, and NICO), it also includes more than two dozen other businesses in diverse industries, from underwear (Fruit of the Loom) to chocolate (See’s Candies) Source: Hoovers, WetFeet analysis..

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at a glance

Retirements Necessitate Changing Product Mix

Emergence of Boutique Products

The biggest insurance market remains the U.S., followed by Japan and the U.K. And aging populations in those nations continue to affect the industry. As sizable slices of their populations age and retire, asset management and retirement products replace salaries as forms of annual income. Annuity and life insurance departments are likely to evolve to serve this demographic, and in the U.S., at least, there will be significant opportunities to sell health insurance policies that enhance Medicare.

Take note of the proliferation of boutique insurance products. As new business types have emerged in the global technology boom, litigation has flourished in their wake, as all involved have struggled to contextualize products and businesses in a shifting commercial landscape. This is not unlike the earliest days of the insurance industry, when merchants grappled with then-new modes of exchange. Today the impact of globalization and radical changes in technology have produced more specialized offerings, such as coverage for e-data loss, environmental risks, golf courses—even cancer. Clearly, insurance and risk management will provide interesting challenges and opportunities in the years ahead, and perhaps even shed their stodgy reputations in the process.

Opportunities for Graduates The demographic shift mentioned above also affects the job market, as insurance companies scramble to strengthen their succession planning. “They have to

WETFEET INSIDER GUIDE

15

FOR YOUR REFERENCE

Homeowners have seen their coverage severely curtailed. This trend began in the 1990s, when natural disasters such as hurricanes Hugo and Andrew wrought billions of dollars worth of damage to coastal homes, and only intensified in 2005, when hurricanes Katrina and Rita brought even greater losses. Numerous homeowner policy claims for mold damage—especially in southern states—further exacerbated the situation. Underwriters of homeowners’ insurance are now much more reluctant to offer coverage, their skittishness influenced by the failure of traditional catastrophe models and the unreliability of formerly dependable actuarial tables. This loss of confidence only deepened when predictions for major hurricanes in 2006 proved baseless. Look for spiking interest in new predictive models as insurers scramble to address rising risks in coastal states.

getting hired

International insurance underwriters have their eyes trained on China, the world’s fastest-growing business market and largest demographic—or, if you’re thinking like an underwriter, the country with the highest number of potential customers. Life insurance firms and underwriters of personal lines certainly see it that way, with American International Group (AIG) leading the charge. The company accrues $1.3 billion each year in insurance premiums from China, which AIG aims to quadruple in 2009. Countries developing at a similarly rapid clip, such as India, Romania, and Nicaragua, find other firms conducting outreach just as aggressively, though the biggest emerging markets are in Southeast Asia. In 2006 alone, total premiums from that part of the world came in at $138 billion, a 20.8 percent jump from 2005.

the workplace

Homeowner Coverage Curtailment

on the job

International Opportunities

exciting changes afoot in the insurance business.

the companies

Despite a conservative reputation, there are

do quite a bit of work to provide enough replacement for employees who will be retirement-eligible over the next ten years,” says one recruiter. “Entry-level and well qualified talent coming off the college campuses is very desirable for an organization hoping to grow future leaders.”

the Industry industry

Industry Trends

The Companies

3

The Big Picture ..............................18 The Firms........................................18

aT a glaNCE ThE INDusTry ThE COmPaNIEs ON ThE JOb ThE WOrkPlaCE gETTINg hIrED FOr yOur rEFErENCE

Careers in Insurance & Risk Management

The BIG pIcTure With information so readily available on the Internet, job seekers can conduct thorough research on future employers—so, as one recruiter told us, applicants who know an insurance carrier and its products, as well as its history and current focus, stand above those who don’t. And companies understand savvy candidates—the candidates they want—are digging around on their websites. “Th at’s challenged companies to be as transparent as possible with their Web off erings and the public information they provide about career growth and development,” says one insider. “Th ey understand that employee retention starts before someone’s even hired. Th e Web has put the onus on companies to step up their brand eff orts.” Th at development generally puts job seekers at an advantage, but bear in mind a company’s ownership structure as you investigate its background. For example, you won’t fi nd annual reports or stock listings for privately held carriers or mutuals, which are owned by their policyholders. And some, such as Blue Cross Blue Shield, are nonprofi ts—regulators determine their charitable intent—while others are subsidiaries of larger international organizations. Th ese frameworks will help guide your research, and they should give you a sense of a company’s constituency and its relationship to regulators. For instance, Blue Cross Blue Shield operations have encountered problems when they were sold at a profi t because customers, regulators, and the public believed they should have received a portion of the proceeds. Knowing a carrier’s ownership structure also will help you during interviews, because some insurers are so large and off er so many products under diff erent divisions that some candidates are not always aware they’re interviewing with an insurance company. Th ey’ve walked in, thinking they were interviewing for a position at an investment management fi rm or a risk 18

W E T F E E T I N SIDER GUIDE

management consultancy, only to learn the job was with an insurance carrier. You might not think that’s a big deal, but parent companies infl uence the benefi ts or culture of their subsidiaries—sometimes profoundly so—meaning it’s good to weigh that information when you start looking at job off ers.

MaJOr players The profiles that follow feature carriers with

the highest revenue earnings; they are by no means the only insurers out there. Instead, consider them representative of the many large carriers that comprise the insurance and risk management industries, and keep in mind that small, independent outfi ts round out the rest of the fi eld. Th e profi les here will give you an idea of the industry’s standard business practices and recruiting policies. Th ey’ll also introduce you to the rivals of the companies wooing you. Finally, because certifi cation is key (especially for actuaries), the industry trade groups listed at the end of this report can give you an idea of the tasks you’ll complete in your new job.

at a glance the industry

Aetna 151 Farmington Avenue Hartford, CT 06156 Phone: 860-273-0123 Website: www.aetna.com Ticker symbol: AET

Background Established in the mid-19th century, Aetna is one of the oldest insurance companies in the business. For years it specialized in employee benefits, but shifted focus when its health care division began accounting for the majority of sales (60 percent in 1995). Today Aetna is one of the largest health insurers in the U.S. and is poised to expand its reach: In 2007, it acquired Goodhealth, an underwriting agent for international private medical insurance, so it could begin offering health care to expats. Aetna also is increasing marketing efforts to individuals and small businesses in an attempt to grow beyond the large, employer-sponsored programs for which it is so well known.

π AT A GLANCE

getting hired

Financial and Personnel Highlights

the workplace

Aetna’s E. E. Cammack Group School for college graduates offers training for professional sales executives, whom Aetna is aggressively recruiting. The company also targets recent graduates through its actuarial training program; trainees work in formal student committees and are paid for their study time. Aetna also reimburses students for exam fees and guarantees pay increases for those who complete the courses. Students still in school can apply for full-time, paid summer internships in actuarial training, auditing, claims/customer service, information technology, sales and marketing, and underwriting. Aetna also offers undergraduates co-op positions in these fields: For at least five months, students must work a minimum of twenty hours per week. All internship and job openings are posted on the company’s website.

on the job

Recruitment and Internships

Health care, retirement savings

the companies

Key Product Lines

2007 sales ($M): $27,599.6 1-year sales growth: 9.8 percent Number of employees, 2007: 35,200 1-year employee growth: 17.3 percent

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At A Glance The industry the companies On the job

Aflac 1932 Wynnton Road Columbus, GA 31999 Phone: 706-323-3431 Website: www.aflac.com Ticker symbol: AFL

Key Product Lines

Recruitment and Internships

Supplemental health and life insurance, especially cancer insurance

Because the company has been voted one of Fortune’s “100 Best Companies to Work For” in America for ten consecutive years, Aflac doesn’t need to recruit as aggressively as other carriers. But it is constantly seeking independent agents and corporate employees, particularly those fluent in Spanish and English. Aflac’s student internship program is linked with the Students in Free Enterprise program, which is an international nonprofit supporting ambitious students who take active roles in corporate social responsibility.

Background With the introduction of the iconic Aflac duck in 2001, the insurance company definitively stamped its identity onto the consciousness of the American public, though the firm does 70 percent of its sales in Japan. In fact, Aflac enjoyed an eight-year monopoly on the cancerinsurance market there during the 1970s, and though it continues to perform well in Japan, Aflac’s dependence on that country means it’s vulnerable to valuation swings between the dollar and the yen. Accident/ disability premiums have gained on the company’s cancer-insurance premiums, surpassing them for the first time in 2000.

FOR YOUR REFERENCE

getting hired

the workplace

Careers in Insurance & Risk Management

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W E T F E E T I N SIDER GUIDE

π AT A GLANCE Financial and Personnel Highlights 2007 sales ($M): $15,393 1-year sales growth: 5.3 percent Number of employees, 2007: 8,048 1-year employee growth: 8.6 percent

at a glance the industry

The Allstate Corporation

Allstate recruits heavily through nationwide seminars and webinars hosted by exclusive agents and personal financial representatives. You also can find them on college campuses in the spring, trawling for summer interns. The internships are full-time and paid, and participants can expect subsidized transportation and housing. Most interns are later offered another internship or full-time employment. The company also works to pull in Allstate exclusive agents and experienced entrepreneurs who manage localized subsidiary sales agencies.

Background Second only to State Farm in personal lines sales, Allstate has historically enjoyed a high profile in the U.S., where for many years it sold car insurance at Sears. When the retail behemoth began suffering steep losses in the 1980s and 1990s, Allstate went public, and Sears sold roughly 20 percent of its stake in the company. Today the firm is one of many insurance companies retooling their property and casualty divisions in the wake of the 2005 hurricane season, when Hurricanes Katrina, Rita, and Wilma combined to hand Allstate $5.67 billion in catastrophe losses.

π AT A GLANCE Financial and Personnel Highlights

getting hired

2007 sales ($M): $36,769.0 1-year sales growth: 2.7 percent Number of employees, 2007: 38,000 1-year employee growth: 0.3 percent

the workplace

Recruitment and Internships

Personal lines, particularly auto and homeowner insurance and some financial services

on the job

Key Product Lines

the companies

2775 Sanders Road Northbrook, IL 60062 Phone: 847-402-5000 Website: www.allstate.com Ticker symbol: ALL

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At A Glance The industry the companies On the job the workplace

American International Group (AIG) 70 Pine Street New York, New York 10270 Phone: 212-770-3000 Website: www.aigag.com Ticker symbol: AIG

Key Product Lines

Recruitment and Internships

Property-casualty insurance, life insurance, financial services

AIG conducts on-campus interviews for undergrads and graduate students across the U.S., and posts job announcements online. AIG additionally features training programs for undergrads and grads, offering courses in underwriting, claims, and many other areas. Most of the firm’s international openings are filled locally, but if you’re good with languages—especially major Asian dialects—you might climb AIG’s corporate ladder more easily.

Background Offering products in more than 130 countries and jurisdictions, AIG is one of the world’s largest insurers. Half of its profits are international, which comes as little surprise because the company has an assertive presence in the global market. For instance, AIG is the only wholly owned foreign life insurance firm in China and it has begun establishing operations in the Middle East, where the company features insurance products designed to conform to Islamic law. AIG hopes its successes overseas will balance its domestic difficulties. Legal troubles and accounting scandals have beset the company since 2004, and in 2008, AIG posted the first back-to-back quarterly losses in its history.

FOR YOUR REFERENCE

getting hired

Careers in Insurance & Risk Management

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W E T F E E T I N SIDER GUIDE

π AT A GLANCE Financial and Personnel Highlights 2007 sales ($M): $100,064 1-year sales growth: –2.8 percent Number of employees, 2007: 116,000 1-year employee growth: 9.4 percent

at a glance the industry

Berkshire Hathaway • GEICO • General Re Corporation • National Indemnity Company

the companies

1440 Kiewit Plaza Omaha, NE 68131 Phone: 402-346-1400 Website: www.berkshirehathaway.com Ticker symbol: BRK.A

Employee outreach programs vary with each subsidiary, but you can expect to see GEICO, the largest of them, recruiting on college campuses for its summer internship program. GEICO also showcases online videos of job descriptions and testimonials from current agents and representatives to provide potential employees and interns with a realistic idea of its corporate culture.

