Fire, Marine, and Casualty Insurance

SIC 6331

Companies in this industry

Industry report:

This classification covers establishments primarily engaged in underwriting fire, marine, and casualty insurance. These establishments are operated by enterprises that may be owned by stockholders, policyholders, or other carriers.

Industry Snapshot

The 2000s were a roller coaster of profits and losses for the fire, marine, and casualty insurance industry. Soft market conditions, in which premium rates are stable or falling and insurance is readily available, were followed by periods of hard market conditions, where rates rise, coverage is more difficult to find, and insurers' profits increase.

The terrorist attacks of September 11, 2001, resulted in the largest single-event payout in history. By the mid-2000s the economy had stabilized, and the industry returned to profitability. Despite four hurricanes in the third quarter of 2004, the industry that year reported the first underwriting profit in 26 years. However, in the first quarter of 2005, eight catastrophic events led to property and casualty insurance payouts of $2.1 billion, the second-costliest quarter since the first quarter of 1996, which had payouts totaling $2.6 billion. The second half of 2005 brought a string of hurricanes that hit the Gulf Coast and amounted to more than $100 billion in damages overall, wreaking havoc in the property/casualty insurance industry.

Premiums subsequently escalated dramatically in the following two years, and losses from catastrophes declined at the same time, leading to huge profits in 2006 and 2007. However, profits were down again in 2008, when 37 catastrophes, including Hurricane Ike, created losses totaling $27 billion. By 2009 the industry had recovered, helped by losses reaching only $10.6 billion.

Organization and Structure

The fire, marine, and casualty insurance industry, commonly known as the property/casualty industry, is part of the larger primary insurance industry, which also encompasses life and health insurance. In addition to these three types of primary insurance, the reinsurance industry serves life, health, and property/casualty companies. Some companies participate in more than one primary industry segment.

Companies within the property/casualty industry provide financial protection for businesses, individuals, and other entities against property loss or losses by third parties for which the insured is liable. The two major segments of the industry are business and personal insurance, each of which accounts for almost 50 percent of the total dollar amount of property/casualty insurance premiums written.

Within all segments of the property/casualty industry, several types of insurance are available. Although most property/casualty insurance traditionally is written to cover homes, automobiles, and other property, other types of coverage include workers' compensation, product liability, and medical malpractice. Commercial lines, which includes general liability, medical malpractice, workers' compensation, and allied lines, accounted for approximately 52 percent of the industry's premiums in the mid-2000s. Personal lines accounted for the remaining 48 percent, with auto insurance totaling 34 percent of the industry's premiums and homeowners' insurance accounting for 11 percent of premiums.

The entire insurance industry, including life, health, and property/casualty, is made up of four functional groups: insurers, who carry the risk of their clients; field organizations, which provide client services such as settling claims and writing insurance; intercompany associations or bureaus that, among other things, establish standards of practice, influence legislation, and determine rates; and associations of agents and brokers that promote the interests of the field organizations.

Financial Structure.
Insurance companies generate profits by selling, or underwriting, policies to customers and then investing those revenues in income producing assets. Therefore, insurers may derive revenues, or losses, from collecting premiums on insurance as well as from investment income. Insurers are in the precarious position of selling products and services before they are sure how much these products and services will cost to provide.

One factor distinguishing the property/casualty industry from other primary insurance industries is the nature of its investment activities. Future liabilities tend to be short term and are much less predictable compared to the life and health insurance industries. In addition, most property/casualty policy claims are settled quickly, so insurers must invest predominantly in assets that can be quickly converted to cash. Stocks and bonds typically constituted almost 70 percent of property/casualty industry assets in the mid-2000s.

Background and Development

The concept of insurance developed in response to society's desire to spread the consequences of a loss that would normally fall upon a single individual over the members of a large group exposed to the same hazard. Through a system of equitable contributions, members of a large group can reduce the risk of disastrous personal loss. The result is an atmosphere of certainty, rather than uncertainty, regarding accidental or disastrous occurrences.

