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Reinsurance Jobs - What Are The Requirements For A Successful Career?

By Edited Jan 16, 2014 0 0

Reinsurance jobs are an important cog in the the world of insurance.  They provide financial stability for insurance companies, and as a result, the insured.  The skill sets, job responsibilities, and education for a successful career in the reinsurance field are similar to the job requirements of many analytical jobs.  One of the good things about working in a risk assessment job is that it can be a smooth transition to other areas of analyzing risk.  In addition, insurance is a career choice that can provide job security.  There will always be a need to transition the risk of loss to another party in exchange for a fee.  And as long as insurance and large losses exist, reinsurance jobs will be in demand.

What Is Reinsurance?

Of course, before you begin a career in reinsurance, it is important to know just what reinsurance is.  Reinsurance is a way for insurance companies to pass off the risk of large losses to another insurance company.  For instance, take an individual medical insurance policy.  The insured individual pays a premium, and the insurance company pays the medical claims.  The insurance company aims to  underwrite the policy so that the premiums they bring in are greater than the claims they bring in plus operating costs plus profit.  In general, standard underwriting principals allow this to happen most of the time.

However, what happens when an insured individual experiences a very large loss?  Large losses by nature are unpredictable.  Unpredictability is not a good thing for underwriters, so insurance companies try to find a way to make the cost of large claims more predictable and less risky.  They do this through the concept of reinsurance.  Instead of risking the unpredictability of large claims, they pay a premium to another insurance company, who in turn pays the claims.

Reinsurance Jobs Are A Unique Way To Evaluate Insurance Needs

Take a medical policy for instance.  Many times the original insurance company will pay up to a certain amount, say $75,000, for an individual's claims, but they will then pay a premium to another insurance company who will pay for all claims over $75,000.  This provides the first insurance company with more financial stability since they do not have any risk for claims over $75,000.  They just pay a fixed cost which they know about ahead of time.

While this provides stability to the first insurance company, the reinsurer is now at risk for those large claims.  To avoid paying out more claims than what is being brought in through reinsurance premiums, careful analysis of the insured policies and economic conditions must be made.  There is certainly a science to these estimations, but being successful in a reinsurance job also is an art that can only be gained through experience.

In some cases, especially group medical insurance, reinsurance is called stop loss insurance.  Smaller self-funded employers are the primary consumer of stop loss insurance since they are at greater financial risk of a large claim than a very large employer.

What Type of Education is Needed for a Reinsurance Job?

While someone can learn on the fly about how to be good at a career in reinsurance, it certainly helps to have an education in business, math, and statistics.  Many reinsurance professionals have a background in actuarial sciences.  Being a full blown actuary is not needed, but there are plenty of actuaries in all insurance disciplines.  A bachelor's degree is usually needed, but not always a necessity.  It depends on the job responsibilities and the company that is doing the hiring. 

The Skill Sets Needed for a Reinsurance Position

The skill sets needed for reinsurance jobs are similar to that of all analytical insurance positions.  First of all, a knowledge of programs such as Excel and Access are a necessity.  You do not need to be an expert at first, but these programs shouldn't be completely foreign.  As long as you can make your way around at first, you will eventually learn all you need to know on the job.  Just make sure you are always trying to learn how to be faster with these programs, as it is easy to fall behind simply because you are too slow on the computer.

In addition to being good and having an educational background in business, math, and statistics, you also must enjoy these fields.  Your career is going to be spent analyzing numbers, and you will not want to spend all day wishing you were outside coaching football or something.  Having said that, if you enjoy the insurance field, but do not want to be in front of a computer all day, you could try to get into sales.  Insurance salesmen usually dress better and drive nicer cars anyway.

It also helps to be a good team member if you work in reinsurance.  Selling an insurance product takes many different people and departments, and all it takes is one person to drop the ball for a policy to not be sold.

So if you like math, stats, and business, are good with databases, and can successfully work in teams, then a reinsurance job may be a good fit for you.

Where to Find Reinsurance Jobs

Reinsurance jobs can be found at many different insurance companies.  Some reinsurance companies specialize in insuring other insurance companies, and sometimes a well known insurance company has a reinsurance department. 

A lot of insurance jobs require a start at the bottom so that the business can be learned.  There are a lot of financial transactions that take place at an insurance company, so the most important functions are left up to the employees with the most knowledge and experience.  Usually these are the actuaries, but senior underwriters are also a very important piece of the reinsurance puzzle. 

If a career in insurance is something that you are considering, reinsurance is a good place to start looking.  There are some professions that will always be in demand.  Doctors and lawyers come to mind.  But as long as people and things get sick, stolen, and damaged there will be a need for insurance, and the insurance profession cannot work as efficiently without reinsurance jobs.

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