Background

π AT A GLANCE Financial and Personnel Highlights 2007 sales ($M): $118,245 1-year sales growth: 20 percent Number of employees, 2007: 233,000 1-year employee growth: 7.4 percent

getting hired

Berkshire Hathaway is a holding company owning a wide range of subsidiaries, the most important of which include insurance firms National Indemnity and GEICO, as well as reinsurance monster General Re. Thirty percent of the company is held by Warren Buffett, the world’s richest man. He began operating under the Berkshire Hathaway moniker in 1965, when Buffett Partnership bought a textile company by that name. In 2006, under his leadership, the company became the first to breach the $100,000-per-share market price. The septuagenarian Buffet has yet to announce his successor, though he has admitted one has been chosen and that a man will fill the position when he steps down.

the workplace

Recruitment and Internships

Auto insurance, specialized property-casualty insurance, and reinsurance

on the job

Key Product Lines

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At A Glance The industry the companies On the job the workplace

CIGNA Corporation 1 Liberty Place 1650 Chestnut Street Philadelphia, PA 19192-1550 Phone: 215-761-1000 Website: www.cigna.com Ticker symbol: CI

Key Product Lines

Recruitment and Internships

Health care, especially employee-benefit mainstays such as group-term life and long-term disability

CIGNA features several well-compensated career development programs, co-ops, and summer internships for undergraduate and graduate students. Positions in areas such as accounting, underwriting leadership, and information technology are posted on the company’s website as openings come up. In 2006, the firm hired more than 60 interns nationwide.

Background CIGNA is the result of a 1982 merger between the Insurance Company of North America (INA) and Connecticut General Life Insurance Company (CG). It began positioning itself as a leader of managed health care in 1989, when it sold its individual insurance products division and acquired Equicor, an HMO, in 1990. In the mid-1990s, environmental liabilities (asbestos, anyone?) slowed CIGNA’s growth, but it has since recovered to become one of America’s top health insurers. The company also has an international presence, with 60 percent ownership in an Indonesian insurer and 45 percent ownership in Mediplan, a Mexican managed HMO. It is also one of the world’s largest providers of expatriate health insurance, which protects overseas employees of multinational companies.

FOR YOUR REFERENCE

getting hired

Careers in Insurance & Risk Management

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W E T F E E T I N SIDER GUIDE

π AT A GLANCE Financial and Personnel Highlights 2007 sales ($M): $17,623 1-year sales growth: 6.5 percent Number of employees, 2007: 26,600 1-year employee growth: –1.8 percent

at a glance

Key Product Lines

Background

The Hartford offers three “ins” for students or recent graduates who want to work with the company. The first, an undergraduate summer internship program, emphasizes social networking and volunteerism in addition to finance-related tasks. The second, an MBA program, is highly selective and entails multipleround, on-campus interviews prior to entry. The third, a full-time, entry-level program, seeks recruits through employee referrals and an in-depth application process.

the workplace

π AT A GLANCE Financial and Personnel Highlights

getting hired

The insurer of choice for Abraham Lincoln and Robert E. Lee during the Civil War, The Hartford (yes, they like to retain the “The”) can also claim another famous name: Poet Wallace Stevens, widely acknowledged as one of the most important American poets of the 20th century, may be the company’s most famous retiree. Today the firm is focusing on just that demographic: A partnership with the AARP gives The Hartford the exclusive right to provide auto and homeowner policies to the organization’s members, allowing the company enviable access to the aging—and lucrative—Baby Boomer generation.

Recruitment and Internships on the job

Property-casualty insurance, life insurance, and financial services, especially for retirees

the companies

One Hartford Plaza Hartford, CT 06115-1900 Phone: 860-547-5000 Website: www.thehartford.com Ticker symbol: HIG

the industry

The Hartford Financial Services Group

2007 sales ($M): $25,916 1-year sales growth: –2.2 percent Number of employees, 2007: 31,000 1-year employee growth: 3.3 percent

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At A Glance The industry the companies On the job the workplace

Humana 500 West Main Street Louisville, KY 40202 Phone: 502-580-1000 Website: www.humana.com Ticker symbol: HUM

Key Product Lines

Recruitment and Internships

Health care

Humana recruits talented young professionals with a wide range of backgrounds through its Infusion Program. Undergraduate and graduate students who participate in the program are immersed directly into the company’s day-to-day operations. They enjoy one-on-one mentoring, as well as peer mentoring, and are introduced to a number of development and social networking opportunities. Interns are compensated with full salaries and housing in Louisville.

Background No insurer can match Humana’s relationship to Uncle Sam. Government program premiums account for more than two-thirds of the company’s sales; more than half of those stem from Medicarerelated premiums alone. But while Humana reaps considerable profits from such ties, those relationships also leave the company more vulnerable to shifts in public policy. For instance, congressional cuts of reimbursement rates for Medicare Advantage programs, the private fee-for-service plans that Humana markets so successfully but that are more expensive for the government to administer, would greatly affect Humana’s profit margins. Luckily, the company has been expanding its commercial membership. Acquisitions, such as the purchase of CompBenefits and KMG America in 2007, have brought more than 6 million more customers into Humana’s fold.

FOR YOUR REFERENCE

getting hired

Careers in Insurance & Risk Management

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W E T F E E T I N SIDER GUIDE

π AT A GLANCE Financial and Personnel Highlights 2007 sales ($M): $25,290 1-year sales growth: 18.1 percent Number of employees, 2007: 25,000 1-year employee growth: 12.1 percent

at a glance the industry

Liberty Mutual Holding Company

the companies

175 Berkeley Street Boston, MA 02116 Phone: 617-357-9500 Website: www.libertymutual.com Ticker symbol: Mutual company

Liberty Mutual’s comprehensive website provides an updated list of the colleges and universities where the company recruits biannually. The firm offers summer internships to undergraduates, and also targets postMBA students for their highly selective corporate development program, in which participants are placed across all business lines and functions.

Background

π AT A GLANCE Financial and Personnel Highlights 2007 sales ($M): $25,900 1-year sales growth: 10.1 percent Number of employees, 2007: 41,000 1-year employee growth:

getting hired

One of the biggest providers of property-casualty coverage in America, Liberty Mutual ranks among the top ten auto insurers in the country. But its international division might soon match its strong U.S. showing; its overseas branches are selling personal and commercial insurance in more than 20 countries. The company’s distribution strategy includes Brokers, the Internet, direct-response call centers, and independent and exclusive agents operating alongside their direct sales force. Liberty Mutual’s West Coast presence will receive a hefty boost when the company completes its $6.2 billion purchase of Safeco.

the workplace

Recruitment and Internships

Property-casualty insurance, both commercial and personal lines

on the job

Key Product Lines

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At A Glance The industry the companies

Careers in Insurance & Risk Management

Loews Corporation 667 Madison Avenue New York, NY 10065-8087 Phone: 212-521-2000 Website: www.loews.com Ticker symbol: L

Key Product Lines

Recruitment and Internships

Commercial property-casualty insurance, life insurance

Though you might come across CNA at the occasional campus career fair, you’re more likely to find success with the company if you submit a virtual candidate profile through its online recruitment site. Students lucky enough to land an internship at the firm will receive exposure to more facets of the insurance and risk management fields because of the company’s smaller staff size; assignments won’t be as clearly delineated the way they are at larger companies. Interns and employees are encouraged to participate in learning and development courses.

Hotels, offshore oil- and gas-drilling rigs, and cigarettes are just a handful of operations this holding company lists in its ledger. Its real moneymaker, though, is CNA Financial, a commercial propertycasualty carrier that brings in more than half of Loews’ revenues. CNA Financial used to provide life and reinsurance coverage, but Loews put both units up for sale in 2000 when a spate of tobacco lawsuits involving Lorillard, its cigarette-manufacturing subsidiary, tagged the company with severe losses. (One payment cost Loews $325 million.) Affiliates such as The Continental Insurance Company and Continental Assurance still allow CNA Financial to offer life and group insurance.

FOR YOUR REFERENCE

getting hired

the workplace

On the job

Background

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W E T F E E T I N SIDER GUIDE

π AT A GLANCE Financial and Personnel Highlights 2007 sales ($M): $18,380 1-year sales growth: 2.6 percent Number of employees, 2007: 21,700 1-year employee growth: 0.5 percent

at a glance the industry

Massachusetts Mutual Life Insurance Company

the companies

1295 State Street Springfield, MA 01111-0001 Phone: 413-744-1000 Website: www.massmutual.com Ticker symbol: Mutual company

MassMutual recruiters aren’t regulars on the college campus career-fair circuit, so if you’re looking for an internship or position with the company, you’ll have better luck looking on its website, where undergraduates and MBAs are courted for internships and direct-hire opportunities. The company’s in-depth development programs and networking events are potent attractors for future hires.

Background

π AT A GLANCE Financial and Personnel Highlights 2006 sales ($M): $18,020 1-year sales growth: 3.4 percent Number of employees, 2007: 27,000-plus 1-year employee growth: n/a

getting hired

The flagship firm of MassMutual Financial Group (a global outfit of companies offering financial services), the Massachusetts Mutual Life Insurance Group reaffirmed its mutual ownership in 2001, despite some policyholders’ insistence that it begin issuing stock to the public. The company started expanding overseas around the same time, acquiring Hong Kong–based CRC Protective Life Insurance (now MassMutual Asia) in 2000. It also has subsidiaries in Argentina, Bermuda, and Luxembourg, illustrating MassMutual’s commitment to broadened distribution and new-product development; channels and products developed within the past few years constitute the bulk of MassMutual’s sales.

the workplace

Recruitment and Internships

Life and disability income insurance, as well as financial services, including money management and annuities

on the job

Key Product Lines

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At A Glance The industry the companies

Careers in Insurance & Risk Management

MetLife 200 Park Avenue New York, NY 10166 Phone: 212-578-2211 Website: www.metlife.com Ticker symbol: MET

Key Product Lines

Recruitment and Internships

Life insurance, property-casualty insurance, reinsurance, and financial services, including annuities and retirement and savings products

Diversity is one of MetLife’s core values, and the company has allied with Inroads, a program that facilitates workplace success for minority students, to ensure diversity in its internship programs. More than 100 interns are hired annually for MetLife’s sales internship program, which pays on commission, and its legal internship program for first- and second-year law students. The firm also participates in the Financial Fellowship Program at The American College and recruits for its institutional sales “rookie” training program, as well as its investment analyst, actuarial development, and IT programs.

MetLife’s $11.8 billion acquisition of The Travelers Life and Annuity Company, a division of Citigroup, made MetLife the largest provider of individual life insurance in North America in 2005, but its history as a life insurance carrier dates back to the late 19th century. MetLife has bolstered its life insurance coverage since that time, of course—in 2003 it purchased John Hancock’s group life insurance unit— and has diversified to include long-term care insurance while jettisoning its large-market 401(k) division. Emerging markets are the company’s current focus. With its 2002 acquisition of Aseguradora Hidalgo, Mexico’s biggest life insurance carrier, and its takeover of Citigroup’s international insurance operations in 2005, MetLife deepened its hold in Latin America and the Asia-Pacific region.

