Underwriting & Association Careers October 20, 2006 Cynthia R. Ziegler, CPCU, ARM, AAI, CAE CAS...

Underwriting & Underwriting & AssociationAssociation

CareersCareersOctober 20, 2006October 20, 2006

Cynthia R. Ziegler, CPCU, ARM, AAI, Cynthia R. Ziegler, CPCU, ARM, AAI, CAE CAE

CAS Executive DirectorCAS Executive Director

Underwriting Underwriting Careers Careers

What is What is Insurance Insurance Underwriting?Underwriting?

Core Competency Core Competency of insurance of insurance companiescompanies

Includes Includes examining, examining, accepting or accepting or rejecting rejecting insurance risksinsurance risks

Underwriting Underwriting CareersCareers

History of History of UnderwritingUnderwriting

Lloyd’s of LondonLloyd’s of London

Edward Lloyd’s Coffee House

in Tower Street, circa 1688

Lloyd’s of London, today

The Golden HindThe Golden HindCynthia Ziegler – 20%Cynthia Ziegler – 20%

Professor D’Arcy – 10%Professor D’Arcy – 10%

Professor Gorvett – 10 %Professor Gorvett – 10 %

Donald Trump – 49%Donald Trump – 49%

Martha Stewart – 11%Martha Stewart – 11%



Becoming an Becoming an UnderwriterUnderwriter

Entry-level jobs for college Entry-level jobs for college graduates with business graduates with business administration or finance administration or finance degrees OR other degrees degrees OR other degrees are acceptable with are acceptable with coursework in business, law coursework in business, law and accounting classesand accounting classes

Continuing education is Continuing education is necessary for advancementnecessary for advancement


Attributes of Attributes of UnderwritersUnderwriters

Enjoy analyzing Enjoy analyzing informationinformation

Pay high attention to Pay high attention to detaildetail

Possess good judgment Possess good judgment to make sound business to make sound business decisionsdecisions

Excellent communication Excellent communication and interpersonal skillsand interpersonal skills


What do underwriters do?What do underwriters do? Gather information from insurance Gather information from insurance

applicationsapplications Analyze information to determine if risk Analyze information to determine if risk

is acceptableis acceptable Calculate the risk of lossCalculate the risk of loss Establish appropriate premium Establish appropriate premium Issue policies to cover risksIssue policies to cover risks


Underwriting SpecializationsUnderwriting Specializations Commercial Property-Casualty (Business Commercial Property-Casualty (Business

Risks)Risks) Workers CompensationWorkers Compensation Marine, Inland & OceanMarine, Inland & Ocean AviationAviation Agriculture, Crop Hail, Animal MortalityAgriculture, Crop Hail, Animal Mortality Professional LiabilityProfessional Liability Personal Lines (Your things & Activities)Personal Lines (Your things & Activities) Catastrophe (Flood, EQ, and Weather)Catastrophe (Flood, EQ, and Weather)


Career Path OpportunitiesCareer Path Opportunities Underwriter TraineeUnderwriter Trainee Assistant UnderwriterAssistant Underwriter UnderwriterUnderwriter Senior Underwriter/Underwriting Senior Underwriter/Underwriting

SupervisorSupervisor Director/VP/SVP of UnderwritingDirector/VP/SVP of Underwriting CUO Chief Underwriting OfficerCUO Chief Underwriting Officer


AdvancementAdvancement Continuing education is Continuing education is

required required Certification in relevant areaCertification in relevant area Insurance companies Insurance companies

generally pay tuition for generally pay tuition for course/certification and offer course/certification and offer salary incentives for salary incentives for successfully passing courses.successfully passing courses.


CertificationsCertifications CPCU (Certified Property CPCU (Certified Property

and Casualty Underwriter)and Casualty Underwriter) RPLU (Registered RPLU (Registered

Professional Liability Professional Liability Underwriter)Underwriter)

AU (Associate in AU (Associate in Underwriting)Underwriting)

AMIM (Associate in Marine AMIM (Associate in Marine Insurance Mgt.)Insurance Mgt.)

CPCU


Job OutlookJob Outlook Best prospects for those Best prospects for those

with excellent computer and with excellent computer and communication skills communication skills coupled with a background coupled with a background in finance.in finance.

Because underwriting Because underwriting software increases worker software increases worker productivity, employment is productivity, employment is expected to grow slowly expected to grow slowly through 2014.through 2014.

