February is known as Black History Month, American Heart Month,Oral Hygiene Awareness Month, and many others. For those of us inthe insurance industry, we know it as Insurance Careers Month.

We’ve been hearing for a while about how the industry is aging,and more insurance professionals are or will be retiring, whichmeans that the industry needs to attract people to it. Unfortunately,insurance is widely considered boring. If you mention it at aparty, unless someone has an open claim, people’s eyes tend toglaze over. Many, however, are not aware of the variety of jobswithin the insurance industry and their duties. We’re here toremedy that.

Related: Insurance leaders talk Insurance CareersMonth at virtual town hall

Start with marketing and sales

Let’s start at the beginning: insurance is a product that must bemarketed and purchased. Therefore, there must be people to marketand sell it. Insurance companies typically market their productsthrough employed sales representatives, but these representativesdon’t sell the product directly to the insured. Rather, they offerthe product to people known as agents or producers. These agents orproducers may be direct employees of the carrier, but more often,they are independent operators that represent more than oneinsurance company.

Agents tend to be outgoing, extroverted types who find it easyto talk to people and like to help them out.

You need a license

Insurance is a complicated business; it’s not like many jobs whereyou’re hired, you receive a few weeks of on-the-job training, andyou’re good to go. Agents must be licensed, and to be licensed theymust take a required number of hours of classes and pass alicensing exam.

There are multiple lines of business that an agent needs alicense for; one license doesn’t cover all aspects of the industry.A property & casualty license allows an agent tosell personal or commercial property and liabilitycoverages, which include homeowners, personal auto, personalumbrella, commercial general liability, commercial property,commercial auto, truckers, garage, and many others.

Life and health insurance requires a separate license, andannuities and financial planning require yet another license. Whenagents are licensed they’re allowed to write policies in the statein which they received the license; to write coverage in adifferent state, they must pass that state’s required exams.

Getting a license to write insurance isn’t the end of the story.Licenses must be renewed on an annual or semi-annual basis,depending on the state requirements. Each state has differentlicensing and renewal requirements. Likewise, a certain amount ofcontinuing education credits must be accumulated before a licensecan be renewed.

Related: Insurance industry education is more than justletters after your name

What do underwriters do?

An agent works with a person or business and when that person orbusiness decides to buy coverage, the agent fills out anapplication. Agents writing personal lines generally use quotingsystems that provide the rates from multiple carriers at one time.Agents writing commercial coverage complete an application and sendit to one or more insurance companies for underwriting and toobtain a quoted premium.

Insurance company underwriters review the applications anddetermine whether the risk presented fits the company’spre-established eligibility guidelines. The underwriter alsoreviews reports submitted with the application, such as drivingrecords, and Comprehensive Loss Underwriting Experience reports(CLUE) that show the applicant’s past accident history.

Not everyone is totally honest on an application, although ifthey’re not that’s considered fraud. If the underwriter discoverslosses or other characteristics of the risk that make the applicantineligible for coverage, the underwriter advises the agent.Underwriters do have the power to make exceptions based on thequality of the agent’s book of business and the risk in general. Anunderwriter may allow a marginal risk for an agent with an overallprofitable book of business, but there are some risks that willnever be eligible.

Related: 5 emerging underwriting strategies

Individual underwriters don’t write all lines of business.They’re broken out by specialty: personal lines underwriters,commercial lines underwriters, and life and health underwriters.Each underwriter reviews applications for specific types of risksand determines whether to accept the risk for the company. Theyalso review risks at renewal, looking at an insured’s losses todetermine whether the policy still fits the guidelines or whetherthere have been so many losses that the carrier is no longer ableto provide coverage.

Underwriters also match the information on the application tothe guidelines and determine whether the risk is eligible. Propertyapplications are often required to have a picture of the property,or an underwriter may require an inspection of the property. Thisis where a picture truly is worth a thousand words; pictures thatshow debris in the yard, loose dogs that won’t let an inspector outof the car, or trees growing in the gutters are all factors that anunderwriter uses to decline a risk.

Insureds have the right to file a complaint with the insurancedepartment if they dispute a cancellation or nonrenewal. Theinsurance department will send a request to underwritingto explain their reasons for the cancellation or nonrenewal.Underwriters tend to be analytical and must be able to explain whya risk has been declined, nonrenewed or canceled.

Actuaries set rates

The underwriters approve or decline the risk, but the actuary setsthe rates. Actuariesare very mathematical and numbersoriented, and they’re incredibly analytical.

An individual must pass a series of difficult exams to become anactuary. Actuaries look at loss data as well as other variables todetermine how to establish adequate rates for every type of riskand what variables should be considered in the development of therates. For example, the actuary may decide based on the data thatmales between ages 16–25 have poor driving skills and their ratesneed to be higher. Actuaries must be sure that the rates areadequate so that the company is able to pay claims when they ariseand cover expenses.