FOR YOUR REFERENCE

getting hired

the workplace

On the job

Background

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W E T F E E T I N SIDER GUIDE

π AT A GLANCE Financial and Personnel Highlights 2007 sales ($M): $53,007 1-year sales growth: 9.5 percent Number of employees, 2007: 49,000 1-year employee growth: 4.3 percent

at a glance

Key Product Lines

Background

Nationwide generally positions new recruits in its Marketing Leadership Rotation Program or Financial Leadership Program, which lasts two to three years for new hires who have received degrees and 10 to 12 weeks for interns still in school. The company also offers recent graduates a 14-week IT Fast Track program for software development. From day one, all interns and new recruits learn the company’s motto, “On Your Side.”

π AT A GLANCE

the workplace

Financial and Personnel Highlights 2006 sales ($M): $22,253 1-year sales growth: 1.9 percent Number of employees, 2006: 36,000 1-year employee growth: 2.9 percent

getting hired

Nationwide stays true to its roots. Established in 1919 when members of the Ohio Farm Bureau Federation, a farmers consumer group, created their own auto insurance company, Nationwide still includes car insurance in its portfolio of services. While that portfolio is thick with other product lines, such as workers’ comp and life insurance, Nationwide has been expanding its money management division to capture more of the market created by retiring Baby Boomers. It enhanced its financial services abilities in 2006, when it was allowed to offer full-service online and telephone banking.

Recruitment and Internships on the job

Property-casualty insurance, life insurance, financial services, and specialty coverage, such as pet insurance, agricultural insurance and loss-control insurance

the companies

1 Nationwide Plaza Columbus, OH 43215–2220 Phone: 614-249-7111 Website: www.nationwide.com Ticker symbol: Mutual company

the industry

Nationwide Mutual Insurance Company

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At A Glance The industry the companies On the job the workplace

New York Life Insurance Company 51 Madison Avenue New York, NY 10010 Phone: 212-576-7000 Website: www.newyorklife.com Ticker symbol: Mutual company

Key Product Lines

Recruitment and Internships

Life insurance and annuities, long-term care insurance

New York Life recruits for 12-week summer internships, a two-year rotational management program for MBAs, and programs in IT, investment management, accounting, actuarial, or auditing for recent undergraduates. It also offers new grads a twoyear associate program focusing on communications, policy, and marketing. You might not see company reps on campuses, but the company does push online profile recruiting for corporate and independent agent sales careers.

Background Bucking the trend of demutualization, New York Life sets itself apart from rivals, retaining its title as America’s top mutual carrier of life insurance. The firm follows the industry lead in other ways, though, such as its expansion of financial products and services. Individuals may now purchase mutual funds through the company, and institutional investors may take advantage of its investment management department. Like other carriers, New York Life is venturing into less mature markets, such as India and Mexico. Unlike other insurers, it’s targeting not just high net-worth individuals, but also middle-income customers. Younger families are another demographic New York Life hopes to attract.

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π AT A GLANCE Financial and Personnel Highlights 2007 sales ($M): $21,123 1-year sales growth: 0.7 percent Number of employees, 2007: 14,847 1-year employee growth: 9.3 percent

at a glance the industry

The Northwestern Mutual Life Insurance Company

the companies

720 East Wisconsin Avenue Milwaukee, WI 53202-4797 Phone: 414-271-1444 Website: www.nmfn.com Ticker symbol: Mutual company

Known throughout the industry for its internship program, Northwestern asks full-time undergrads selected for internship positions to work 15 to 20 hours per week at its branch offices. Video testimonials on the company’s website attest to the program’s wild success.

Background

π AT A GLANCE Financial and Personnel Highlights 2007 sales ($M): $21,355 1-year sales growth: 8.2 percent Number of employees, 2007: 4,983 1-year employee growth: 3.8 percent

getting hired

Holding more than $1 trillion in individual policies, Northwestern is one of America’s top sales performers in life insurance. The continued consolidation of the financial services industry has nudged it to enter the mutual fund arena, and recent reorganization intentionally aimed to highlight its wealth management lines (the company targets the wealthy 55-and-older crowd). Northwestern remains almost religiously devoted to its original product, though, and is known for carefully recruiting and training its agents.

the workplace

Recruitment and Internships

Life, disability, and long-term care insurance

on the job

Key Product Lines

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At A Glance The industry the companies On the job the workplace

Prudential Financial 751 Broad Street Newark, NJ 07102 Phone: 973-802-6000 Website: www.prudential.com Ticker symbol: PRU

Key Product Lines

Recruitment and Internships

Life and health insurance, as well as financial services, including investment management, pension and retirement-related products, and real estate brokerage and relocation services

Prudential’s goal is corporate diversity, the achievement of which the company believes starts with recruitment, so you’ll find the firm well-represented at career fairs aimed at minorities and the disabled. Such efforts have netted Prudential numerous awards for its corporate diversity. The company also is proud of its Actuarial Leadership Development Program, which involves 12to 18-month rotations across multiple business lines and a professional educational curriculum designed to hone leadership skills—not to mention provide study time for exam sessions.

Background Demutualized in 2001, Prudential Financial underwent a restructuring of its portfolio. It dumped its property-casualty businesses onto Liberty Mutual in 2003, and in the same year sold its brokerage division to banking behemoth Wachovia. Retaining 38 percent ownership in the renamed Wachovia Securities, however, Prudential Financial has a noticeable share in what has become the third-largest brokerage firm in the U.S. But the company is still a major player in the life insurance field, expanding beyond its American market to reach well-to-do and middle-income consumers in Japan and South Korea. They join other counterparts in Europe, Asia, and Latin America, though Prudential Financial closed operations in the Philippines in 2006.

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π AT A GLANCE Financial and Personnel Highlights 2007 sales ($M): $34,401 1-year sales growth: 5.9 percent Number of employees, 2007: 40,703 1-year employee growth: 2.2 percent

at a glance the industry

State Farm Insurance Companies

the companies

1 State Farm Plaza Bloomington, IL 61710 Phone: 309-766-2311 Website: www.statefarm.com Ticker symbol: Mutual company

State Farm has steadily increased its online presence, which features interactive video testimonials. Those efforts mean you’ll find the company at college campuses less and less, though the smart job seeker will work toward securing an internship with State Farm. The internships are paid and represent a spectrum of departments—creative services, audit, marketing, and finance are just a few examples. The company also has been looking to increase the number of local agents for the company, so if you’re interested in sales, State Farm might be the place for you.

Background

π AT A GLANCE Financial and Personnel Highlights

getting hired

State Farm insures 15 percent of the cars on U.S. roads, making it the number one carrier of auto insurance in the country. Through its subsidiaries, it is also the nation’s leading home insurer and one of the many carriers adding financial services and products to its portfolio. Through State Farm Bank, the agency has rolled out a federal savings bank charter that offers consumer and business loans through the phone, mail, Internet, and—via that most old-fashioned of methods—human contact. Agents also are available to process loans. State Farm has been hard-pressed to find replacement talent for its aging workforce, and recruitment efforts, particularly for sales positions, have increased.

the workplace

Recruitment and Internships

Property-casualty insurance, nonmedical health and life insurance, and financial services

on the job

Key Product Lines

2007 sales ($M): $60,500.0 1-year sales growth: 0.8 percent Number of employees, 2007: 68,000 1-year employee growth: –14.1 percent

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At A Glance The industry the companies On the job

TIAA-CREF 730 Third Avenue New York, NY 10017 Website: www.tiaa-cref.org Ticker symbol: Private nonprofit

Key Product Lines

Recruitment and Internships

Investment management, retirement plans, annuities, individual life and disability insurance

TIAA-CREF recruiters are scarce on college campuses. The organizations’ recruiting efforts are aimed toward experienced professionals who can manage the accounts of TIAA-CREF’s most affluent customers, so if you’re midcareer or interested in finance, take note: TIAA-CREF’s online recruiting campaign spotlights wealth management advisers.

Background Legally two separate entities—one is the Teachers Insurance and Annuity Association; the other the College Retirement Equities Fund—together TIAACREF is one of America’s largest private retirement systems. The entities exist because schools are nonprofits, thus making profit-sharing retirement plans, such as the 401(k), unavailable to teachers and academics—hence the value of TIAA-CREF’s annuities. The organizations sell jointly to instructors at all levels, from preschool to college, and own one of the fattest slices of real estate investments in the country. Federal tax legislation in 1998 repealed TIAACREF’s tax-exempt status, but the change has meant both can sell no-load mutual funds to the public.

FOR YOUR REFERENCE

getting hired

the workplace

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π AT A GLANCE Financial and Personnel Highlights 2006 sales ($M): $12,378 1-year sales growth: 5.8 percent Number of employees, 2006: 5,500 1-year employee growth: n/a

at a glance

the industry

the companies

on the job

the workplace

getting hired

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On The Job

4

The Work....................................... 40 Real People Profiles........................ 40

aT a glaNCE ThE INDusTry ThE COmPaNIEs

The WOrk Your daily tasks in the insurance and risk

management fi eld will depend on your area of expertise. If you’re in the actuarial department, you’ll spend time programming and studying the numbers. Certifi cation exams are a staple of the job and passing the tests is the only way to get ahead as an actuary. Sales agents and fi nancial advisers are often found on the phone or in meetings, persuading clients to renew policies or invest in this or that fund. Risk managers also do quite a bit of persuading. Th ey vet methodologies and numbers with actuaries and engineers, trying to push the numbers folks toward decisions, not more digits and equations. Assignments really do vary—insurance just isn’t the ho-hum work it’s painted to be. Th e profi les that follow illustrate that point, and while they’re by no means defi nitive representations of the fi eld, they off er knowing glimpses into a range of interesting and fulfi lling insurance careers.

real peOple prOFIles *

FINaNCIal aDvIsEr

age: 30 years in the business: Three Education: B.S. in business administration Type of company: Large carrier Certification: CLTC (Certified in Long-Term Care) annual salary: $60,000

How did you get your job? I interviewed with a bunch of diff erent companies, decided I wanted to be in the fi eld, and got licensed. We do have continuing-education credits that we have to acquire to keep our licenses.

What kinds of people do well at this business? Th ose who survive are “people persons.” If you’re a jerk, you probably won’t do well.

ThE WOrkPlaCE

ON ThE JOb

Careers in Insurance & Risk Management

gETTINg hIrED

What do you like about your job? Th e fl exible schedule and the potential for unlimited income. It’s 100 percent commission, so you’re compensated for your performance. If you don’t work at a certain level, you won’t receive adequate compensation. What do you dislike? Th e double-edged sword of the income structure. It’s not a nine-to-fi ve where you show up and make a salary no matter how you perform. Other than that, the long hours.

FOr yOur rEFErENCE

What is the biggest misconception about this job? Th at people like myself are out to pull the wool over people’s eyes, when 99.9 percent of the time, that’s not the case.

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at a glance

8:00 a.m.

Meet with a client for a cup of coffee.

9:00 a.m.

Arrive at the office and review voicemail and emails.

10:00 a.m. Prep for my afternoon appointment with another client.

Time for that afternoon meeting with the client. I’ll propose my idea for a life insurance solution and hope it takes.

2:30 p.m.

Jump in on a conference call with a mutual fund company. They want us to use their funds for our clients, but I’m not sure they’re a good fit. Have the weekly meeting with my sales manager to talk about how things are going and how I’m doing against my quarterly targets. Yet another meeting with a client. When’s dinner, anyway?

7:30 p.m.

Last client meeting and then dinner! I’m starving.

Annual salary: $101,000

How did you get your job? I had two uncles: one who finished the tests and became an actuary, and another who started taking the exams and ended up changing careers. So I’d always known about actuaries, and having been a math major, actuary gets thrown around a lot as a possible career. But it wasn’t until I switched my focus in school from theoretical math to applied math that the idea started to appeal to me. What are your career aspirations? I want another three to five years to develop my skills and see more parts of our company. I’ll think about getting on a management track after that. What kinds of people do well at this business? Attention to detail seems to be a trait every actuary I know has. They’re very careful with how they do a project, very thorough. And with the emphasis on taking tests, you have to be a good exam-taker and fairly driven to get through the exams. What do you like about your job? My job is challenging and fascinating, in that I get to solve a lot of problems. There are different analyses you have to look at and summarize, so for me, there’s not really a typical day because the job continually changes, and I like that. What do you dislike? This isn’t a disadvantage to me, but you have to be in an urban setting. Most actuaries are employed in larger cities. WETFEET INSIDER GUIDE

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FOR YOUR REFERENCE

6:00 p.m.

