LABOUR ECONOMICS
Insurance Broker Entry Strategies and Recruitment
Introduction
There has been a refocusing of attention on the insurance industry in recent times. A number of global events bring about this refocusing. For example, unanticipated claims encircled the insurance industry and adversely affected their bottom lines (2005). It is also the case that unabated calls for improving the services of insurance companies have been prevalent in the industry that it drove insurance companies to reorganize their ranks in order to provide the kind of service that their clients demands.
It is important to note that the insurance industry is complex. There are many branches in the insurance industry including general insurance, life insurance and insurance brokerage. In order for this complexity to be understood, one must invest time, effort and resources in understanding the nature of the businesses involved (). Therefore, working closely with clients, while utilizing domain expertise and perceptive technological comprehension, is essential. These are important if the insurance company wants to formulate a solution that is customized.
Customized insurance solutions can be more beneficial to businesses since they will be able to provide action plans that will target specific problems of the company and are of measurable benefits. As such, the complexity of the insurance industry can be countered by insurance company’s ability to deconstruct their clients’ businesses and then construct the best possible solutions based on the results of the deconstruction.
In addition, the significance of being able to provide customized solutions for business is highlighted by the fact that the face of the many businesses in today’s context is as complex. This means that risks and challenges in workplaces are also becoming more difficult. This difficulty is intensified by the intricately woven connections of various company departments such as finance, sales, customer service, technology and human resource. This means that the problems being experience by one department can be felt by other departments and as such, the performance of other departments can be affected by the problems of others. This means that the profitability of a company is partly dependent on the smooth working relations and operations of all departments.
Moreover, both internal and external factors are persistently threatening to offset the balance that ensures the profitability of companies. As the dependence of internal company departments increase, so does the interdependence of companies, both within and outside, the same industries. As such, many companies are turning to external sources that will help them in developing and managing applications that will enable them to have an edge over the competition. The edge comes from being able to differentiate themselves from other companies in the same industry.
In the case of the insurance industry, insurance and risk management is important since it identifies, evaluates, reduces and manages the risk in all the locations or countries that one specific business operates in. It is the case that experts in the insurance industry put their experiences and knowledge to work in order to help companies standardize as well as alleviate exposures that are distinctive to the sector of their business. It is also their responsibility to ensure that strategies and insurance programs are being implemented constantly in all the departments of the company. It is also crucial that local gaps are filled. Overall, as well as globally, insurance brokers play a crucial role in all of the processes abovementioned.
This means that insurance firms most ensure that the employees that will represent their firms will have the adequate skills and knowledge to aid companies in reaching their goals. Numerous companies know that a larger degree of risk retention could mean more benefits for them. Premium rates are also increasing. In addition, achieving and maintaining most favorable balance between transferred and referred risk for every specific client are reliant to the skills of brokers to obtain and design market support.
These factors contribute to the attitudes of insurers towards availing of the services of insurance firms. Premium rates and selectiveness of insurers are the factors that directly affect the insurance industry. This means that the choice to insure the risks will be less popular or perceived a not so important process to undertake especially in large cases. As such, insurance firms must ensure that the quality of their insurance brokers.
Insurance firms are now, more than ever, focused on hiring the best of the best to ensure that they will not fail the demands of their clients. Recruitment processes and requirements are stricter so that insurance firms will be able to screen the best possible candidate for the job.
In the same way, would-be insurance brokers are feeling the pressure of the industry. They know that the industry is getting more and more competitive. For that reason, they would have to strive harder in order to be noticed by insurance firm. In addition, they must be able to utilize effectively entry strategies. This means that would-be insurance brokers must be well aware of the changes that occurred and that are still occurring in and around the insurance industry. Familiarization to the changes within the industry will allow would-be applicants to better position themselves as well as their skills where they will be best noticed.