One widely cited definition of insurance emanated from a court case in Great Britain in 1806 which stated, "Insurance is a contract by which the one party, in consideration of a price paid to him adequate to the risk, becomes security to the other that he shall not suffer loss, damage, or prejudice by the happening of the perils specified to certain things which may be exposed to them."

Insurance companies concern themselves only with pure risk, which involves only the negative possibility of loss. Conversely, insurers must avoid insuring business risk, or speculative risk, which involves the chance of loss as well as gain. In addition, the clients insured by companies must stand to lose by the occurrence of the event contemplated, or the arrangement would amount to little more than a wager and would be unenforceable or illegal.

Other conditions that must be met in order for a group to be insured against an event are the insurer being able to quantify the risk of the event occurring, persons exposed to the risk feeling a sense of responsibility for the loss, the ability of the insurer to shoulder the burden of loss, and the events involved being purely subject to chance.

Property/casualty insurance is limited to loss or destruction of property by fire, windstorm, hazards of the sea, earthquake, water leakage, explosion, riot and civil commotion, vandalism, theft, forgery, and vehicle collision. In addition, loss of property can result from liabilities related to compensation of injured workers, property damage caused to others, and negligence concerning the use of personal property.

Organized systems of fire, casualty, and marine insurance have existed since at least the fifteenth century when a marine insurance industry emerged to serve Italian traders. The industry did not develop into a form resembling what exists today until the seventeenth century in England, following The Great Fire of London in 1666. This event prompted the development of a sophisticated fire insurance industry, which helped to lay the groundwork for the gradual development of a broader property/casualty industry. Rapid industrialization in the western world during the nineteenth and twentieth centuries sped the industry's development, as a decrease in individual independence magnified the benefits of insurance.

In the United States, the hazards of wind, water, damage, and explosion were added to the established lines of fire insurance until the early twentieth century. Other forms of insurance followed, such as personal accident, which covers costs related to illness and accident; liability; and workers' compensation insurance. A turning point occurred in the U.S. property/casualty industry in 1948, when states began allowing insurance companies to write policies on several lines of insurance, rather than limiting companies to just one segment of the market. This practice, called multiple-line underwriting, had long been in practice in the rest of the world. Significant trends shaping the industry in the 1990s included an increased emphasis on computers and automation in virtually all aspects of the market and the continued globalization of the industry. The trend continued into the late 1990s.

Regulation and Legislation.
One aspect of the U.S. property/casualty industry that separates it from insurance industries in most other countries, aside from its sheer size, is its detailed system of government regulation. Until the 1940s, regulation was the exclusive province of state and local governments. However, in 1944 the Supreme Court, in United States v South-Eastern Underwriters Association, ruled that insurance is commerce that is conducted between state lines. By redefining its scope, the Court made the entire insurance industry subject to the powers of Congress under the Commerce clause of the Constitution. Congress gave states until 1948 to revise their regulatory structures to meet certain standards laid down by the act. State revisions enacted during that time were sufficient to preclude excessive federal intervention. However, events in the early 1990s again threatened the authority of states to regulate the industry, and increased federal regulatory action seemed likely.

Another legislative event with a significant impact on the industry was California's Proposition 103, legislation which California residents voted to enact in 1989. The proposition required property/casualty insurers to reduce, or rollback, automobile insurance rates by 20 percent. Enforcement of the proposition was postponed until 1992. This legislation reflected growing consumer discontent with escalating insurance costs nationwide and provided a testing ground for states considering similar legislation. Many insurers responded by reducing, or discontinuing, business in California.

Record losses from catastrophes, a lack of good investment alternatives, and a sluggish economy were the three predominant factors that converged to make 1992 a historically dismal year for the property/casualty industry. Small improvements over 1991 in the dollar value of premiums written, combined with capital gains realized from the sale of assets, were the only factors that kept earnings positive for that year.