Certification: FSA (Fellow of the Society of Actuaries)

getting hired

4:00 p.m.

Type of company: Midsize carrier

the workplace

1:00 p.m.

Years in the business: Five Education: B.A. in math, B.A. in English, M.S. in statistics

on the job

12:00 p.m. Grab lunch with some friends from the office. Hope we don’t go to the same old, same old—I’m sick of the club sandwich.

Age: 30

the companies

A Day in the Life

Senior Actuarial Associate the industry

How can someone get a job like yours? Even before you interview, request to talk to someone who’s been doing the job you’re interested in. Try and find someone you know or someone who is a friend of a friend in the industry. It’ll give you better insight.

*

At A Glance The industry the companies

What is the biggest misconception about this job? Not a lot of people know what an actuary is, so you first have to explain that part. And even if someone does know, actuaries have this reputation as somebody who sits in the corner working on numbers all day long, and that’s the biggest misconception, because communication skills are necessary. Just about every actuary I’ve ever met is pretty savvy socially and knows that they need those skills to communicate to others. Otherwise, if you can’t explain all the hard work that you’ve done, it’s not going to go anywhere. How can someone get a job like yours? If you’re in college still, take math courses. Economics classes will be helpful, as well as computer science. You have to be able to program.

10:15 a.m. More coffee with a coworker. 10:30 a.m. Talk to another actuary in my department who has experience with this topic. I’ll have to hunt down colleagues in our corporate accounting department, too. Have to figure out the financial impact of the reinsurance agreement; they have the numbers I need. 11:30 a.m. More data collection and analysis. Start building a spreadsheet to summarize my findings. 12:30 p.m. Lunch at the nearby deli. 1:30 p.m.

Train one of the new actuarial students on the company policy information system.

2:00 p.m.

Meet with the product-development team to discuss rolling out a variation of one of our products.

3:00 p.m.

Check emails and respond to a request from sales, asking us to get demographic information of current customers. That means more programming and generating a quick report in Excel to summarize the information.

4:00 p.m.

Study for the next actuarial exam. Back to the practice problems from yesterday.

5:00 p.m.

Board the bus home. If I’m lucky enough to get a seat, I’ll bust out my flash cards and study some more.

A Day in the Life 7:00 a.m.

Rise and shine. So groggy…

8:00 a.m.

That coffee helped. At least I can track what I’m reading and hearing on these emails and voicemails. And I should peruse the Internet to see how the market’s performing and what other economic developments might be affecting it.

the workplace

On the job

Careers in Insurance & Risk Management

getting hired

8:30 a.m.

FOR YOUR REFERENCE

9:15 a.m.

42

Meet with my supervisor about the project I’ve been assigned: to determine whether the reinsurance relationship we have now should be maintained. We define the problem and talk about why it’s in front of us, what we’ll get out of the study, and how we should approach it. Collect data for the assignment by researching the reinsurance contract as it stands today and reviewing industry standards for these kinds of arrangements. I’ll look at our data files afterwards and do some programming to get at the information I need.

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at a glance

Age: 49 Years in the business: 30

Education: High school Certification: Certificate in General Insurance Annual salary: $75,000

A Day in the Life 6:30 a.m.

Walk through the office door, pour myself some coffee, and begin answering emails. I should also input applications for a new piece of business and prepare agendas for

WETFEET INSIDER GUIDE 43

FOR YOUR REFERENCE

What do you like about your job? I love working with customers and helping them; I like the negotiation piece entailed in the marketing and finding coverage; and I love to win! If I wanted to be

How can someone get a job like yours? A job like mine requires working your way through the ranks of customer sales reps (CSRs) and then finding a producer you respect and can work with. It’s important to be much on the same page, as far as how you work and your philosophies on working with customers. Sales positions are probably most easily found through networking, and CSRs probably have to start at the bottom, unless you’ve gone through some insurance training or schooling.

getting hired

What kinds of people do well at this business? Those who are highly motivated and are self-starters. For the most part, I haven’t witnessed a lot of handholding, particularly at the sales level. It’s generally believed that a good salesperson can sell anything, but I think you have to know what you’re selling, and our “product” is knowledge and expertise. Anyone can sell an insurance policy, but that’s just paper. What we sell is a relationship and confidence in our ability to truly serve our customers’ insurance needs.

the workplace

What are your career aspirations? I’m doing what I like best now, as an account manager.

What is the biggest misconception about this job? Probably that it’s quick and easy money. It can take years of hard work—pounding the pavement to build a book of business and a network of referrals. The old “dialing for dollars” is still true for people starting out in sales.

on the job

How did you get your job? There was an ad in the paper for a typist, which was a little bit funny, since I didn’t type all that well. Thankfully, the fellow who interviewed and tested me had other things on his mind and didn’t tell me I couldn’t use Wite-Out! He was in a hurry to get lunch and I landed the job. I learned the business, working my way up from a policy typist and on through the ranks, but I think the right person with the right connections could probably land a job in sales almost anywhere.

What do you dislike? Agency politics. I worked briefly for a large corporation on the carrier side; a large, employee-owned independent agency for many years; and now with a family-owned, independent agency. I found that they all have this issue. I’m also a little saddened by what technology has brought us. It’s brought us efficiencies, but it’s taken away from the personal touch we used to enjoy with the customer. Everything is email, and people are more reluctant to pick up the phone. I admit I’m a dinosaur when it comes to this.

the companies

Type of company: Independent agency

on the front line, I think I could be successful there, but I like taking a bit of a backseat and being part of a team, not necessarily the top dog.

the industry

*

Account Manager

At A Glance The industry the companies

Careers in Insurance & Risk Management

the team and department meetings later in the week. 8:00 a.m.

11:00 a.m. That training lasted a while, and I’m going to have to scoot to make that lunch appointment with a customer. Does she have to be an hour’s drive away? 12:00 p.m. No traffic—just in time to meet and talk about the proposal for renewal.

the workplace

On the job

1:00 p.m.

I’m this far. I might as well tour some of the new sites and businesses we’re considering insuring.

2:30 p.m.

I should hit the road if I’m going to beat the rush back to the home office.

3:30 p.m.

I’m still buzzing from the coffee I slurped during the drive. I should use this energy to dissect loss ratios and determine the adequacy of replacement costs. Oh, and I should update my backlog report while I’m at it.

4:45 p.m.

Right: a lunch meeting with the customer down south tomorrow. Almost 500 miles of driving for that—I’ll leave now and hit the sack early.

Age: 63

Years in the business: 34 Education: A.B. in psychology, MBA and PhD in urban and regional planning Type of company: Independent consultant Annual salary: $200,000

How did you get your job? I was at a large insurer for 22 years before I spun out on my own. What are your career aspirations? I’d just like to keep at what I’m doing now. Given my age, if I work another five or eight years, I’ll probably be at a point where I want to retire. My horizons are limited simply by my age. What kinds of people do well at this business? You have to be a person who cares about service to people because that’s ultimately what we do: We provide service to someone whose cause or issues we believe in. If you have a client who you don’t think is worthy, it’s very hard to put in the time or energy to make a good product. Few people can succeed in this business who are just doing it for the money. You end up caring about your clients, or you end up not being a very good consultant. What do you like about your job? It’s intellectually challenging. We’re inventing methodologies to deal with things that a lot of people haven’t even begun to think about, and when they have thought about them, they haven’t thought about them in terms that lead to decisions. What do you dislike? There can be some very, very long days. There can be some 80-hour workweeks. Put too many of those back-to-back and it can become a burden. That, and the feast-or-famine of the marketplace are two big disadvantages. You have to have a lot of energy, because if you have an out-of-town client and you travel week after week,

FOR YOUR REFERENCE

getting hired

Training for a new agency management system.

* Risk Management Consultant

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at a glance

2:00 p.m.

Since we work at home, my wife and I can have lunch together.

2:30 p.m.

Sip some more coffee and return to my desk for more online research. There’s at least a portion of this work that needs to be done at a library. I’ll farm it out because I just don’t have time to do it myself.

4:00 p.m.

Hop on a conference call with a client out West. The time difference means she’s just back from lunch and revved up for a long talk.

on the job

5:00 p.m.

Now I’ve really got to concentrate on that report. They asked me to fly out for a conference during that call, and I won’t have much time between now and then to spend drafting it.

the workplace

How can someone get a job like yours? I’d say start out at a midsize company, get experience there, and work your way up. A master’s degree in actuarial science or a master’s in financial economics would also be invaluable. If you want to be a technical person, those are the places to go. If you want to be a practitioner dealing with clients, probably an MBA is the best background to have.

12:15 p.m. Maybe now I can finally spend time writing that report due next week.

7:30 p.m.

The draft’s coming along nicely. I’ll hit it first thing tomorrow. Dinner smells too good to keep at it now.

A Day in the Life Drink coffee and read the paper. Exercise for a bit and then have a big breakfast.

9:00 a.m.

Settle into the home office I share with my wife. Thankfully, a lot of the research I conduct has moved online, so I can read and print articles from periodicals I’d otherwise have to find at research libraries.

FOR YOUR REFERENCE

10:30 a.m. Draft another long email to the actuary I’ve been wrangling with. You have to keep reminding these people that the purpose of our work is to advise the decision maker, not to put more decimal points behind the answer.

getting hired

7:00 a.m.

the companies

What is the biggest misconception about this job? That everyone gets to senior officer level. Lots don’t make it and more get tired of the organizational rat race. The next biggest misconception is that there are always answers to risk questions. There aren’t. The best we can hope to do in many cases is to minimize the fatalities and disruption after the fact by getting everything back to work quickly and avoiding what we call “cascades of failures.”

the industry

to convince him that we’re not trying to refine the science, but to draw a conclusion from the data.

putting in 70 or 80 hours, you have to have stamina. You have to be able to go on little sleep and catch up on rest during the weekends.

11:00 a.m. Get on the phone with another actuary. Another exercise in persuasion. I have WETFEET INSIDER GUIDE

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At A Glance The industry

Careers in Insurance & Risk Management

* President Age: 52

Years in the business: 30 Education: B.A. in managerial studies Type of company: Small to midsize agency

FOR YOUR REFERENCE

getting hired

the workplace

On the job

the companies

Certification: CIC (Certified Insurance Counselor) Annual salary: $225,000

How did you get your job? I was a bond underwriter and then a surety underwriter for seven years at a midsize carrier before switching over to sales at an agency. What are your career aspirations? For the last couple of months I’ve been negotiating the purchase of the company I preside over. When the deal goes through, I’ll be its owner. What kinds of people do well at this business? Good negotiators. You have to be able to sit on both sides of the table and understand where the insurance companies are coming from and make your customers reach the same understanding. You also have to be able to go to bat for your customer against what they perceive as the big, bad, bureaucratic insurance companies—remember, we’re a smaller firm. It comes down to customer service, which is something I enjoy. What do you like about your job? I have a lot of freedom. I’m not tied to my desk, though there are probably some coworkers who wish I was! What do you dislike? Greed is the biggest problem. The big insurance companies squeeze the little guy so that they can make more money. That’s frustrating. What is the biggest misconception about this job? That all insurers are alike. When those scandals

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happened a few years ago with Marsh & McLennan— well, we’re not like those big companies that cheated their customers, but people lump us together. How can someone get a job like yours? A young person has to pay dues. Go work at a midsize carrier for a few years before coming to us. We’re on a small profit margin, and we don’t have the luxury of spending two to three years training you to see if you’re going to work out.

