Entry-level jobs in insurance sector
INS 1 INSURANCE AGENT/ADVISER
An Insurance Agent (also called an Insurance Adviser) is someone who is responsible for helping, persuading, and selling an insurance policy to clients. Agents can sell life, health, general, vehicle insurance policies to clients and receive a commission. An Insurance Agent has to pass an exam and is then issued a licence to practise by the Insurance Regulatory and Development Authority of India (IRDAI, commonly referred to as IRDA).
The Role of IRDA
The IRDA is the deciding authority on fixing the maximum commission payable, giving companies the flexibility to offer their agents any rate below that. It reviews the commission structure periodically, and a new commission structure is expected
How much does an Insurance Agent earn?
This is a very important question because Agents do not get a monthly salary; they get a ‘commission’. The commission is a percentage of the insurance premium annually paid by the customer who has bought a policy from the Agent.
The commission varies between Life and Non-life Insurance Policy Agents. It also varies from Agent to Agent and depends upon the commission structure of the company she/he is working for and the number of policies sold.
Life insurance commission structure
Typically, as mentioned above, the commission is a percentage of the annual premium and is paid in instalments—a high premium in the first year, smaller premium in the second and third year, and a small premium from the fourth year onwards. The first year premium percentage, as well as the total premium percentage rise with the number of years for which the premium is paid. The total commission paid depends upon the insurance product sold.
The first year commission varies from 5 to 25 per cent of the first year premium and goes down to 2 to 5 per cent of the annual premium from the fourth year onwards till the term of the policy.
Non-life insurance commission structure
This also depends on the type of policy—the highest commission is paid for Marine Cargo policies while a lower percentage is paid for Motor Vehicle Insurance. The commission varies from 5 to 15 per cent of the premium paid.
- Attending training sessions conducted by the company regarding new products/policies.
- Identifying prospective clients.
- Meeting prospective clients and explaining the various policies to them.
- Suggesting the most appropriate policy for clients based on their requirements.
- Collecting details of clients if they agree to buy a policy.
- Ensuring that forms are filled and the required documents are collected.
- Collecting the first premium and delivering it to the company.
- Ensuring that policies are issued on time.
- Ensuring that policies are renewed, on time, in case of non-life insurance.
- Tracking future premiums to ensure that policies do not lapse, in case of life insurance.
- Helping the insured in making claims whenever required.
- Following up with the company to ensure quick disposal of the claim.
- Seeking referrals from existing clients for new clients.
- Complying with the company’s policies and procedures.
INS 2 DEVELOPMENT OFFICER /UNIT MANAGER/AGENCY MANAGER
Insurance Agents are not employees of the insurance company and require continuous supervision, encouragement, and support. The insurance company employee who manages a group of Agents is called a Development Officer (by LIC, India’s largest life insurance company), or Unit Manager or Agency Manager (by private insurance companies). We will use the term Development Officer hereafter to refer to all these three designations.
The employee who deals with agents in non-life insurance is also called a Development Officer.
How much does a Development Officer/Unit Manager/Agency Manager earn?
This typically depends on the company you work for as well as your work experience. Your salary is directly proportional to the number of policies your team (you and the Agents under you)—is able to sell and the amount of business it is able to bring. You will be responsible for motivating and training your team of Agents. So the better you motivate and train them, the more business they get and the more you all earn.
- Discussing targets with superiors and then achieving them.
- Recruiting and training Agents.
- Helping Agents pass the IRDA exam.
- Discussing targets and arriving at action plans with Agents.
- Training Agents on new product launches.
- Monitoring Agents’ performance on a daily basis.
- Motivating Agents to achieve sales targets by providing leads, doing joint client calls, and providing them with constructive feedback to boost their confidence.
- Helping Agents get their commissions on time.
INS 3 UNDERWRITING EXECUTIVE (TRAINEE)
When a proposal (or an application) for insurance is submitted, insurance companies need to check the policy, assess and analyse the risk involved, and then decide how much premium should be paid by the customer based on the documents submitted.
Most Underwriting Executives specialize in any one type of insurance. The main types of insurance are as follows.
- General insurance, which covers household, pets, motor vehicles and travel.
- Life insurance/assurance, which covers illness, injury, and death.
- Reinsurance, where part of the risk is placed with another insurer.
- Studying insurance proposals.
- Gathering and assessing background information in order to effectively assess the risk involved.
- Calculating possible risk and deciding how much individuals or organizations should pay for insurance (the premium).
- Deciding whether the risk should be shared with a reinsurer.
- Computing results for appropriate premiums using actuarial information, other statistics, and own judgement.
- Visiting brokers or potential customers and preparing quotes.
- Liaising with specialists, such as surveyors or doctors, for risk assessment.
- Gathering information and various types of reports (for example, medical records), from specialists.
- Negotiating terms with policy-holders or their brokers.
- Ensuring that premiums are competitive.
- Specifying conditions to be imposed on different types of policies, for example, asking that a property owner install a security alarm.
- Negotiating with brokers and drawing up contracts.
- Writing policies.
- Keeping detailed and accurate records of policies underwritten and decisions made.
INS 4 CLAIMS OFFICER
The purpose of taking an insurance is make a claim when an untoward a accident happens. Insurance Claims Officers are involved in managing a claim from the beginning through to settlement.
A Claims Officer ensures that insurance claims are handled efficiently. He acts like a broker between the policy-holder and the insurance company. The officer decides on the extent and validity of a claim, checking for any potential fraudulent activity. Apart from communicating with policy-holders, Claims Officers also liaise with external experts such as Loss Adjusters and Lawyers.
Depending on your experience and level of responsibility, typical activities may include:
- Providing advice on making a claim and the processes involved.
- Processing new insurance claims notifications.
- Collecting accurate information and documents to proceed with a claim.
- Analysing a claim made by a policy-maker.
- Guiding policy-holders on how to proceed with the claim.
- Contacting trades people from a network of company-approved professionals, and arranging for them to make repairs on the policy-holder’s property.
- Monitoring the progress of a claim.
- Investigating potentially fraudulent claims.
- Identifying reasons why full payment may not be made.
- Ensuring fair settlement of a valid claim.
- Building relationships with Loss Adjusters, Forensic Accountants, and Solicitors, as well as other legal/claims professionals.
- Ensuring the policy-holder is treated fairly and receives excellent service in accordance with industry and company guidelines.
- Handling any complaints associated with a claim.
- Involvement in loss-adjusting activities and in legal discussions relating to settlement.
- Seeking legal recovery of monies paid out.
- Managing a team of Claims Handlers (at managerial level).
- Taking responsibility for productivity and profit.
- Adhering to legal requirements, industry regulations, and customer quality standards set by the company.
Author: T. Muralidharan
Name of publication: Telangana Today
Date published on:
published in: Hyderabad
Tags: Jobs and Careers