By the mid-1990s, federal regulators argued that the state regulatory system was inefficient and had contributed to the financial instability of the industry. By requiring more stringent regulations concerning financial health, federal regulators hoped to strengthen the fiscal soundness of the industry and force companies to operate responsibly.

In the late 1990s, the minimum workers' compensation rate law was repealed, commercial lines were deregulated, and there was a move to repeal the Glass-Steagall Act. In addition, in 1999, the Occupational Safety and Health Administration (OSHA) proposed regulations to protect workers suffering from musculoskeletal problems. The agency proposed ergonomic standards that had insurers and businesses up in arms. The insurance industry stated that it did not oppose worker safety, but felt the OSHA proposals discouraged worker/employer relations in discussing workplace safety, proposed coercive regulations without thought to employer motivation, and added significant costs with provable benefits.

Competitive Structure.
Although industry growth stagnated from 1989 through the early 1990s, the number of U.S. property/casualty insurers jumped 34 percent between 1979 and 1988. Of the nearly 20,000 companies that constituted the industry by 1994, 85 had 1,000 or more employees, and 275 had between 250 and 500 employees. Employment decreased in the early 1990s as insurers streamlined operations and then dropped to 545,400 in 1993. Employment was up again in 1994 to 610,368.

Advertising and customer service are also important elements of competition within the industry, since the industry is characterized by relatively homogeneous products that are difficult to differentiate from company to company.

Catastrophes were the single greatest hardship for the industry in the early 1990s, resulting in more than $22 billion in combined losses. Of all the catastrophes during 1992, Hurricane Andrew was the most expensive. Its damage in Florida and Louisiana in August 1992 racked up record claims topping $15 billion for the industry. Less than one month after Andrew, Hurricane Iniki blasted the Hawaiian Islands, wreaking an additional $2 billion in destruction. In addition, tornadoes ripped through the South and Southwest that same year, causing $130 million in damage, and the Chicago floods added another $300 million in claims. A few months after the Chicago floods, riots in Los Angeles amounted to $750 million in damage. In early 1993, a heavy snowstorm on the East Coast dealt a $1 billion blow to property/casualty insurers. These catastrophes contributed to a staggering loss in underwriting income of over $34 billion in 1992, compared to the past record high loss of $25 billion in 1985. In comparison, underwriting losses from 1989 to 1991, which were also burdened by exorbitant catastrophic claims, averaged about $20 billion.

Catastrophes, especially hurricanes in the Atlantic, mounted in the first half of 1998, making it the fifth-worst year for claims since 1950. In 1998, the industry's policyholder surplus rose only 7.5 percent, compared to a rise of 22.2 percent in 1997. The catastrophic losses totaled $10 billion for the year, compared to only $2.6 billion in 1997. The losses, combined with reduced investment yields and year-to-year capital gains, accounted for this decline.

Investment and the Economy.
A second factor contributing to financial stress within the industry during the early 1990s was excess capital and comparatively poor investment opportunities in the sluggish economy. Property/casualty insurers began to rely increasingly on investment income to shore up their earnings in the 1980s. However, low interest rates and limited investment returns began to limit this source of revenue by the early 1990s. By liquidating $9 billion in assets to realize capital gains, insurers were able to boost their income in 1992, but at the expense of weakening the economic strength of the industry.

A third problem for insurers in the early 1990s was the sluggish economy. The dollar amount of premiums written increased just 3 percent in 1992, which was well below the 6 percent growth rate which some analysts had predicted, but slightly greater than the growth in 1991. Limited growth in premium rates, partly due to regulatory rate suppression, compounded financial difficulties for insurers.

Global Expansion.
During 1992, more than $276 billion, or 43 percent, of the $649 billion in non-life insurance premiums in the world were written in the United States. From the viewpoint of United States insurers, global expansion has two sides--U.S. expansion and investment abroad and foreign expansion and investment in the United States. U.S. insurers were becoming increasingly active in foreign expansion either through cross-border trade, in which foreign customers are covered by a company in the United States, or subsidiaries, which are located in the country where the customer is located. Sales by U.S.-owned insurance companies in other countries topped $36 billion in 1991, mostly from non-life insurance operations including income from investments.