A Day in the Life 8:00 a.m.

A cup of hot tea at the office and The Wall Street Journal—what a great way to start the morning.

8:30 a.m.

Check my personal and business emails.

9:00 a.m.

Are there any office fires? I’ll talk to my customers and see.

9:15 a.m.

One of them has a bid that’s got to be submitted in the early afternoon. I’ll work on the bond for that since the deadline is so tight.

11:00 a.m. Yes! Finished the bond early. Now I can make the daily sales call. When I was younger, it was my goal to make one every day. I’ve slipped over the years, but now I’ve recommitted myself. 11:45 a.m. Boy, am I jazzed. Just got off the horn with an account I lost years ago. Seems like he’s interested in signing up again. I’ll talk to one of my staff to see what kind of offer we can make to seal the deal. 12:15 p.m. Lunch with one of our bread-and-butter

at a glance

Take a call from the parent of one my son’s classmates. He says he saw me at practice and has a question about his car insurance. It pays to be out and about.

4:45 p.m.

Call the office and tell them to be ready to roll out the red carpet for a new client tomorrow. Turns out there was more to his insurance question than cars.

5:00 p.m.

Watch TV. My cell phone is always on, so customers can reach me at any time.

7:00 p.m.

One just did. She’s out of town and worried that her roof is leaking. I offered to check on it and to verify the leak if she has to make a claim on it.

7:30 p.m.

It’s leaking, all right. Nothing to do but put a bucket beneath the drip. She gets back early tomorrow, and we can talk then about the pictures I took and the statement I’ll make to the claims

FOR YOUR REFERENCE

4:30 p.m.

getting hired

Coach my son’s football team. One of the best perks of my job: I can be part of the community, get out and see people. If I was with a larger company, I’d have to be there, eight-to-five, by the phone.

the workplace

3:00 p.m.

Back on the couch with the missus. Hopefully, I won’t get anymore calls, and we can finish the movie from Netflix.

on the job

Head back to the farm. What with the beauty of technology, I can ride my mule and look at my cows—all while working out a bond deal over the cell phone.

8:15 p.m.

the companies

1:30 p.m.

department. Her family has insured with us for years, and I’d do anything for them.

the industry

accounts. They call us two or three times a day, but we don’t mind. They bring us a lot of business. We’ll take any call of theirs, anytime.

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The Workplace

5

Lifestyle......................................... 50 Hours............................................. 50 Workplace Diversity....................... 50 Compensation & Benefits...............51 Travel............................................. 52 Career Path.................................... 52 The Inside Scoop............................ 54

At A Glance The industry the companies On the job the workplace

Lifestyle

Hours

Team players will enjoy the insurance and risk

Generally speaking, insurance is one of the few fields in which people can put in eight-hour days and still enjoy great benefits packages and salaries. Some sales and account management roles require a bigger commitment, with reports of ten-hour days and evening and weekend functions. And actuaries typically have to study for exams on their own time. Actuaries might be allotted some time at work, especially early in a career, but it very likely won’t be enough. As the exams draw near, you will need to put in evening and weekend study time. And as your time at a company adds up and your seniority grows, you might find you have way too much on your plate to allow any study time at work, even if you are technically supposed to get it. Personal-lines salespeople often work eight-hour days but they are likely to stay late and work weekends. They compensate by taking time off in the middle of the week, so while you might see agents on the golf course Tuesday afternoons, they’re in their offices on Saturday morning for their clients.

management fields. Even entrepreneurial consultants and independent agents have to work in a collaborative environment because they’re under contract and must uphold the standards and practices of the companies with which they signed. Most companies also are known for supporting internal promotion policies (watch out for paternalism, though) and flexible hours, especially if you go into sales. Their benefits packages tend to be generous and are particularly attractive to employees with families. But though they’re slanted toward workers with little ones, the benefits shouldn’t scare off the hardcharging singleton looking for fun in the workplace. Time and time again, insiders stress the variety their work offers. Assignments change often, coworkers and clients are interesting, and opportunities abound with one’s current employer or elsewhere in the industry. There are always new products, changing regulations, and natural disasters cropping up. If you aren’t learning enough at the job, you can pursue still more licenses and certifications. And if insurance or risk management ends up failing to agree with you, many of the analytical and sales skills you’ll pick up transfer to other lines of work. Even actuaries can land jobs in other fields: Some find work at securities or management consulting firms; others, in academia.

Insider Scoop “The market is always changing, as far as rates, carriers, and products offered. Frankly, it’s a lot to keep up with, and you have to keep your finger on the pulse to be most effective for the customers.”

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Workplace Diversity Most major insurance companies have outreach programs that target minority students for spots in all their departments, and in the U.S. at least, demographic shifts are opening the door for workers who mirror the changing face of America. For instance, more minorities and women are becoming entrepreneurs than ever before and, as most companies realized long ago, salespeople who resemble their customers are more effective than salespeople who don’t, especially in personal-lines sales. There also are a handful of minorityrun insurance companies to approach; they generally sell life and/or annuity policies.

at a glance

Special Information for MBAs MBAs come in at salaries ranging from $65,000 to $80,000 annually, not including year-end bonuses and options packages. After four or five years, those with high potential can easily expect to be in six figures.

Benefits & Other Perks

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the workplace

Insurance is the place to work if you want excellent benefits. Most insurers are large, which means they often offer great and very flexible benefits options. And perhaps more to the point, they are in the business of benefits. Expect access to top-notch life and disability policies to accompany a selection of very good health insurance plans. Moreover, because so many of these companies sell annuity products and might operate investment management divisions, retirement and savings plan options are frequently generous. Some companies offer such plums as a long-term care policy for employees and/or their parents. You might even manage to get an extra discount on auto or homeowner insurance. Home-office employees tend to see the richest array of benefits: subsidized cafeterias, onsite child care, and company health clubs are standard, as are flexible and part-time work arrangements and good maternity benefits. Most insurance companies are committed to wellness programs, particularly if life and health coverage are among their offerings. Especially at the home office and at larger branches, you might have your pick of Alcoholics Anonymous, weight loss, smoking cessation, and exercise programs. One former insurance employee we spoke to even received a nonalcoholic beverage cookbook distributed by her

on the job

Compensation within the insurance industry varies dramatically across job functions, and areas of the country. Somebody living in a coastal city such as Boston or San Francisco will make more than somebody in the same role working in a small town such as Grove, Oklahoma. In addition, compensation varies on the basis of the type of job you do. For instance, actuaries start at a higher salary than claims representatives and agents—but keep in mind that agents are typically paid on commission. Their annual salaries will fluctuate depending on performance. In addition to base salaries, many firms offer bonuses or salary increases on the basis of exams passed and certifications received. Bonuses tend to be small (less than 10 percent of total salary), but many insurance companies are expanding their incentive plans.

Entry-level salaries for undergraduates vary on the basis of one’s role. Actuaries start between $40,000 and $60,000 a year, and financial analysts can expect starting salaries between $35,000 and $55,000. Claims representatives will come in between $30,000 and $45,000, and risk managers will begin between $35,000 and $55,000.

the companies

Compensation & Benefits

Special Information for Undergrads

the industry

The field also is receptive to women, who, according to the U.S. Bureau of Labor Statistics, made up 34.4 percent of personal financial advisers in 2006. Women’s opportunities are greater here too: The employment forecast predicts faster-than-average growth in the field—up to 26 percent (for women and men) while the average employment growth rate is an anemic 1.8 percent. Job applicants of all stripes also can take comfort in the industry’s built-in meritocracies. Promotions in the two key employee groups—actuaries and agents—are performance-based. Actuaries must pass their exams to advance, and agents and brokers must meet or exceed sales goals to increase commissions. Even internal salespeople for commercial lines are paid on a commission or salary-plus-bonus system. There’s no way around it: Achieving performance goals is an ingrained aspect of the industry, though you won’t get anywhere by ignoring office politics or flouting corporate norms, either.

At A Glance The industry the companies On the job

Careers in Insurance & Risk Management employer one December in the hope of promoting a safer holiday for its employees. In general, insurance companies boast great educational reimbursement and continuing education programs. Benefits in this area might be limited to exam and certification prep, but the larger companies usually pay for at least part of any program that interests you. (This might be a way to get your MBA without further ballooning your student loan burden. It’s also a way to show that you’re serious about promotion.)

Vacation Most employees start with two weeks of vacation the first year, gradually building up to three or four weeks as seniority progresses. Except for agents, who can be reluctant to leave their businesses, most people take their full vacation allotment. For actuaries still in the process of completing their exams, vacation can mean study hall instead.

the workplace

How much travel you do will depend on your

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“We want to provide security to our customers, and we want to provide it to our employees as well.”

getting hired

Insider Scoop

Travel job, client base, and company location. There are people in the insurance business who practically live in cars or planes, while others log miles only on their daily commute. A senior executive might sit down to a breakfast meeting with Lloyd’s underwriters in London while an actuarial consultant might attend a monthly luncheon with a Toronto-based client. One person we spoke to paid regular sales visits to WalMart headquarters in Bentonville, Arkansas. “Applebee’s is the best restaurant there, and you have to join their private club just in order to get a beer with dinner. And you need a beer after taking that little commuter 52

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plane.” Jobs that involve commercial clients or that are based out of the home office are more likely to involve travel than those in personal lines or in field offices.

Career Path Insurance has a reputation for being sleepy and bor-

ing. People often go to work for one company and never leave. If you talk to people who have those jobs, though, you get a different impression: They stay because their work interests them and the benefits are first-class. Ample internal promotion and continuing education programs mean employees can advance through the ranks of their company if they choose, although enough people change jobs that networking is very helpful. Some insurance companies are too small to run actuarial training programs, so they hire people from competitors who have already made progress on their exams. With so many insurers selling divisions and/or buying or starting new ones, a sizable group of people find themselves in a state of flux at any given time. And finally, there are consulting, corporate, and government jobs for people who like the work but not the big insurance company culture. If you want to get into management, ask about a company’s rate of internal promotion. Some insurers favor actuaries for such roles, but not all do. Many firms give you exposure to a variety of aspects of the business to help you move up the corporate ladder. And even though most companies prefer to hire and promote existing staff, rapid changes in the industry often make it easier for outsiders to move into senior positions and contribute a different point of view. Many larger companies have special management-development programs for undergrads, too. If you’re more entrepreneurial, you might consider eventually operating an independent insurance agency to advance your career.

INSIDER SCOOP “Companies are waking up and realizing they don’t see where the next generation f management is coming through.”

at a glance

Insider Scoop “As an industry, insurance does a lot of seniorlevel talent acquisition.”

Insider Scoop “You’re continually learning new things on the job, but it’s more like an apprenticeship. You’re getting paid as you go along, and you’re rewarded for studying.”

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FOR YOUR REFERENCE

Experienced salespeople remain appealing prospects to recruiters for insurance and risk management firms, however. A bulky book of contacts will attract any company, and because aggressive individuals usually make good salespeople don’t be shy about contacting an agent or a company directly and asking about a job. It’s a smart move, for sure.

getting hired

Insurance companies want MBAs for their investment management, marketing, and strategic planning divisions. “With a MBA, you end up with a broad analytical background and an orientation towards decision-making,” one consultant tells us. That range is highly attractive to insurers, and the skill set MBAs offer is no small asset. Most insurance companies have large legal departments to handle claims issues, draft policies, supervise regulatory filings, and perform general corporate work. These lawyers are often hired directly from law firms, but some insurers consider recent law school graduates as well. Grad students in health care fields such as pharmacy, nursing, or public health are in demand at

the workplace

Opportunities for MBAs and Advanced-Degree Candidates

Midcareer professionals interested in switching fields will find welcoming arms in insurance and risk management. Both industries are seeing their management pool shrink as aging senior and highlevel executives move into retirement at a faster rate than junior staff can fill their positions. This has pushed recruiters to seek managerial candidates with experience in neither insurance nor risk management—and lack of certification won’t knock a candidate out of the running, either. “Insurance, as a whole, has seen a decline in the specialist,” says one recruiter. “The industry has been forced to look at more general talent, for someone with skills transferable not just from financial services, but other industries as well.”

on the job

And while more universities are introducing insurance and risk management degrees in their offerings, neither are the norm; students who graduate from these programs can enjoy a competitive advantage over others with non-insurance degrees. “If I have to choose between a risk management major and an art history major,” says one professor, “I’m going to be happier with a risk management major, because they can hit the ground running, and they have an interest in the field. That’s very important.”

