Insurance broker
An insurance broker acts as an intermediary between clients and insurance companies. Clients may be either individuals or commercial businesses and organisations.
Brokers use their in-depth knowledge of risks and the insurance market to find and arrange suitable insurance policies. Insurance brokers, unlike tied agents, are independent and offer products from more than one insurer to ensure that their clients get the best deal.
Insurance policies range from motor and house insurance to public, employer or product liability insurance, which pays compensation on the basis of the assessment of legal liability for damage, injury or harm.
Typical work activities depend largely on the size and nature of the employer and the scale of the business. In a large company, a broker may specialise in a core area; in a small firm, a broker could be involved in most functions, including new business development and acting as placing broker and claims broker.
Tasks typically involve:
This area of work is open to all graduates, although a degree in the following subjects may increase your chances:
Theoretically, this area of work is also open to all diplomates although, in reality, large companies tend not to accept HND/foundation degree holders onto their graduate training schemes. Entry without a degree is also possible, in which case the entry-level post would be as a trainee insurance technician or junior/administrative level with progression to broker after gaining experience and insurance industry qualifications.
Although not essential, a postgraduate degree in risk management or other insurance/finance-related subject may be an advantage.
Skills and personal qualities are seen to be as important as qualifications and experience for this area of work. Candidates need to show evidence of the following:
Work experience in customer services in the financial services sector is advantageous although not always essential. Sales experience may also be useful.
Opportunities within insurance broking occur mainly with national brokers who offer structured training schemes. These are very competitive and usually a 2:1 or above is required, although some companies will accept a 2:2.
The insurance sector is significantly affected by the economic climate but generally has more stability than the financial markets. There will always be a need for insurance, so it is usually a secure industry for those who are successful.
For more information, see work experience and internships and search courses and research.
Training may be offered through structured graduate training schemes at large firms of brokers or through schemes such as the CII Broker Academy run by the Chartered Insurance Institute (CII) . The British Insurance Brokers' Association (BIBA) also offers support for those new to the sector.
Many structured training schemes provided by large firms of brokers give new graduates experience of different areas of work over a period of 18 months to 3 years. This generally includes attachments to a variety of departments. Training will usually include courses to cover the technical aspects of broking.
Brokers who deal with life assurance or pensions (long-term investment insurance) need a qualification in insurance or financial advice, or a combination of both, approved by the Financial Services Authority (FSA) . Some employers refer to this as Competent Adviser Status (CAS).
Most new entrants study for the CII examinations, which provide a structured competence framework for the sector to meet the needs of insurance professionals. On the CII website, see information on the CII Broker Academy . This provides a defined career structure from trainee upwards.
The trainee-level qualification is the CII's Certificate in Insurance. After one to two years' experience, certificate holders can take the CII Diploma in Insurance. At this stage an individual would be a certified broker. After two to five years' experience, a broker can take the Advanced Diploma in Insurance (also know by the letters ACII) and become a professional broker.
After five years' industry experience, chartered status becomes available. Those holding degrees in areas such as business, economics, finance and law can receive credits at diploma and advanced diploma level. Study time may be granted to support this training.
Only those who qualify with the CII are allowed to use the title of Chartered Insurance Broker; CII qualifications are now seen as essential rather than optional to ensure recognised professional status. The development of regulation under the Financial Services Authority (FSA) has also increased the importance of appropriate qualifications and continuing professional development (CPD).
The BIBA also offers training to ensure that all brokers have up-to-date knowledge and are continually improving their skills. New entrants to the profession may be advised to undertake both CII and BIBA training.
It is common for brokers to undergo general training and gain a few years' general experience before moving into a specialist sector, management roles or other functions within the industry.
The introduction of the competence framework by the Chartered Insurance Institute (CII) means there is a clear career route within the profession and the ability to move into other areas of insurance quite freely.
Specialist roles include:
In smaller firms, brokers may undertake many of these roles as part of their job. In larger firms, these may be very separate roles, only reached through promotion.
It is also common for brokers to specialise in one area of insurance, such as risk management, assessment, marine, household or motor. They may work in specialist departments in large companies or for small specialist firms.
Progression into management is also possible, managing a team of brokers or several branches of a broking firm.
Recent mergers between large broking firms have made the profession very competitive and have, in turn, affected the career progression available. The market is also becoming more international, and good language skills, as well as openness to geographic mobility, may open up a wider range of opportunities for career progression and promotion.
The majority of insurance brokers are employed by insurance broking firms, which range from small niche firms to large multinational firms.
The UK's insurance market is the largest in Europe and second largest in the world employing over 300,000 people - almost a third of all financial services jobs.
Of the 972 authorised insurance businesses in the UK, 735 are for general business only (e.g. motor, household and commercial insurance), 193 are for long-term business only (e.g. life insurance and pensions) and 44 for both (source: UK Insurance - Key Facts, 2009, published by Association of British Insurers (ABI) ). Therefore, a wide number of firms offer opportunities for employment.
Many brokers work for Lloyd's of London , a market consisting of individuals and corporate groups acting in a syndicate to provide insurance cover. Brokers and firms of brokers can become approved and authorised to place business in the Lloyd’s market. Most of the larger brokers in London are, indeed, Lloyd's brokers.
The largest insurance brokerages in the world are Marsh and McLennan, Aon and Willis Group.
Other potential employers include insurance companies and the insurance risk management departments of non-insurance companies. Companies such as Talent&Pro operate like a junior management consultancy employing recent graduates and guiding them through their Chartered Insurance Institute (CII) exams while they work on projects within a range of companies.
Recruitment agencies commonly handle vacancies. Some of the specialist agencies are:
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