Regulatory developments in the European Union (EU) liberalized markets for insurance and offered new opportunities for U.S. property/casualty insurers in the 1990s. These developments include countries that opened their insurance markets to foreign investment for the first time, EU efforts to standardize accounting and reporting practices, and EU directives that made it easier for companies to transact business across country borders. Several EU countries, especially in southern Europe, opened this insurance sector to foreign investment.

New opportunities also existed in Latin America and Asia. Latin governments deregulated the insurance industry and allowed foreign investment for the first time. The North American Free Trade Agreement (NAFTA) opened the small Mexican property/casualty market, allowing U.S. insurers to operate equally with Mexican insurers. Asian countries offered an even larger potential for U.S. expansion abroad as incomes in this region continued to grow. Taiwan and Korea continued to be particularly attractive to U.S. insurers.

The most recent opportunity existed in the People's Republic of China, where in 1995 a national insurance law was enacted. For 30 years after the founding of the present republic, the country had only one insurer, the state-owned People's Insurance Company of China. Few Chinese had insurance, but in an era of increasing opportunity and risk, more than 100 million took out property coverage in 1995. Competition is slowly growing, and foreign insurance firms are seeing a potentially lucrative market. Since 1992, China has only permitted two foreign firms, one of them the American International Group (AIG), licenses to sell insurance, first in Shanghai and then in Guangzhou. While it waited for a license, the U.S. firm Chubb Insurance committed $1 million during the latter half of the 1990s to set up a school in Shanghai to train regulators and agents. China's entrance to the World Trade Organization at the turn of the century was expected to give U.S. firms further access to this growth market.

Workers' compensation insurance was the second-largest segment of the individual market in the mid-1990s. A study released in early 1996 stated that insurers paid out $16 billion in asbestos losses alone between 1993 and 1995. Premiums for workers' compensation dropped 5 percent to $29.7 billion and accounted for just 13 percent of the property/casualty premiums written in 1992. Furthermore, fire and marine insurance combined represented less than 7 percent of all premiums written for individuals during that same year.

Besides catastrophes, a sluggish economy, and low interest rates, the property/casualty industry continued to suffer from a relatively high rate of company insolvency. Between 1984 and 1992, more than 370 companies failed, compared to a total of 141 in the 15 years prior to 1984. Most of these insolvencies involved smaller companies, but despite the 1992 catastrophes, there were only nine insolvencies during the first half of 1993.

Although the root cause of many failures was mismanagement or fraud, a more aggressive regulatory environment resulted in a greater number of company failures than would have otherwise occurred. In addition, Hurricane Andrew was a major cause of at least nine of the failures. Some industry observers believe that the number of insolvent companies peaked in 1990 and may have decreased since that time. Nevertheless, insolvency was a major contributing factor to the increase in federal and state industry regulation.

Democratic congressman from Michigan John Dingell addressed the regulators' interests when he introduced a controversial bill in April 1992. The Dingell Bill was designed to enforce uniform capital requirements for insurers. Industry reactions were mixed, and many industry leaders opposed the bill. In response to federal regulatory attempts such as the Dingell Bill, the NAIC tried to strengthen state requirements and avoid increased federal entanglement in the industry. Pressures to increase federal regulation mounted in 1992 when there were congressional efforts to reform the McCarran-Ferguson Act, which exempted insurers from federal antitrust laws. Reform of this act meant the loss of an important defense for insurers against federal involvement in the regulatory process.

Increased Competition.
The second significant long-term challenge for industry participants in the late 1990s was increased competition. This challenge meant a reduction in the workforce and consolidation by merger and acquisition for many property/casualty companies. In 1997, the Providian Corporation announced that its shareholders approved the merger of the company's insurance operations with AEGON USA, a subsidiary of Netherlands based AEGON, NV, one of the largest listed insurance organizations worldwide.