Opportunities for Midcareer Professionals

the companies

It’s a great time for undergraduates interested in insurance and risk management. Both industries perceive a shortage of incoming talent, and the barriers to entry have been lowered to allow for more and greener applicants. “A lot of very large companies have opened up the scope of jobs they’re filling with college hires,” says one recruiter. “Opportunities have opened up.”

many HMOs and health insurance companies. They understand health care issues and know how to read claims and medical records, and typically are qualified to set norms of care. Most actuaries are hired from undergraduate programs, but any graduate work in math or statistics won’t be counted against you. Just keep in mind your starting salary will depend more on the number of actuarial exams you pass than any work you’ve done toward your degree.

the industry

Opportunities for Undergraduates

At A Glance The industry the companies On the job the workplace getting hired FOR YOUR REFERENCE

Careers in Insurance & Risk Management

The Inside Scoop What Employees Really Like Variety You might think assessing risks, underwriting policies, or calling on a never-ending roster of new clients would be the same every day, but you would be wrong. “You see new things every day, and the exams are always a challenge,” says one actuary. “People think insurance is boring, but it’s really not.” A commercial lines salesperson echoes this idea: “It’s never boring. There are always new challenges, and I’m constantly improving my professional skills.” An evolving market, changes in regulations, and the occasional natural disaster manage to keep everyone on their toes.

External Contact Actuaries don’t get out very much but other insurance professionals do—and they genuinely like it. “It’s fun to meet all the different people who buy your policies,” says one insider. The business is intrinsically social and involves meeting and helping other people. Whether they are selling and underwriting new policies, handling claims, or managing risk, people who work in insurance have a lot of contact with the world at large.

Always Learning Most insurance occupations have trade organizations that run certifying exams and continuing-education programs, and most employers support their employees’ efforts. In addition, many insurance employers offer tuition-reimbursement programs for people who want to get their master’s degree. This increases opportunities for salary adjustments and promotions, and adds to the variety of your work. It also can make you more attractive to another employer, inside or outside the insurance business.

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Great Benefits It’s hard not to like reasonable hours and rich benefits packages. In general terms, insurance employees feel taken care of by their employers, and who can complain about that? Typically, you will work a normal week with time on evenings and weekends to spend with your family.

Transferable Skills If you decide you don’t like working for your present employer or the insurance industry, you still have several ways to cash in your experience. Insurance is an analytical field. People trade off risks and rewards to develop new products and keep clients happy while maintaining profitability. You may sell to new clients, provide services to keep existing ones happy, or deal with them in times of stress when they have to make a claim. All these skills are useful to employers in a wide range of industries.

Watch Out! The Exams The endless quest for certification can be exhausting, particularly for actuaries. And it doesn’t let up. “Six months out of the year, there’s a huge guilt cloud over your head,” says one actuary. “And I don’t like the competition that the exams cause at the office.” Succeeding on these exams involves a lot of study, which is largely expected to take place on your own time. The exams have real consequences for your career, too. “You need to perform on these exams,” says one actuary. “It’s not like taking a college exam anymore where a 90 percent is an A.”

The Pay There are trade-offs for cushy benefits, palatable hours, and secure employment. You can be very comfortable financially working in insurance but you might never get rich. Reading about your MBA friends’ recent IPO or investment banking bonus might make you envious though the hours they spent on the job to make those otherworldly sums probably won’t.

at a glance

The Red Tape the industry

Insurers are big companies, and state regulators make sure they do things by the rules. In addition, firms make money from investing a policyholder’s float, so they have very little incentive to settle claims in a timely manner. These factors help create a bureaucratic culture of meetings and memos, procedures, forms, channels, and chains of command. If you have ever filed a health care claim, you know what kind of runaround an insurance company is capable of pulling. Think of what it might be like for an employee turning in a tardy expense report or requesting nonstandard office supplies. One insider shared the story of how the facilities department of the insurer he worked for once conducted an investigation of how people used bulletin boards in their cubicles.

the companies on the job

The Paternalism

the workplace

Sure, those wellness programs are nice—until you’re at the summer picnic and it’s 100 degrees outside with 90 percent humidity, and you can’t get a single beer because that conflicts with the company policy of reducing employee exposure to unnecessary health and safety risks such as alcohol consumption. No joke; this has happened.

The Lack of Prestige

getting hired

Some of the insiders we spoke to appeared a bit on the defensive side: No, they don’t sell any life insurance. And yes, there are a number of ethical insurance salespeople. No, actuaries are not geeks. And yes, it really is interesting work. At the next family gathering everyone will be more impressed with your cousins who went into investment banking and computer programming, even if you have a better job. If you suspect this would bother you, insurance might not be right for you.

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6

The Recruiting Process................... 58 Interviewing Tips........................... 60 Getting Grilled............................... 60 Grilling Your Interviewer................61 Alternatives to the Insurance Industry ........................ 62

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Careers in Insurance & Risk Management

The recruITInG prOcess for talent. Trade journals and industry magazines regularly feature articles lamenting the dearth of attractive candidates, which has led to forceful recruiting campaigns at fi rms large and small. Bigger companies have expanded their recruiting eff orts on various fronts—they’re visiting schools, presenting at job fairs, and overhauling websites to appeal to a younger, tech-savvier generation of applicants. Face-to-face networking is still one of the best ways to enter the fi eld. If you want to change jobs or you’re just getting started, it’s very helpful to talk to people you know in the business and ask them about career opportunities. Consider starting with insurance agents around you: Call up the agent who provides the health, life, auto, or other insurance for you or your parents. Th ey’ll be able to direct you to other professionals they work with who can talk to you in specifi c detail about opportunities at their fi rm and within the industry in general.

gETTINg hIrED

ThE WOrkPlaCE

ON ThE JOb

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Simply put, insurance companies are desperate

π q&a with rob Drennan Rob Drennan is an associate professor and chairman of the Department of Risk, Insurance, and Healthcare Management at Temple University’s Fox School of Business and Management. What trends are you seeing among graduates going into insurance and risk management? Well, they don’t go to work for insurance companies, that’s for sure. So who recruits our students? Insurance brokers, insurance consultants, noninsurance companies in the risk management business. That’s where the vast majority of our students go, because those types of companies have well-developed college recruiting programs. What can students do while they’re in school to make themselves attractive candidates when they reach the job market? They should take professional exams, and they should do internships. They should also be engaged in professional-development activities, so it’s not just, “Oh, look: I took some courses and got a degree.” They should do much more beyond that. What technical skills are most in demand? Students with good analytical skills and who can think outside of the box and who are entrepreneurial are the ones I see doing best in the field. how important are soft skills in insurance and risk management? Oh, they’re very important. That’s because insurance, like many other businesses, is built on relationships. We’re not ever going to see a situation where every insurance transaction is handled on the Internet, where you just submit a quote, and someone responds to it online. There’s got to be a lot of relationship-building and trust, whether you’re on the carrier side, the broker side—even the client side.

FOr yOur rEFErENCE

What other advice do you have for students considering insurance or risk management for their career path? Go to a school that offers a good risk management program. More and more companies are finding these programs and realizing the value in them. Almost on a weekly basis, I take calls from firms saying, “We want to recruit your students.”

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at a glance

Undergraduates

the workplace

Your best bet is networking, hedged with searching the Web for listings and working with capable recruiters. Insurance companies hire people from outside the industry for almost every type of non-actuarial position. Start by talking to people at companies where you’re a customer, either for personal coverage or for your work: Insurers want to keep their customers happy. This truism might not extend to offering you a job, but it might help you get an initial interview or the name of the appropriate hiring manager. There also are trade organizations that offer classes or sessions where you can meet people from the industry while you learn about it. Check these organizations’ websites (a sample is provided at the end of this guide) for events in your area. If you’d like to be an agent, by all means pick up the phone and make a call. Insurance companies want agents who are totally comfortable making cold calls.

on the job

Insider Scoop “We’re looking for that general managementtype talent at all levels, and if it brings along a specialty, such as a tech background or an accounting background, that’s a plus right there.”

getting hired FOR YOUR REFERENCE

Insurance companies don’t limit their recruiting to the prestigious business schools, because they know MBAs from the big-name schools will be more interested in an investment banking position than one in insurance or risk management. The largest companies run summer internship programs for MBAs and extend offers to many of those students. MBAs also can apply directly to hiring managers, because many companies want MBAs but do not have formal programs to lure people to their oncampus interview sessions. Health insurance companies are often on the lookout for pharmacists; some are recruited directly from campuses. Other health professionals tend to be hired more by word of mouth than via campus visits.

Midcareer Candidates

the companies

MBAs and Other AdvancedDegree Candidates

Many of the larger insurance companies hire inhouse legal staff, though they try to look at people with law firm experience, rather than hire directly from law school. A number of law firms specialize in insurance defense, so if you’re a JD with a strong interest in investigating claims and negotiations, this might be for you. But if you’re more interested in crusading, you should probably work on the plaintiff side.

the industry

Used to Facebook, iPhones, and GPS navigation systems, younger applicants are more likely to conduct their job searches online. Insurance and risk management companies understand this and have retooled their websites to recruit entry-level hires. The more aggressive (and typically larger) firms pair this approach with campus recruiting divisions that regularly deploy representatives to college job fairs. Winter visits are especially common, between the sittings for actuarial exams in November and May. If you’re interested in becoming an actuary, by all means, take some of the exams! No doubt about it, you’ll impress employers—as long as you pass the exams, of course. Internships also provide a fantastic introduction to potential employers. Some internships are paid and will even offer subsidized housing, transportation and monetary benefits that only gild the priceless experience of seeing firsthand the inner workings of what might be your future employer. But don’t forget that internships are a two-way street: Companies are sizing you up as carefully as you’re studying them. And if you do a good job during your junior-year internship, you might find a job offer extended for when you graduate.

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At A Glance The industry the companies

Interview Tips Before the Interview •

Always, always research the company where you are interviewing. At a minimum, know what kind of policies they write (business or personal; life, health, property-casualty) and what their ownership structure is (mutual, stock, or nonprofit). It’s also helpful to be aware of any recent acquisitions they have made or strategic initiatives they have begun.

•

Decide why you want a particular job. Is there something about claims that truly appeals to you? Are you an oddsmaker at heart? Do you love talking to people? Do you want to crunch numbers? Would you prefer a home office or a field office?

•

Insurance is competitive but not bloodthirsty. You should know what makes a company unique. You don’t have to choose sides—this isn’t Microsoft vs Apple, or even Macy’s vs Gimbel’s—but interviewers want to know why you’re interested in one company over another, so be prepared to tell them.

the workplace

On the job

Careers in Insurance & Risk Management

FOR YOUR REFERENCE

getting hired

•

Insurance is a conservative field. Dress accordingly: suits for men, suits (preferably with long skirts) for women. Several companies have “business casual” or casual Friday dress codes, but it’s not a good idea to test the boundaries at your interview. In fact, some of the hiring managers we spoke to were shocked to learn that their Silicon Valley counterparts encourage casual dress at job interviews. “You have to show you are serious,” says one reproachfully. Likewise, be on time.

while answering or posing questions. Strike down the geeky actuary stereotype! •

Be thoughtful. People in the insurance business have to solve problems for the company and their clients. If you blurt out a short answer to a complex question, you might give the impression you won’t carefully calculate a premium or be judicious in negotiating claims. Instead, take a moment to think through the question and to come up with an appropriate answer.

