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Insurance & Risk Management Stereotype Breaker

The insurance industry can drum up some unfortunate stereotypes – perhaps dealing in the probability that something bad will happen doesn’t help things?! There’s the image of the loud-mouthed, pushy insurance salesperson. And how to see past the myriad TV insurance adverts with their talking animals and fancy dress clad characters and jargon?! But is this really a correct and fair representation of the industry?

 As for risk management, professionals in this sector are stereotypically all hot on their mathematical skills. Is their rational stance in the investment banking world a bit of an irritant to their banker colleagues?

Insurers aren’t necessarily ‘wheeler dealers’...

Personalities that work in insurance are varied. Above all, the common trait in all good salespeople is the ability to form good relationships with clients and potential clients, and install their trust in the services on offer.

What’s more, the insurance industry is highly regulated by the Financial Conduct Authority (FCA). Insurers have to be authorised by this regulating body. Yes, the sales professionals and financial advisers in insurance will have targets to aim for, but they cannot recommend something that wouldn’t be suitable for you.

Ever thought of what’s past the sales front?

Insurance also boasts plenty of other career areas, such as actuarial. These guys aren’t on the front line facing the clients! They’re the ones who work out risk levels relating to insurance policies and help provide recommendations on insurance premiums based on their findings. They get into the nitty gritty data of the insurance industry and help to make sure a company doesn’t blow everything by taking on any policy agreements that could be too risky financially.

(Oh yeah, bet you didn’t think that insurance roles could pay that well either? An experienced actuary could actually clock up a seriously good salary in excess of £100,000 in some cases!)

Give risk managers a break!

Risk management professionals, whether they are quants (quantitative analysts who create mathematical and statistical models to calculate and monitor risk levels in investments and markets) or risk managers, do indeed have good heads for mathematics. But risk isn’t just about maths alone; some risk managers will specialise in areas like operational risk, which is to do with the risks internal processes and aspects such as employees may pose to the business.

Communication skills are therefore vital, because risk managers have to be able to provide feedback on their findings to various other departments, whether it’s the traders in an investment bank, the fund managers in an asset management firm or fund, or even board members within a company.

Okay, there may be the odd colleague that gets a bee in their bonnet when they deal with the risk managers. But risk management is fundamental to the finance world, particularly following the credit crunch. Nowadays, the front office teams (the ones generating capital for a company and its clients) and management teams must collaborate with their risk managers and heed their warnings. A dose of rational thinking and figures to curb a potentially over-zealous move that could result in massive losses is totally necessary for the good of a business and the integrity and prosperity of the finance industry as a whole.