Insurance is a necessity and Insurance is a necessity and there will always be a need there will always be a need for underwriters so it is less for underwriters so it is less subject to recession and subject to recession and layoffs.layoffs.


Employment in InsuranceEmployment in Insurance 2005 numbers in (00):2005 numbers in (00): Property & CasualtyProperty & Casualty 601.4601.4 Life & HealthLife & Health 752.6752.6 ReinsuranceReinsurance 29.829.8 Agencies & BrokeragesAgencies & Brokerages 649.0649.0 Total for the IndustryTotal for the Industry

2,255.42,255.4

Over the last 10 years, employment in the Over the last 10 years, employment in the insurance industry (all sectors) has averaged 2.1 insurance industry (all sectors) has averaged 2.1 percent of the total U.S. employment.percent of the total U.S. employment.

Source: U.S. Department of Labor, Bureau of Labor Statistics. Source: U.S. Department of Labor, Bureau of Labor Statistics.


Underwriter StatisticsUnderwriter Statistics 101,000 Insurance 101,000 Insurance

Underwriters in 2004Underwriters in 2004 2 out of 3 underwriters work 2 out of 3 underwriters work

for Insurance Companiesfor Insurance Companies Remaining work for insurance Remaining work for insurance

agencies, companies that offer agencies, companies that offer insurance services to insurance services to insurance companies and insurance companies and policyholders.policyholders.

A small number work for A small number work for banks, mortgage companies banks, mortgage companies and real estate firms.and real estate firms.


Salary Ranges for those who have Salary Ranges for those who have earned the CPCU designationearned the CPCU designation

2%

6%

10%

34%

17%

22%

9%

0% 10% 20% 30% 40%

<$29,999

$30,000-$39,999

$40,000-$49,999

$50,000-$74,999

$75,000-$99,000

$100,000-$149,000

>$150,000

Statistics as of June 2006.

Source: CPCU Society


Gender of Gender of UnderwritersUnderwriters

Women, 33%

Men, 67%

Statistics as of June 2006.Source: CPCU Society


Top Twenty U.S. Top Twenty U.S. Property/CasualtProperty/Casualty Companies, by y Companies, by Revenues, 2005Revenues, 2005($ millions)($ millions)

Rank Group Revenues Assets

1 American Intl. Group $108,905 $853,370

2 Berkshire Hathaway 81,663 198,325

3 State Farm Insurance Cos. 59,224 159,669

4 Allstate 35,383 156,072

5 Hartford Financial Services 27,083 285,557

6 St. Paul Travelers Cos. 24,365 113,187

7 Nationwide 21,832 158,258

8 Liberty Mutual Insurance Group 21,161 78,824

9 Loews (CAN) 15,363 70,676

10 Progressive 14,303 18,899

11 Chubb 14,082 48,061

12 USAA 11,980 51,038

13 Genworth Financial 10,504 105,292

14 Fidelity National Financial 9,669 11,105

15 First American Corp. 8,062 7,599

16 American Family Ins. Group 6,864 14,637

17 Safeco 6,351 14,887

18 Erie Insurance Group 5,104 13,057

19 Auto-Owners Insurance 5,014 11,729

20 W.R. Berkley 4,997 13,896

Source: Fortune.

http://www.iii.org/media/facts/statsbyissue/industry/?table_sort_735305=2





How Do Underwriters Keep How Do Underwriters Keep Current with changes?Current with changes? Read Trade PublicationsRead Trade Publications Attend Continuing Education SeminarsAttend Continuing Education Seminars Form Associations or Professional Form Associations or Professional

Societies to learn from each other Societies to learn from each other through conventions, meetings and through conventions, meetings and scholarly journals.scholarly journals. Specialized (IMUA, PLUS)Specialized (IMUA, PLUS) General (CPCU) General (CPCU)

Association CareersAssociation Careers

Associations in the U.S.Associations in the U.S. 147,000 associations in the US147,000 associations in the US Associations employ 295,000 in Associations employ 295,000 in

USUS Majority are located in the Majority are located in the

following metro areas:following metro areas: Washington, DC (3,500)Washington, DC (3,500) Chicago, IL (1,500)Chicago, IL (1,500) New York, NY (1,900)New York, NY (1,900)

Trade Associations are made Trade Associations are made up of Individuals & businessesup of Individuals & businesses

Professional Societies are made Professional Societies are made up of only individual members.up of only individual members.