Insurance giant Aetna sold its Casualty and Surety Company to the Travelers Group for $4.1 billion in 1997, creating the largest writer of personal automobile insurance through the independent agency system. Sagging industry profits, foreign expansion into the United States, and market segmentation were a few of the factors driving this trend.

Limiting participation in the industry to specific market segments in which they had expertise was one way companies sought to increase their chances of maintaining profitability in the 1990s. Companies wanting to compete effectively also became more efficient through automation and customer focus. Many companies, especially smaller ones, sought to merge with other companies to strengthen their capital position. In addition, many companies looked at ways to streamline operations and reduce the size of their workforce.

Mergers continued in 1999 as insurance companies looked for ways to diversify and expand their offerings. In mid-1999 Allstate announced it would buy the personal lines from CAN, a transaction worth $1.2 billion. In addition, The Hartford bought Omni to augment its product line and expand its nonstandard auto operations.

September 11, 2001, and Its Aftermath

Throughout the 1990s, the industry was plagued by a decrease in the growth of demand for insurance coverage, as well as a series of catastrophic events, both of which undermined profits. Net income of $36.5 billion declined to $29.9 billion in 1998, $22.5 billion in 1999, and $20.7 billion in 2000. However, this gradual decline paled in comparison to the fallout experienced by the property/casualty industry in 2001. Already struggling with severely reduced investment income due to the economic downturn in the United States, the fire, marine, and casualty insurance industry was hit with extraordinarily high expenses from the September 11 terrorist attacks. As a result, the industry posted its first loss ever of $6.9 billion in 2001, and its net worth that year declined 8.7 percent to $289.6 billion. Although net income had been declining steadily since the late 1990s, the industry had never before experienced such a sharp downturn in a single year.

The economic recession that had been plaguing U.S. insurers in the early 2000s had undercut investment income for property/casualty insurers. In 2001, investment income dropped 8.9 percent to $37.1 billion.

Environmental liability continued to pose a potential major threat to profits in the early 2000s as claims related to asbestos rose. According to the July 2002 issue of Claims, "a surge in annual claim filings and the rescinding of previous settlement agreements between plaintiff attorneys and defendants has changed the asbestos litigation environment, increasing costs to defendants." Mold claims also increased in the early 2000s. Large environmental claims typically are made many years after the cause of the claim occurs, making it difficult for insurers to predict cleanup cost liability. One study estimates that cleaning known hazardous waste sites could cost more than $750 billion over 30 years, excluding litigation costs which could double that figure. Because property/casualty insurers can potentially be stuck with the entire bill, many analysts believe firms need to consider building reserves of assets to address future claims. Some already did this, such as Chubb Co., which upped its reserves by $700 million in 2002 to help offset increased asbestos claims.

During the mid-2000s the property and casualty industry gradually recovered from the first difficult years of the 2000s. By 2003 the economy was recovering and underwriting results improved. In that year P/C insurers reported a net income of $29.9 billion, up 226 percent from the comparatively dismal $9.2 billion in 2002. Catastrophic losses for 2003 totaled $12.9 billion. In 2004, although catastrophic losses jumped to $27.3 billion due to four hurricanes, industry assets increased $1.18 trillion through increased premiums and a higher return on investments.

During 2004 the industry reported a net income on underwriting for the first time in 26 years, meaning more premiums were collected than claims paid out. Usually insurers suffer underwriting losses with outpays higher than premiums collected, but remain profitable nonetheless due to the income from investments.

The future of terrorist risk insurance legislation was of concern in the industry during the mid-2000s. In the wake of September 11, 2001, Congress passed the Terrorist Risk Insurance Act (TRIA), which became law in November 2002. TRIA significantly altered liability and claim issued related to future terrorist attacks by creating a federal backstop for commercial insurance losses, thus limiting the amount of money insurers can lose due to foreign acts of terror. The act also provided a "mandatory offer" clause.