•

Maintain eye contact. Looking into an interviewer’s eyes while he or she is talking helps convey the feeling you’re interested in—and gathering information about—what is being said. When answering questions, don’t avert your eyes. Looking at a person straight in the eye helps convey your message and gives the impression you know what you’re talking about.

Grilling Your Interviewer You should see your interview as a menu: Pick

from the questions below on the basis of the type of insurance company you’re planning to talk with. For example, a health insurance company won’t have significant experience with earthquakes. You also have a range to work with: “Rare” questions are meant to be boring and innocuous, while the “Well-Done” ones will help you put the fire to your interviewer’s feet. However, only take these as a jumping-off point; we strongly encourage you to spend time preparing questions of your own.

During the Interview

Rare

•

Use good body language. Don’t cross your arms or your legs, but instead have an open posture. Lean forward when listening to the interviewer and

•

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What kinds of support do you offer for continuing education? Is certification mandatory?

at a glance

•

What is the average tenure of your employees?

•

What is your company’s share of the market (HMO, personal life, annuity, commercial risk, workers’ comp, and so on)? How has it changed during the past five years?

•

Where and in what capacity did your CEO start in the insurance business?

Medium

Getting Grilled Because most insurance companies are large and established enough to have professional human resources departments, your interviewer might have a script to follow. (Any kind of question is fair game for you, the candidate.) Here are some questions you might expect to be asked: • Have you taken any actuarial exams yet? Did you pass?

•

What is the company’s approach to mergers and acquisitions?

•

What motivates you? How do you keep yourself motivated in a difficult situation?

•

What percentage of your business comes from international work? Is that handled here or locally?

•

What is your experience with giving formal presentations or reports to top managers, coworkers, or customers?

•

What type of diversity programs do you have in place?

•

What types of written presentations, proposals, or reports have you done?

•

Tell me about a situation in which you had to overcome someone’s objections to get something accomplished. What did you do?

•

Tell me about a situation in the recent past when you had to resolve a conflict with someone in a short amount of time and you did so with a positive outcome.

•

What do you like to do when you’re not working?

•

What would your coworkers or classmates say about you? Why?

•

Tell me about yourself. (The all-time worst interview question.)

Well-Done •

How has the company prepared for the possibility of another catastrophic natural disaster and the impact of another Hurricane Katrina on its books?

•

What is more important to an actuary’s success, job performance or passing tests?

•

How do you run a big company without letting it get too bureaucratic?

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FOR YOUR REFERENCE

What are your study habits? How do you do under pressure?

getting hired

•

the workplace

How many people are promoted internally each year?

on the job

•

the companies

How will you compete against direct-marketing companies such as GEICO or Progressive?

the industry

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Careers in Insurance & Risk Management

Special Tips for Students Recruiters are looking for certain types of people, and they will try to assess your work habits, even if (or perhaps especially if ) you lack professional career experience. If you worked nights serving pizzas, be prepared to discuss that job in terms of satisfaction, likes, dislikes, and your relationships with coworkers. As a student, you don’t have a list of impressive professional credits and achievements to state your case for you. You will be looked at for your potential. This means interviewers will pay attention to your communication skills, your ability to learn, and your thought process. The less you have on your resume, the more first impressions count.

Alternatives to the Insurance Industry Consulting Several outside firms provide services to the insurance industry or use the expertise of insurance professionals, especially actuaries. For example, most large accounting firms offer actuarial services as part of an accounting or management consulting practice, which their clients need to set pension fund liabilities or to calculate regulatory reserves. This is a great field for actuaries who want some client contact and management experience. It’s also more entrepreneurial than the typical insurance staff position.

Corporate Risk Management Midsize and large companies have people on their staffs to quantify and reduce business risks and to handle purchases of commercial liability or propertycasualty insurance policies. The money can be good 62

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(for a major manufacturing company, insurance is a significant part of doing business), and this may suit people who aren’t comfortable with the customer service aspect of insurance.

Government Insurance is mostly regulated on the state level, but there is some federal regulation as well. People who have an interest in the public sector and insurance might feel quite at home handling regulations, checking compliance, or even running a local government’s workers’ compensation, health care, or high-risk auto insurance plan.

Human Resources Human resources personnel at companies handle the purchase and administration of employee benefits plans, making them key customers for health and life insurance companies. They can be very powerful customers, especially at larger companies.

Law Many claims, particularly those for property-casualty incidents, end up going into litigation. Insurance companies may hire outside lawyers to work these cases, especially if they need one with a specific area of expertise. We spoke with one lawyer who has handled all the asbestos claims for one insurance company over the past seven years. This work is called insurance defense and is commonly performed by midsize law firms. However, it is common for a number of corporate litigators to become involved in complex environmental and product liability cases. On the other side of the legal fence are those personal injury and plaintiff’s lawyers who sue insurance companies. These lawyers range from ambulance chasers, who try to turn minor incidents into big paydays by going after the deepest corporate pockets they can find, to sophisticated advisers who help individuals and businesses work through the morass of claims paperwork to negotiate appropriate settlements.

at a glance

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the companies

on the job

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For Your Reference

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Industry Jargon.............................. 66 Recommended Reading................. 68 Online Resources........................... 69 Professional Organizations and Communities.......................... 70

At A Glance The industry the companies On the job the workplace getting hired FOR YOUR REFERENCE

Careers in Insurance & Risk Management

Industry Jargon Agency

written and losses paid, excluding consideration of its investment income. It’s not unusual for combined ratios to approach or exceed 100 percent if a firm’s investment income is especially high or if it has suffered unusually big losses during a given year.

An independent company that sells insurance. It might be a one-person shop or a large regional firm.

Comp

Annuity

D&O

A contract sold by an insurance company that pays guaranteed regular income, either for the rest of a person’s life or for a specified period. Such contracts are often sold as part of a retirement plan. In some ways, you can view it as the opposite of life insurance. With life insurance, the company tries to determine how long it will be until an insured person dies and it has to pay up. With the annuity, it also wants to know how long it will be before a person dies, but this time because it has to make payments until the insured party dies.

Directors and officers liability insurance, a standard commercial line.

Asbestos A mineral fiber used in insulation and fireproofing. If inhaled it can cause a serious, often fatal lung disorder known as asbestosis. Affected miners, manufacturing employees, and construction workers sued their employers, resulting in the largest product-liability settlement in history. Several manufacturers went bankrupt; insurers and reinsurers scrambled to pay claims while maintaining solvency. See also: Tobacco.

Broker A broker is an independent insurance agent who represents clients rather than insurance companies. Corporations usually hire them to find cost-effective insurance plans to cover corporate losses and oversee employee benefits.

Combined ratio In simple business terms, this equals the loss ratio plus the expense ratio (see below). It measures profitability for an insurance company on the basis of premiums 66

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See Workers’ Compensation.

Demutualization A sometimes controversial process by which mutual insurance firms convert to stock ownership. Sometimes the policyholders receive a distribution of cash or stock, and sometimes they don’t. If the original company was established as a nonprofit, a charitable foundation might have to be established. But there are good reasons to go through demutualization. Depending on a state’s regulatory structure and the market values of acquisition targets, a company might have to demutualize in order to expand its range of products, enter new geographic areas, or raise funds. See also: Mutuals.

Expense ratio The quotient of incurred expenses divided by written premiums—a quick way to measure the operating costs of a business. See also: combined ratio, loss ratio.

Financial services What most life insurance companies diversify into. Includes some or all of the following: annuities, brokerage services, money management, mutual funds, retirement plans.

Guaranteed income contract Often known by the initials GIC (pronounced “gick”), this is an insurance product that guarantees a specific percentage return on investments. It is often the most conservative option within a 401(k) or other corporate retirement plan.

at a glance

HMO

Corporate headquarters.

Loss ratio

Premium The price of an insurance policy, set to reflect the likelihood of a claim being made against it.

Rating agencies

the companies

Home office

cost if they see doctors or use hospitals in the plan, but still provides coverage if the patient wants to see another practitioner.

Independent organizations that evaluate the ability of an insurance firm to pay its claims. A.M. Best, Moody’s, and Standard & Poor’s are the best known among these companies.

Reinsurance Insurance for insurance companies. An insurance company or corporation buys reinsurance to pay for claims more than a certain amount, which is usually in the millions of dollars. As a result, reinsurance companies are affected by catastrophic events such as hurricanes, but barely touched by day-to-day problems.

Managed care

Reserves

Any of several health insurance programs—including but not limited to HMOs and PPOs—that place limits on coverage, review doctor and hospital performance, and foster the use of preventative medicine. See also: HMOs, PPOs.

Assets on the balance sheet that insurance companies use to pay claims. The amount is set in part by regulators and in part by the analysis conducted by the firm’s actuaries. Reserves are invested in a variety of assets, ranging from short-term T-bills to real estate, depending on a firm’s risk profile and the overall likelihood of claims. For example, health insurance companies keep reserves in short-term, low-risk securities, while life insurance companies are often aggressive investors in venture capital, junk bonds, and commercial real estate.

PPO Preferred provider organization. A health plan that offers patients the option of a lower out-of-pocket

Rider Additional coverage on a standard insurance policy. Common examples include engagement ring coverage on a renter’s policy, earthquake coverage on a corporate facilities policy, or nonprofit activity coverage on a professional liability plan. WETFEET INSIDER GUIDE

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FOR YOUR REFERENCE

Insurance companies owned by their policyholders. In reality, policyholders have little say in corporate affairs, but often their premiums are lower in price and their service better than with an incorporated firm. See also: Demutualization.

getting hired

Mutuals

the workplace

Medical malpractice insurance, a property-casualty line.

on the job

Incurred losses divided by earned premiums—a measure of whether a company’s premiums are sufficient to allow a profit after claims have been made against them. Health insurance companies call this their medical loss ratio. See also: Combined ratio, expense ratio.

Med mal

the industry

Health maintenance organization. A health plan under which patients must see doctors and use hospitals affiliated with the plan. Premiums are usually lower than with more flexible insurance plans, and patients might have a very low out-of-pocket payment for physician visits and most prescription drugs. Politicians and the general public view them as evil right now, though anyone who has paid only $10 out-of-pocket for a two-night stay at a major teaching hospital appreciates their role in the insurance world.

At A Glance

Careers in Insurance & Risk Management

FOR YOUR REFERENCE

getting hired

the workplace

On the job

the companies

The industry

Term life Life insurance that pays if the insured person dies (from any cause except suicide in many states) during a predetermined time period. For instance, a company might provide life insurance for its employees, or a parent might purchase term life to help with expenses in case he or she dies before her children finish college and can support themselves. Usually, one upfront premium is paid.

Tobacco A weed many people like to smoke, and everyone except employees of The Tobacco Institute knows is bad for you. Several lawsuits filed by insurance companies charge the tobacco companies with selling a dangerous product that has led to increased health care costs. If the tobacco companies can be proven to have liability for illnesses caused by their products, health insurance companies will have a windfall and property-casualty companies a disaster. Check out the following website for more info: www.library.ucsf. edu/tobacco. See also: Asbestos.