Statistics are a large part of the data actuaries review inorder to set rates. Actuaries also determine when discounts may beapplied to certain coverages. All rates must be filed with thestate insurance department for approval, and actuaries create andsubmit those filings. They field any questions the department hasconcerning the proposed rates.

Related: 5 reasons to be an actuary as acareer

Claims professionals

After the policy has been underwritten, rated, sold and issued, itmay sit there for years without a loss. But when a loss occurs, anumber of different professionals will be involved. An insured maycall his agent or the company call center. The call center isstaffed with customer service representatives (CSRs) who take allthe information about the loss: what kind of damage happened towhat property, whether there were injuries, when the loss occurred,the cause of loss, and other details. The CSR then assigns a claimnumber to the loss and assigns an adjuster who works that area orthat type of loss.

Depending on the type of loss, it may be assigned to an insideor outside adjuster. Inside adjusters are company employees whohandle injury claims, liability claims, glass and towing claims,auto claims when the vehicle is a total loss — basically any claimin which the adjuster doesn’t need to see the damage. For autoclaims, the inside adjuster also sets up the insured with a rentalcar if it’s needed and that coverage is available on the policy. Acarrier may at times use non-employee adjusters for areas wherethey don’t have an office or for catastrophic losses.

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Outside, or field, adjusters visit the site and inspect thedamage; for vehicle losses, there may be a drive-in center,although carriers more commonly work with repair shops to reviewthe damages for them.

Outside adjusters review the cause of loss and the resultantdamage, and they’re generally assigned a particular area to work sothey can efficiently handle claims without being spread too farout. They also review the policy coverages and exclusions todetermine whether there is coverage for the loss and process theclaim from there. Following company guidelines, adjusters handlesalvage property, set up contractors for repairs, set up theinsured in substitute housing or offices if the damaged building isuninhabitable, and settle the claim.

At times the claim is handed off to an inside adjuster forcompletion. After coverage has been determined, an inside adjustermay work with a repair shop or contractor to complete the repairswhile the field adjuster goes on to look at other losses.

Like agents, claims adjusters are often personable andenjoy working with people. They must also have specific training sothey know what type of damage has occurred and whether the propertyis repairable. Injury adjusters need to have some degree of medicalknowledge to know whether the injuries being claimed are likely tohave been caused by the type of accident reported.

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Fraud investigators

Not all claims are legitimate, however, and there may beindications that everything is not as it seems. A field or insideadjuster who suspects fraud then assigns the claim to a specialinvestigator. Special investigators are trained to spotinconsistencies in the details of a claim and interview theclaimant to determine what actually happened. They may look at thesalvage and talk to fire or police personnel.

Related: Software robots: New members of the fraudinvestigation workforce

Often, special investigators are former police officers trainedto interview people. They may surveille the claimant or verifyaddresses to confirm that the claimant lives where he says he does.Fraud is an enormous issue for the insurance industry, and specialinvestigators are important in detecting fraud.

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In-house counsel

Insureds and claimants may sue the company when they feel they havebeen treated unfairly in a claim. When a company is sued, theymay have an employed in-house attorney who handles the case. Thein-house attorney reviews the suit and the claims files todetermine whether the declination or the amount of settlement wasreasonable. The in-house counsel also deals with the claimant’sattorney and represents the company in the case if and when it goesto court. In other cases, the in-house attorney works with a lawfirm to manage the case.

Legal staff also reviews new coverage forms before they arefiled.

IT professionals

Like many organizations, insurance companies use computer systemsto store data including who and what is covered, what coverages areon the policy, whether payments been made and other information.Although the accounting department tracks premium and claimpayments, information technology (IT) systems ensure that thepolicies are correctly rated according to the actuarially definedspecifications. A reduction may need to be added to the premiumcalculation at a particular point in the rating process, and ITensures that the system properly rates the policy and trackspremium and claim payments.

Related: Insureds to relay data to insurers throughsmart home devices

Auditors and complianceprofessionals

Many insurance companies employ staff auditors who are responsiblefor periodically reviewing underwriting and claims files forcompliance with state regulatory requirements. This enables acompany to monitor its own employees and make sure thatthe decisions made and the forms and rates applied are inaccordance with the company filings made with the state.

In addition, some commercial policies with fluctuating exposuresare written on an auditable basis. At the end of the policy term,the exposures used in pricing and writing the policy are matchedagainst the insured’s actual exposures for that year. Depending onthe result the insured may be required to pay an additional premiumor may receive a return premium if the exposures were less thanexpected.

Finally, some carriers maintain staff to ensure the companypolicies and procedures comply with current state regulations andtrack new requirements. Agents must be properly licensed andappointed, and carriers need to know that agents’ licenses havebeen renewed.

Insurance careers are many and varied, but they all helppolicyholders in some way. To learn more about insurance careersand participate in the conversation, check out InsuranceCareersTrifecta.org.

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