The first quarter of 2005 resulted in the second-highest payouts on record with claims totaling $2.6 billion. Eight catastrophic events generated 535,000 claims from insured in 28 states. Of total claims, 61 percent were personal property, 14 percent commercial property, and 25 percent auto damage. Texas, which experienced a series of strong storms, suffered the most losses during the first quarter of 2005, followed by California, Georgia, and Alabama.

Those losses were just the beginning in 2005. Hurricanes Katrina, Rita, and Wilma swept through the Gulf Coast in the second half of the year. All told, direct losses from catastrophes in 2005 reached $61.9 billion. That caused a $5.6 billion net loss on underwriting in 2005. Still, the industry claimed a net income after taxes of $44.2 billion that year.

Despite forecasts for another difficult hurricane season in 2006, the industry escaped the year essentially unscathed. Along with higher premiums prompted by the catastrophes of 2005, the property/casualty industry ended 2006 with a $31.2 billion net gain on underwriting and a net income after taxes of $63.7 billion. While the year was good for the insurers, the consumers took a hit, particularly businesses in the Gulf Coast. Coverage limits declined and deductibles increased. Business clients in the Gulf Coast area with catastrophic risk exposure had premiums increase by an average of 80 percent between August 2005 and July 2006. As an illustration, one business owner paid $250,000 for $38 million in coverage in 2005, then paid $940,000 for $5 million in coverage in 2006, according to a study from the RAND Corporation.

Elsewhere in the nation, rates dropped significantly through 2007. By early in the year buyers had their primary general liability rates drop as much as 30 percent. Insurers were experiencing the slowest growth in net written premiums since the late 1990s. "It's about as soft a market as you can imagine,' Steven Weisbart, vice president and chief economist for the Insurance Information Institute, told Insurance Journal in December 2007.

Hurricane Ike contributed to a return to hard market conditions in 2008. That storm was only one of a 37 catastrophes recorded that year--the highest for the decade. Together these resulted in $27.4 billion in losses, according to the Insurance Information Institute.

Current Conditions

The property and casualty insurance (P/C) industry staged a recovery in 2009. According to the Insurance Information Institute, the P/C insurance industry's average surplus of 5.8 percent in 2009, up from 0.6 percent in 2008, provided "solid evidence of a substantial and sustained rebound in profitability for P/C insurers in the wake of the financial crisis that began in mid-2007." This increase in surplus was especially significant in light of the fact that 2009 was the sixth consecutive year in which premiums declined. Net profit in the industry was $28.3 billion, nearly ten times that earned in 2008.

In 2010 participants in the property and casualty insurance industry reacted to the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was initiated by the U.S. government in response to the problems created during the financial crisis of the late 2000s. One of the provisions of the act, which involved a massive restructuring of the U.S. financial services industry, involved the creation of several new federal agencies, including a Financial Stability Oversight Council, which would have rights to oversee the insurance industry. Many in the industry, including David Snyder of the American Insurance Association, opposed the legislation on the grounds that insurance companies were not banks and should not be subjected to the same regulations. Snyder commented in National Underwriter Property & Casualty Insurance in November 2010, "Regulation of insurance is already intensive, and any more regulation should meet a rigorous cost-benefit analysis." David A. Sampson of the Property Casualty Insurers Association of America made a similar comment in a press release when he said, "We remain concerned that the expansion of government regulation in this bill could impact long-term economic recovery and undermine the competitiveness of American companies to the benefit of foreign firms."