Public For ProfitPublic For Profit Owned by Owned by

ShareholdersShareholders Controlled by BoardControlled by Board Operations Conducted Operations Conducted

by Employeesby Employees Organized by Organized by

Functional DivisionFunctional Division Purpose is to create Purpose is to create

profit/wealth for profit/wealth for shareholdersshareholders

Not-for-ProfitNot-for-Profit Owned by MembersOwned by Members Policy Set by BoardPolicy Set by Board Activities conducted Activities conducted

jointly by staff and jointly by staff and member volunteersmember volunteers

Organized around Organized around Functional Activities Functional Activities

Purpose is to provide Purpose is to provide member services member services and enhance the and enhance the professionprofession


What Do Associations & Societies Do?What Do Associations & Societies Do? 95% offer education programs95% offer education programs 81% use the Web and e-mail to share 81% use the Web and e-mail to share

information with membersinformation with members 79% offer information and public information 79% offer information and public information

and educationand education 71% conduct industry research or develop 71% conduct industry research or develop

statistical informationstatistical information Most all promulgate codes of conduct or Most all promulgate codes of conduct or

codes of ethics and require members to be codes of ethics and require members to be bound by those codesbound by those codes


Attributes of Association StaffAttributes of Association Staff College degreeCollege degree Extremely flexible & versatileExtremely flexible & versatile Ability to manage multiple projects Ability to manage multiple projects

simultaneouslysimultaneously Tact and diplomacyTact and diplomacy Well organizedWell organized Excellent communication skillsExcellent communication skills Team playerTeam player Thick skinThick skin


Typical Career PathTypical Career Path Administrative Position ($33-44k)Administrative Position ($33-44k) Coordinator ($49-77K)Coordinator ($49-77K) Manager ($63-103k)Manager ($63-103k) Director/VP/SVP ($82-136K)Director/VP/SVP ($82-136K) Executive Director/CEO ($140-828K)Executive Director/CEO ($140-828K)

Organizational structure tends to be Organizational structure tends to be “flatter” and career opportunities are “flatter” and career opportunities are usually created by moving to larger usually created by moving to larger organizations.organizations.


Typical Job Functions in Associations & Typical Job Functions in Associations & SocietiesSocieties Education and professional development plannersEducation and professional development planners Publication editors & writers, desk top publishingPublication editors & writers, desk top publishing Government relations and lobbyingGovernment relations and lobbying Researchers, librarians/information specialistsResearchers, librarians/information specialists CredentialingCredentialing Web developers and editorsWeb developers and editors AccountantsAccountants Meeting plannersMeeting planners Marketing & communicationsMarketing & communications Executives/CEOsExecutives/CEOs


CertificationsCertifications CAE, Certified Association ExecutiveCAE, Certified Association Executive CMP, Certified Meeting PlannerCMP, Certified Meeting Planner CPA, Certified Public AccountantCPA, Certified Public Accountant


Property and Casualty Associations and Property and Casualty Associations and their Locationstheir Locations CPCU Society and AICPCU – Malvern, PACPCU Society and AICPCU – Malvern, PA Casualty Actuarial Society – Arlington, VACasualty Actuarial Society – Arlington, VA American Insurance Association – Washington, DCAmerican Insurance Association – Washington, DC Inland Marine Underwriters Association – New YorkInland Marine Underwriters Association – New York Property Casualty Insurance Association– Downers Grove, ILProperty Casualty Insurance Association– Downers Grove, IL Insurance Accounting and Systems Association – Durham, NCInsurance Accounting and Systems Association – Durham, NC Insurance Information Institute – New YorkInsurance Information Institute – New York Captive Insurance Company Association – Minneapolis, MNCaptive Insurance Company Association – Minneapolis, MN Society of Insurance Trainers and Educators – San Francisco, Society of Insurance Trainers and Educators – San Francisco,

CACA

Thank you!Thank you!

Casualty Actuarial SocietyCasualty Actuarial Society4350 North Fairfax Drive, Suite 2504350 North Fairfax Drive, Suite 250

Arlington, Virginia 22203Arlington, Virginia 22203

www.casact.orgwww.casact.org

Underwriting & Association Careers October 20, 2006 Cynthia R. Ziegler, CPCU, ARM, AAI, CAE CAS...

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