If you are researching insurance jobs as a career option, then set time aside to understand some of the history and basic principles of insurance. Here is some basic background. Contrary to belief, London is not the oldest insurance employment market in the world (although it stretches back to Lloyd’s Coffee House on Tower Street in 1688). If you are ever asked at interview to explain what you know about its history, the correct answer is that the earliest known record of insurance is that from the Babylonians in the time of King Hammurabi (at least 3,500 years ago), though it is believed that insurance as a concept was in use even before that.
The purpose of insurance – the offsetting of financial risk – also includes re-insurance, in which an insurance company offsets its own exposure (risks) by insuring itself with a re-insurance company. This is exactly analogous to a bookmaker who finds that he has too much exposure to the favourite winning the Grand National, then re-insures the risk (lays an offsetting bet) with another bookmaker. Reinsurance is particularly important where an insurance company specialises in particular types of insurance – for example, hurricane insurance. Hurricane ‘Katrina’ caused problems for some companies who were over-exposed to hurricane risk.
Insurance at Lloyd’s of London operates through syndicates, where wealthy members – ‘names’ – ‘clubbed together’ to provide insurance cover. They are exposed to unlimited liability, and liable to lose all their assets in extremis. New names with unlimited liability are no longer admitted following several major insurance crises which caused widespread personal bankruptcies. There are currently still over 750 names who enjoy high financial returns for their unlimited financial exposure, but they are literally a dying breed. The organisation is far more complex now than after its informal beginnings. Underwriters and managing agents arrange the business for the syndicates. Companies also participate in the markets at Lloyd’s and enjoy limited liability.
The insurance business is, in general, tightly regulated in Britain where failures and frauds in the past have left many people and businesses uninsured.
About the Author : Emily Inglis is a writer and supporter of insurance jobs