Industry Leaders

Although the industry remained highly fragmented, the largest firms dominated: the top 200 companies (about 20 percent of the industry) wrote almost 95 percent of business in the mid-2000s. In 2010, State Farm Mutual Auto Insurance Company was the largest P/C insurance company based on direct premiums written. Based in Bloomington, Indiana, the firm was the nation's largest insurer of automobiles and homes and held about 11 percent of the property and casualty market. With 17,000 agents and 68,000 employees, State Farm recorded revenues of $32 billion in 2009. The second largest P/C insurance company was Zurich American Insurance Company, based in Schaumburg, Illinois, and a subsidiary of Swiss insurance giant Zurich Financial Services. Zurich had sales of $5.3 billion in 2009 and held about 6 percent of the market. The other three companies in the top five each held about 5 percent of the market. Allstate Corp. of Northbrook, Illinois, was started in 1931 by Sears, Roebuck & Company and by 2009 had 36,800 employees and annual revenues of $32 billion. Although fourth-place American International Group (AIG), based in New York, had been an industry leader throughout the 2000s, it was forced to take $182 billion in government bailout money in 2008. In 2009 the government owned 80 percent of the company, which had 96,000 employees and annual revenues of $96 billion. Finally, Boston-based Liberty Mutual Holding Company employed 100,000 people and had 2009 sales of $31.0 billion.

Other leading property and casualty insurance providers in the early 2010s included Travelers Companies, Berkshire Hathaway Inc., Nationwide Mutual Group, Progressive Corp., and Hartford Financial Services.


In 2005, direct property and casualty insurance carriers held well more than a half-million jobs at more than 13,500 establishments, according to the U.S. Census Bureau. Thousands more jobs existed through reinsurance carriers and other insurance and employee benefit funds outlets. Even in companies that were not adding jobs, more opportunities were available through attrition and shifts in the workforce than were available in most other industries. Opportunities existed in five functional areas, including sales, claims, underwriting, accounting/finance, and professional staff support positions. The greatest number of jobs in the insurance industry, by far, are sales positions, which are also the most accessible for people trying to enter the industry. Sales positions are available in the tens of thousands of local insurance offices scattered throughout the United States and Canada.

Although a career in sales involves more risk than many salaried positions, it can be one of the most rewarding jobs in the industry, combining personal freedom with an income in excess of over $100,000 per year. Success in the field typically requires an outgoing, entrepreneurial, and persistent personality. The profession can also be quite demanding, requiring 60 or more hours of time per week during the first few years of selling. Another significant drawback for property/casualty salespeople is industry cycles, which usually mean periods of low income.

A position in claims in the property/casualty industry involves assessing the dollar value of damage a policyholder has sustained and authorizing payment by the parent company. Claims adjusters combine knowledge with experience to judge how much damage the company will cover. In comparison to sales, claims positions are highly detailed-oriented and structured. Claims adjuster is a responsible position, which can lead to promotions within the company to a claims examiner, who handles complex claims, or a claims supervisor, who manages claims adjusters and examiners.

Underwriters are faced with the task of determining which applicants for insurance the company will reject or accept and how much coverage the applicant may receive. This assignment involves gathering information on applicants, reviewing associated risks, and applying underwriting standards to reach a decision. Underwriters specialize in either personal or business lines of property/casualty insurance, although most underwriters start out in personal lines.

Insurance accountants are typically charged with auditing functions, examination of policy holders' financial records as part of the underwriting process, or enforcing underwriting guidelines prescribed for underwriters by the parent company. Finance professionals, on the other hand, are usually more involved with financial and investment analysis, marketing research, and sales forecasting. Employers of both accounting/finance and underwriting professionals usually seek applicants with analytical backgrounds in economics or business administration.

Property/casualty insurers hire large support staffs to administer important functions that support the revenue producing activities within the company. These disciplines include actuaries, lawyers, marketers, and others. Actuaries use mathematics to determine insurance rates and policies and to establish pricing and investment guidelines, which will increase profits. The actuarial field involves complex mathematical modeling and most actuaries endure years of examinations before becoming fully designated within their profession. This occupation is also ranked among the highest in worker satisfaction and pay.

Insurance law provides excellent opportunities for attorneys, especially in the litigation arena. Because every insurance policy is a binding legal contract, attorneys receive more emphasis in the industry than they do in most other industries. Although salaries are typically below those found in the top law firms, they are similar to other corporate law positions. Other opportunities exist in public relations, customer service, and loss control. Loss control is a relatively new specialization that involves finding ways to prevent injury, theft, and damage, mostly by education.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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