Take cover in insurance
Usha Albuquerque

THE insurance stories on TV are familiar. There is the widow smiling through her tears as she gets her daughter married. Her late husband had invested in life insurance. There is also the family that is not unduly disturbed, when they return home to find all the valuables burgled. The household was insured. Or, there is the elderly father refusing the assistance of his son. He can stand on his own. All of them have the same happy ending — ‘insure and be secure.’

Today, insurance has become a household word. There are also insurance policies for almost all eventualities — sickness, death, travel, accidents, fire, theft, and so on.

Twenty years ago, there was only one life insurance company, the LIC, and three general insurance companies. Currently, there are 12 major private insurance companies in the market, and many more looking at opportunities in India. As a result of the rapid expansion in this area, more than 5 lakh jobs have been created in the last five years, and this trend is likely to continue.

Insurance is a security against loss, and is undertaken by contract whereby one party indemnifies or guarantees another against loss by a specified contingency, the amount for which it is insured. Insurance can, therefore, cover life, health, goods, equipment, buildings, business, travel — anything of value to the person or organisation making the coverage. An insurance cover is taken wherever there is heavy investment, so that in the event of any mishap, damage or loss, the sufferer can easily seek reimbursement. Due to the greater awareness and concern for ensuring life coverage in the event of the death or disability of the family’s income earner, or loss of a house, car or any valuable asset, there are today a variety of insurance policies to suit all income groups.

The major government insurance companies are: Life Insurance, General Insurance and Postal Life Insurance. The LIC deals with the insurance of life, while the General Insurance Corporation (GIC) deals with every other type of insurance except life i.e. motor, marine, personal, accident and fire insurance, and so on. The GIC has four subsidiaries, namely the National Insurance, New India Assurance, the Oriental Fire and General Insurance and United India Insurance. In recent years, 12 private companies, including HDFC, Birla Sunlife, ICICI, Max, and Kotak Mahindra, have set up offices in India, competing with the government’s 43-year-old monopoly in the field of insurance.

The field of insurance can be divided into several functional areas. These include formulation of insurance policies, administration, development, marketing, investments and accounts.

An actuary is one who formulates insurance policies. Actuarial science is the science of calculating insurance risk, premiums and pension programmes. Actuarial science is built on the statistical evaluation of the financial and economic implications of possible future contingencies. While formulating a policy, premium constitutes the most important aspect. It should be formulated in such a manner as to make it advantageous for the consumer as well as the company. This requires strong mathematical skills.

Administration: The adminis- trative officer deals with the registry of claims within certain permissible financial limits.

Development: The development officer deals with the marketing and procurement of business, meeting prospective clients, promoting the policies and getting contracts.

Accounts: An accounts officer deals with the management of funds and their disbursement , including staff salaries etc.

Investment: The investment department is responsible for the investment of funds of the insurance company in such a manner as the corporation may think fit.

In addition, all insurance companies function with agents whose job involves selling insurance policies on behalf of the insurance company.

An insurance surveyor is a specialist who makes an assessment of the losses and claims put forward by the client. He/she helps insurers by minimising and avoiding false, exaggerated claims; and helps the insured, who have suffered a genuine loss, by indemnification of their losses. Most surveyors are not attached to any insurance company, and act as the link between the insurers and the insured.

Ten years ago, there were no formal courses for insurance, and graduates with a commerce or economics background could join insurance companies and learn on-the-job. The LIC and the GIC continue to recruit graduates for the posts of Assistant Administrative Officer: All AAOs (Class I officer) must be between 21 and 28 years, graduates/postgraduates in any subject with a minimum of 50 per cent marks, from a recognised university.

The AAOs’ recruitment is through an All-India level exam on the lines of an objective test, which tests intelligence and quickness of response rather than just memory. The sections include quantitative aptitude, logical reasoning and general knowledge. Shortlisted candidates are called for an interview after which they are sent to the training centres. After training for a period of six months, the candidates are instituted as AAOs in the corporation.

Insurance Agents: The age for recruitment of insurance agents is 22-35 years. There is no stringent stipulation regarding qualifications, although graduates are preferred. Candidates have to take a written exam, which tests their personality, the language and mathematical skills. After completing the training programme the candidate is awarded a certificate of proficiency (in agent taking) by the insurance company.

An insurance surveyor is a person who is technically qualified. Surveyors are generally recruited by general insurance companies and get commission for each survey. To be an insurance surveyor, you need to hold a license. To be eligible to hold a license, an insurance surveyor must fulfill one of the following qualifications:

• Fellowship or Associate-ship through the exam held by the Institute of Insurance Surveyors and Adjusters (IISA), Bombay.

• Degree or diploma in architecture from a recognised University or Institute.

• Fellowship or Associate-ship of the Institute of Chartered Accountants or Cost and Works Accountants.

• Degree or diploma from a recognised engineering institute.

• Degree or diploma in naval architecture.

With the entry of the private sector firms, now the emphasis is more on recruiting people with some formal training that can be helpful in the insurance field. An MBA is the most sought after by private insurance firms who take in management graduates to work mainly in the areas of marketing and sales. Candidates with a degree or PG diploma in insurance, actuarial science or insurance management are also in demand.

Actuarial science is also offered as a three-year degree course by some universities, or as one of the subjects of a degree programme. Some universities such as Delhi University and Guru Nanak Dev University offer insurance as a subject in its BA course. There are a few institutes offering courses related to insurance, such as a postgraduate diploma in management and marketing of insurance and MBA in insurance. The PG diploma courses are also offered by some institutions authorised by the Insurance Regulatory and Development Authority (IRDA). If you want to get admission to these courses, you need a bachelor's degree and at least two years' field experience in insurance. Besides, the IRDA also offers a 100-hour insurance agent course. Here, the minimum qualification is plus two and insurance companies sponsor the course for their agents. An actuary has to pass an entrance exam conducted by the Actuarial Society of India

The highest qualification for a career in insurance is that of a Fellow of the Institute of Insurance, London. This requires a licentiate in insurance, for which three papers have to be cleared, followed by eight papers for an associate, and a further four papers to qualify as a fellow of the Insurance Institute. The training imparts skills in the science of assumptions and probabilities, and fine-tunes arithmetical and mathematical faculties.

A degree in insurance does not necessarily guarantee success in this field. You must possess mathematical skills, and an analytical bent of mind. Good communication and networking skills along with presence of mind, confidence and ability to persuade others is important for those looking towards a career as an agent, and in the marketing and customer care areas. Moreover, given the flexible timings the job of an agent offers a lucrative career option to women with domestic responsibilities and even retired personnel with some marketing acumen.

Even though this is still largely a nationalised sector, there are plenty of jobs, in private companies, consultancy firms, stockbroker firms, and government services. With the rapid increase and growth of specialised industry and engineering and the heavy finances involved in such sectors the insurance sector has received a major impetus for growth. In fact, it is estimated that the requirement for trained professionals is expected to be more than 25,000 over the next 2-3 years.

The pay packages are quite handsome at the middle and the senior levels. But at the entry level, commission forms the main source of income, particularly for agents. The earnings are related to achievement of targets set by the company. Many insurance agents have been able to build a fortune on hard work and determination. In the private sector, starting salaries are in the range of Rs 5,000 to Rs 8,000 per month, while management graduates can start with Rs 12,000 to Rs 20,000 per month.

Insurance is also one of the major growth areas, particularly because only 24 per cent of 300 million potential people are today insured for life. Health insurance has hardly been tapped and there is scope for risk coverage of other items too, such as films, books, and so on.

So, go ahead, insure your career with a challenging career in insurance.

The writer is a noted career expert