Recommended Reading Would You Buy a Bridge from Warren Buffett? Would you, for that matter, buy a library or a street lamp from one of the world’s richest men? The worrisome combination of rising public infrastructure costs and depreciating municipal bonds might force citizens to do just that, a possibility questioned here by seasoned business writer Jesse Eisinger. He weighs the pros and cons of the decision by Eric Dinallo, a top New York state insurance regulator, to reach out to Warren Buffet and Berkshire Hathaway, the financial tycoon’s wildly successful holdings company. Though Dinallo’s attempt stemmed from a desire to dampen panic about the lack of public funding for bridges, hospitals, schools, and tunnels throughout New York, Eisinger comes down hard on municipal bond insurance, calling it a “giant taxpayer rip-off.” Source: Jesse Eisinger, Portfolio.com, March 2008

Whole life Life insurance that covers a person for the rest of his or her life. People tend to buy it when you’re young and premiums are cheaper. And that’s a good thing for carriers because the insured pays regular premiums for the rest of his or her life.

Workers’ compensation State-mandated insurance that pays for medical care and lost wages for people injured on the job. This is a property-casualty line. In addition to the policies sold by commercial insurers, most states run their own comp funds. Comp has become notorious for its fraudulent claims—everything from “Monday morning injuries” (people injured at home during the weekend who fake an injury at work first thing Monday to get comp coverage, which is better than regular medical insurance) to outright fakery.

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Confessions of a Risk Manager A leading global bank risk manager reveals the sordid truth of 2007’s credit crisis. Though anonymous, the article’s knowledgeable tone reassures readers that they’re in the hands of an experienced vet, a savvy insider who takes you through the crisis that occurred when bank credit liquidity dried up and investment managers were forced to address critical errors in risk calculations. He’ll remind you again about the importance of wise decision-making and explain why short-option risk profiling should be avoided. Source: Economist Staff, The Economist, August 8, 2008

The Insurance Scandal—Just How Rotten? This special report details the slew of 2004’s industry scandals, particularly those involving the Greenberg family, which were brought to light by New York’s then–attorney general and insurance troll, Eliot Spitzer. After barreling through the front doors

at a glance

Wallace Stevens: Collected Poetry and Prose

Double Indemnity

www.iii.org Established to improve the public’s understanding of insurance—what is it, how it works—the Institute’s website houses info on all types of insurance, as well as stats, interviews, and the latest buzz in the field. The financial services, banking, and investment sectors each receive careful attention, too—just check the site’s Facts and Statistics page.

Insurance News Net www.insurancenewsnet.com This is a superb industry resource and hub for all the action surrounding insurance and risk management. Here you can sign up for a monthly e-newsletter featuring more than 1,000 articles covering breaking news, trends, mergers, strategies, and sales concepts. You also can register to receive a free print subscription to Insurance News Net Magazine and stay in the loop with updates about insurance conferences, seminars, and other networking events

getting hired FOR YOUR REFERENCE

A classic potboiler perfect for those interested in claims, this novel (originally published in 1935) profiles hard-charging insurance salesman Walter Huff, who’s making his way up the corporate ladder and getting bored in the process. Things don’t stay dull for long when he meets Phyllis Nirdlinger, the wife of a would-be wealthy client—a woman who married for money, only to find that her husband didn’t have any. However, the missus and the now-smitten salesman find a silver lining: the double indemnity clause of the husband’s life insurance. While the two orchestrate their plot for an “accidental” death, only the inquisitive claims investigator can bring justice. What better read for the aspiring claims rep?

Insurance Information Institute

the workplace

Source: The Library of America, 1997

A collaboration between the Society of Actuaries and the Casualty Actuarial Society, this site is a no-bull resource for aspiring actuaries at the high school, college, and midcareer levels. Whether you’re new to the field or clued in to its ins and outs, you can take advantage of the comprehensive wealth of information and news about actuary career fairs, required college courses, compulsory examinations, job finding, and day-to-day work experience offered here.

on the job

Who says insurance and risk management aren’t lyrical endeavors, singing with poetic magic? Actually, a lot of people say that, but Wallace Stevens spent years in the business and still managed to produce some of America’s greatest poems. Find them compiled here in one generous volume encompassing the master’s essays, speeches, letters, and miscellaneous prose. Though his poems and prose seldom address either insurance or business, they could very well inspire that stunning policy or bond your boss has been wanting from you.

Beanactuary.org

the companies

Source: Economist Staff, The Economist, October 21, 2004

Online Resources

the industry

of companies such as AIG, ACE, and Marsh & McLennan with subpoenas and, later, state lawsuits, Spitzer unveiled all sorts of fraudulent behavior. Some of the dramatic behavior on display included collusion, bid-rigging, and even the exchange of life-threatening emails between insurers. The ghastly criminal charges triggered other international investigations, and the accused American companies faced billion-dollar drops in value.

Source: Vintage, James M. Cain, 1989

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At A Glance The industry the companies On the job the workplace getting hired FOR YOUR REFERENCE

Careers in Insurance & Risk Management

Professional Organizations and Communities Center for Risk Management and Insurance Research rmictr.gsu.edu Housed within the Robinson College of Business at Georgia State University, the Center for Risk Management and Insurance Research has been around since 1969 and is considered a key source of information on risk and insurance issues.

Independent Insurance Agents & Brokers of America www.independentagent.com An organization solely for independent insurance agents and brokers; this group counts more than 300,000 members within its ranks.

Institute of Financial Consultants www.ifconsultants.org A global network of certified financial consultants, the Institute of Financial Consultants offers an educational program leading to CFC designation. Its members represent the insurance, funds management, accounting, law, tax, and pension industries.

International Insurance Society www.iisonline.org Want to go global with your research on the insurance industry? Look no further than the International Insurance Society (IIS), where members trade ideas and build networks. Its site includes information on seminars, current news, and details about IIS membership.

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National Association of Insurance and Financial Advisors www.naifa.org This nonprofit represents 70,000-plus insurers and financial advisers across the U.S.

Risk and Insurance Management Society www.rims.org This organization offers government news, a directory, research, and a number of newsletters—all about risk management. You also can buy books on various aspects of finance from the society’s website.

at a glance

Ace Your Case - Consulting Interviews Ace Your Case® I: Consulting Interviews, 3rd ed. Ace Your Case® II: Mastering the Case Interview Ace Your Case® III: Market-Sizing Questions Ace Your Case® IV: Business Strategy Questions Ace Your Case® V: Business Operations Questions

Financial Services Careers 25 Top Financial Services Firms Careers in Accounting Careers in Asset Management and Retail Brokerage Careers in Investment Banking Careers in Venture Capital

WETFEET INSIDER GUIDE

FOR YOUR REFERENCE

INTERNATIONAL CAREERS 25 Top Global Leaders The International MBA Student’s Guide to the U.S. Job Search A.P. Moller–Maersk

Industries and Careers: Specific Careers in Advertising and Public Relations Careers in Pharmaceuticals Careers in Brand Management Careers in Consumer Products Careers in Entertainment and Sports Careers in Health Care Careers in Human Resources Careers in Information Technology Careers in Insurance and Risk Management Careers in Marketing Careers in Nonprofits and Government Agencies Careers in Real Estate Careers in Retail Careers in Sales Careers in Supply Chain Management

getting hired

Financial Services Companies Deutsche Bank Goldman Sachs Group J.P. Morgan Merrill Lynch Morgan Stanley UBS AG

Industries and Careers: General Industries and Careers for Engineers Industries and Careers for MBAs Industries and Careers for Undergraduates Million-Dollar Careers

the workplace

Job Hunting Getting Your Ideal Internship Job Hunting A to Z: Landing the Job You Want Job Hunting in New York City Job Hunting in San Francisco

Career Management Be Your Own Boss Changing Course, Changing Careers Finding the Right Career Path Negotiating Your Salary and Perks Networking Works! Green Careers Survival Guide for Women in Business

on the job

Resumes & Cover Letters Killer Consulting Resumes Killer Cover Letters & Resumes Killer Investment Banking Resumes

Consulting Companies Accenture Bain & Company Booz & Company Boston Consulting Group Deloitte Consulting McKinsey & Company

the companies

Interviewing Ace Your Interview! Beat the Street®: Investment Banking Interviews Beat the Street® II: I-Banking Interview Practice Guide The Wharton MBA Case Interview Study Guide: Volume I The Wharton MBA Case Interview Study Guide: Volume II

Consulting Careers 25 Top Consulting Firms Careers in Management Consulting Careers in Specialized Consulting: Information Technology Consulting for PhDs, Lawyers, and Doctors

the industry

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Who We Are WetFeet was founded in 1994 by Stanford MBAs Gary Alpert and Steve Pollock. While exploring their next career moves, they needed products like the WetFeet Insider Guides to guide them through their research and interviews. But these resources didn’t exist. So they started writing! Today, WetFeet is the trusted destination for job seekers aiming to research companies and industries, and launch and manage their careers. WetFeet helps more than a million job candidates each year to nail their interviews, avoid making ill-fated career decisions, and add thousands of dollars to their compensation packages. At WetFeet, we understand the challenges you face and the questions you need answered, so we do the research for you and present our results in a clear, credible, and entertaining way. Think of us as your own private research company whose primary mission is to assist you in making the best possible career choices. In addition to our Insider Guides, WetFeet offers services at two award-winning websites: WetFeet. com and InternshipPrograms.com. Our team members, who come from diverse backgrounds, share a passion for the job search process and a commitment to delivering the highest-quality products and customer service. WetFeet is a Universum company. Universum also publishes Jungle magazine, Jungle Campus, The Companies You Need to Know About, Hispanic Professional, and the Ideal Employer insert for Black Collegian. Through our combined efforts, we aim to provide you with an ever-expanding array of career resources that will put you on the inside track to a successful professional life.

“What’s the Story Behind the Name WetFeet?” The inspiration for our name comes from a popular business school case study about L.L. Bean, the successful mail-order company. Leon Leonwood Bean got his start because he, literally, had a case of wet feet. Every time he went hunting in the Maine woods, his shoes leaked. So, one day, he decided to make a better hunting shoe. And he did. He told his friends, and they lined up to buy their own pairs of Bean boots. And L.L. Bean, the company, was born . . . all because a man who had wet feet decided to make boots. The lesson we took from the Bean case? Lots of people get wet feet, but creative problem-solvers make boots. And the same entrepreneurial spirit motivates us at WetFeet! UNIVERSUM is the Global Employer Branding Leader As thought leaders, we drive the industry forward, having focused exclusively on Employer Branding for 18 years. We’re a trusted partner to more than 500 clients worldwide, including a majority of Fortune 100 companies. We help employers attract, understand, and retain their ideal employees. Our full-solution media portfolio—encompassing some 40 employer branding publications, ads, top company videos, and events—guides our audience of highly educated talent in the search to identify ideal employers.

management to sales and information technology, there’s a wide variety of berths for jobseekers from all backgrounds. It’s an industry that’s changing and growing—and aggressively recruiting young talent. If you’re looking for career that’s stable, interesting, and lucrative, insurance may be the place for you.

Illustration by mckibillo

>>Insurance may not be the glitziest industry around, but it abounds in job possibilities. From actuarial, claims, and risk

TURN TO THIS WETFEET INSIDER GUIDE TO LEARN: ★ WHERE THE OPPORTUNITIES ARE—AND HOW TO MAKE THE MOST OF THEM

★ WHAT INSURANCE WORKERS DO—AND WHY THEY LOVE IT

★ THE DYNAMIC TRENDS THAT ARE RESHAPING THE INDUSTRY

★ LIFE ON THE JOB: THE HOURS, THE CULTURE, THE SALARIES

★ HEAVY HITTERS—WHO THE BIG PLAYERS ARE AND WHAT MAKES THEM DISTINCTIVE

★ HOW TO NAVIGATE THE RECRUITING PROCESS—AND LAUNCH YOUR INSURANCE CAREER

WetFeet has earned a strong reputation among college graduates and career professionals for its series of highly credible, no-holds-barred Insider Guides. WetFeet’s investigative writers get behind the annual reports and corporate PR to tell the real story of what it’s like to work at specific companies and in different industries. www.WetFeet.com

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