Insurance Education: Although a college degree is not strictly required for employment in insurance, it is preferred by many companies and is essential for promotion to positions of greater responsibility. Over seventy-five colleges and universities offer undergraduate degree programs in insurance. Actuaries usually have a math or statistics major with some business courses and good writing skills. A few colleges offer programs in actuarial science. Claims adjusters, underwriters, brokers, and agents usually have bachelor's degrees in business administration and preferably have majors in insurance. Courses in economics, accounting, and business law are helpful. Depending on the type of insurance company, additional preparation might include knowledge of auto repair, medical knowledge, and so on. In commercial insurance, underwriters are almost always expected to have some business experience.
Risk management is an area not to overlook when examining insurance careers. Many universities offer a risk management major at undergraduate and sometimes graduate levels. Many organizations offer internships to risk management students both inside and outside the insurance industry. A student might land an internship with a large corporation, a group of risk management consultants, the government, or an insurance company, all of which are promising employers after graduation.
Licensing: Claims adjusters must be licensed in a majority of states, and all agents and most brokers must be state-licensed. Most states require applicants for licenses to pass written exams on insurance fundamentals and state insurance laws.
Training: Many insurance companies will pay all or part of tuition costs for additional education. Most large companies have excellent on-the-job training programs. Training might include rotation among various departments enabling new employees to get an overall look at the company and to choose an area in which to work. It is very important to determine what educational and training opportunities a company offers before accepting employment.
Testing: Successful claims adjusters and agents must like dealing with people, be outgoing, enjoy travel and variety, and be well-organized and independent. Aptitude tests are used throughout the insurance industry. If you are considering an actuarial career, you might want to take the Actuarial Aptitude Test. Inquire about it at your college counseling center or write:
Society of Actuaries, Schaumburg, IL 60173-2226
The Aptitude Index Battery (AIB) and the Inventory of Insurance Selling Potential are used in the selection of agents. To inquire about these aptitude tests write:
Life Insurance Marketing and Research Association International Hartford, CT 06141
Real Estate Education: Over 1,000 universities and community colleges offer courses in real estate. Some offer associate, bachelor, and even graduate degrees with a major in real estate. A background in finance, economics, and psychology is good preparation for a career in real estate. Among real estate professionals, the majority has had some college education and many hold bachelor's degrees, though this is not usually a requirement. Local real estate associations that are members of the National Association of Realtors sponsor courses in real estate fundamentals, legal issues, appraisal, mortgage financing, property development, property management, and other real estate topics.
Licensing: Many firms and real estate boards offer formal training for agents and brokers as preparation for obtaining a state license. Licensing requirements vary from state to state, but all states require prospective agents and brokers to pass written exams covering the fundamentals of real estate transactions and state laws affecting the sale of real estate. The real estate boards located in the state capitals can provide you with licensing information for the particular state in which you choose to work.
Personal attributes: Many studies have been conducted to attempt to pinpoint the qualities needed for success. Findings show that successful real estate pros are:
- better able to work alone
- emotionally stable
- tolerant of stress
- full of drive and energy
- trusting of people
- persuasive
A premium is placed on experience in the insurance industry. Some generalizations can be made about the insurance industry relative to salaries. Generally, the larger the company, the higher is the salary. Also, specialists in one area of insurance tend to make higher salaries than do generalists. Executives employed by large, nationwide companies with tremendous resources, many agents, and vast portfolios of holdings offer top dollar to key executives. Small companies offer much less. Movement from small companies after experience has been acquired is very common. The higher up on the organizational chart, normally the higher the salary, with the exception of sales.
Successful sales agents can earn more than top company executives. It is difficult to talk about salaries of brokers and agents because they work primarily on a commission basis. Salary is contingent upon the size of the commission, which is determined by such things as the type of insurance, the amount sold, and whether the policy is a new one or a renewal. Beginners often receive a minimum salary or advances on their commissions. Usually agents pay their own expenses, including automobile and travel. For those who own agencies, expenses such as office rent, utilities, and clerical wages must be paid. Even so, owners of independent agencies stand to make huge profits if they are successful.
The insurance industry is a competitive field for beginners, and many who attempt insurance sales eventually leave the field. The agent must have a great deal of initiative and self-confidence to make it. The high potential of large monetary rewards and the great independence of the job provide the incentives for many to give it a try. The Million Dollar Round Table is a prestigious association honoring members who sell $1 million of life insurance in a year, and many do.
Real estate is a unique industry in that titles are relatively unimportant. Status is governed primarily by the amount of sales. There is also a Million Dollar Round Table in real estate sales. It is hard to evaluate sales effectiveness because many agents work part time. To give a rough idea, over 500,000 Americans are actively involved in selling residential real estate. Most sell only four or five houses a year.
Brokers pay salespersons a percentage of the selling price and keep a percentage. A salesperson may earn 6 to 10 percent of the selling price of a property. Therefore, the greater the cost of the property, the more commission agents and brokers earn. Recessions pose risks to the financial rewards and career development of real estate professionals. When housing starts are down, sales are affected. Although there are some large national real estate firms, the majority of firms in the real estate industry are small local firms that face the risk of going under during recessionary periods.
Real estate appraisers who are tested and certified can earn between $35,000 and $60,000 a year working for private firms. Their code of ethics prohibits them from accepting any commissions. Property managers usually are paid a percentage of the rents that they collect, although they may also receive shares or an interest in the investment. Apartment managers in residence may receive a rent-free apartment as part or all of their compensation. On average, property managers earn about $25,000. The top 10 percent earn over $50,000.
Sources of Additional Information
There are numerous sources to which you can write for additional information on careers in insurance and real estate. Some of these sources are listed.
For information on careers in insurance, write:
American Society of CLU and CHFC Bryn Mawr, PA 19010
Association for Advanced Life Underwriting Washington, DC 20006
Casualty Actuarial Society Arlington, VA 22201
Independent Insurance Agents of America Alexandria, VA 22314
Insurance Information Institute New York, NY 10038
Life Insurance Marketing and Research Association International Hartford, CT 06141
Million Dollar Round Table IL 60068
National Association of Independent Insurers Public Relations Department IL 60018
National Association of Insurance Women International Tulsa, OK 74159
National Association of Life Underwriters Washington, DC 20006-4387
Society of Actuaries Schaumburg, IL 60173-2226
Society of Chartered Property and Casualty Underwriters Malvern, PA 19355
For information on real estate careers plus a list of universities, colleges, and junior colleges offering courses in real estate on campus; a list of state universities offering correspondence courses in real estate; and a list of names and addresses of real estate licensing officials in each state, write to:
National Association of Real Estate Brokers Washington, DC 20006
National Association of Realtors Chicago, IL 60611