With this in mind, it is important to determine the entry strategies as well as the recruitment process within the insurance industry. This will allow would-be brokers to ready themselves for the challenges of attempting to enter the industry. In the same way, this will also be beneficial to insurance firms since the chances of hiring highly qualified applicants may increase. The following sections of the paper will be discussing the various entry strategies available to insurance brokers as well as the recruitment process generally being used within the insurance industry.
Entry Requirements and Recruitment
As stated earlier, insurance brokers apply their knowledge and skills in identifying and arranging suitable insurance coverage for both individuals and organizations. In actually they work as mediators between individuals or companies and insurance firms. As such, it is the responsibility of insurance brokers to assess accurately the risks of clients’. After which, they will look of the most appropriate policies to recommend to the insurance firms.
This means that insurance brokers must be client-centric, even though, the insurance firm that they work for pays their commissions. This is the case since they must be able to precisely identify the risks of their clients and nopt their firms. Therefore, the profitability and integrity of their firm depends upon their handling of client needs and not necessarily their firms. The roles that insurance brokers play vary from firm to firm. In the case of large insurance firms who provide services to major clients, career development is mainly focused on financial spots. In the commercialized side of the insurance industry, career developments can also include those in areas of client development and even marketing.
This means that insurance brokers can specialize in core areas. This most is evident in larger companies. On the other hand, insurance brokers employed in smaller companies tend to be involved in most functions, performing tasks of placing brokers, insurance account executive and technical broker. The client-colleague liaison often involves:
- client communication regarding requirements and technical staff
- identification and comprehension of the individual needs of the clients
- understanding clearly the business and risk profiles of clients
- development of a relationship with clients, which allows for the prompt response to requests of the clients
- discussion of future insurance needs with clients as well as maintaining business contact
- liaison with professional staff including photographers, surveyors and structural engineers
- organize and attend meetings
- representing clients in negotiation with insurers
- premiums collection
- develop new business
- market brokerage services
Knowledge and information management is also important in an insurance broker’s job. This is the case since ensuring that work requests are carried out promptly in order to keep up with the demands of the clients. Therefore, it is essential that detailed records be kept for analyzing and collating numerous information. The information that were collated and analyzed will be the ones sent to underwriters for preparing reports and presentations. This means that it is crucial for insurance brokers to keep up to date with paper works as well as correspondence. New industry tends and developments play an important role in the analysis of information pertaining to the risks involved in company operations. As such, insurance brokers must continuously study the developments that occur within their industries to ensure that their recommendations will still be able to resolve the changing problems of companies. Therefore, undertaking researches regarding the availability of insurance policies and products is vital.
The outline of the job description of insurance brokers brings about the requirements the employers look for when filing a post. Ensuring that candidates for employment posses the traits needed to be successful insurance brokers will be crucial in selecting the best possible employee. In the preceding sections of this paper, the requirements of most companies looking for insurance brokers will be presented. This presentation will serve as the platform in launching the discussion of the entry requirements and recruitment process within the insurance industry. A case study will also be presented to show how the people are able to meet the requirements and thus get the job as insurance brokers.
Being an insurance broker is open to all graduates. However, applicants with a degree in the following have more chances of getting short-listed – accounting, finance, business management, mathematics, statistics, economics and businesses with languages. Theoretically, being an insurance broker is open to all Diplomates. However, companies, especially larger ones, tend not to hire applicants who are not Higher National Diploma holders. Nevertheless, applicants without HND still have the chance to enter the insurance industry. In case like this, applicants can start off at junior or administrative level. In this entry method, the employees would have to make it up the corporate ladder. Entering the insurance industry without a HND will give the employee the needed training to face the demands of being an insurance broker. In addition, a higher degree in risk management will give an applicant the advantage needed over others. In the same light, pre-entry experience is not a requirement but experiences in banking and insurance sales can come in handy during training and actual performances.
Usually, employers are looking for the combination of qualities that they believe will help candidates in actually performing well in their jobs. These qualities include strong interpersonal skills as well as communication skills. These are needed since insurance brokers are expected to develop and maintain relationships with their clients. It is also the case that they would have to gather information about the companies and pass them on to underwriter. Strong communication skills are needed to ensure the fluidity of information transfer from one medium to another.
Confidence is also important if the tasks mentioned earlier are to be performed with the best possible results. Negotiation skills are also important since they will be dealing with various people who are driven by different motivations. As such, they as insurance brokers must find the middle ground where all of the parties involved will be willing to compromise. In addition, a person’s ability to manage numerous projects at the same time will give the employer the impression that the applicant will be able to handle different projects at the same and thus give the insurance company the ability to handle as many cases as possible.
Other important personal qualities that employers are looking for in an insurance broker are good utilization of analytical skills, understanding of legal issues, integrity and attention to details. All of these qualities are important since they ensure that insurance brokers will not make wrong interpretations of data needed to make the best possible recommendations regarding insurance policies and products. Otherwise, more risks can develop instead of helping wipe them out.
In order to maximize the potentials of new hires, insurance companies hold trainings. Different areas are included in the training schemes. This allows new hire especially fresh graduates to experience works in different areas for a period of eighteen months to two years. In addition, training covers technical aspects of broking, management development and other general skills.
The process of recruitment starts with examinations. During this time, applicants study for the Chartered Insurance Institute examination, which is a structured qualification examination that aims to meet the needs of insurance professionals. Applicants who take the Chartered Insurance Institute examination have the chance of being awarded various recognitions ranging from Award in Insurance to Diploma in Insurance.
The latter is awarded to practitioners who are able to exhibit professional qualifications. In turn, Advanced Diploma could lead to Associate membership in Chartered Insurance Institute, which is open to all who are able to obtain A-level education or above. It takes two to three year to obtain Associate membership.
Nowadays, an associate membership to Chartered Insurance Institute is being seen as an essential rather than a luxury. This is the case since associate membership status ensures that they will be recognized in a professional status. In addition, appropriate qualifications are needed to continue professional development, which is stated in the regulations of the Financial Services Authority. This is the reason why, new entrants to the insurance industry are encouraged to take the examination despite the difficulty of juggling work and studies.
Case Studies
Insurance Broker Trainee
The insurance broker in training graduated from a reputable university with a degree in accounting. He started his career with a popular bank. This was in relation to his plan of gaining experience and being able to apply the theories that he learned into practice. After two years, he decided that it was time to further his experience in the industry and thus he started to look for a job that would better suit his career interests. Not long after, he secured a position with another company that offered training scheme. The training scheme of the new company included risks management, reinsurance, special risks and programs and facilities. Aside form the training scheme being offered by the new company, the trainee also took up courses on soft skills and theoretical background.
Due to the various exposures to the theories involved in the insurance industry, the trainee was able to apply different approached to the insurance needs of their clients. This allowed him to better understand the theories since he knows how they actually work in real life situations. As such, the simultaneous education and practice being undertaken by the trainee prepared him for the Chartered Insurance Institute examination. In addition, it paved the way for the trainee to develop further his communication and interpersonal skills. As a result, the trainee was able to perform his duties more efficiently. With this, he concluded that he must continue on developing his skills and gain more experiences to further his career growth.
Conclusion
The case study presented above as well as the entry requirements and recruitment shows that insurance brokers must be versatile and trainable if they want to succeed in the insurance industry. The combination of the right and appropriate characteristics will allows an applicant to show employers that he or she will be able to complete the tasks presented with efficiency and thus satisfy the needs of the clients.
Even the regulations of the financial services authority support the need for continuous education among insurance professionals. This means that entrant to the insurance industry must be able to recognize the importance and the role that education play in professional or career development within the insurance industry. Doing so will allow insurance brokers to prioritize their actions and as such they will be able to device programs that will help them to juggle everyday work and studies.
In any job, it is important to take note of the lessons that experiences teach. This will ensure that the same mistakes will not be repeated and as such, essential time and resources will be saved. Career development within the insurance industry is also dependent on the ability of employees to learn new things. However, it must not stop with acquiring theories. Success lays at being able to apply theories into practice.
Reference
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