Why insurance companies are bad for a finance career
(Senior Chimp, 23
Points)
on 7/18/12 at 1:00am
Sorry for asking this question which definitely exposed my outliner's nature. But I'm really curious why insurance isn't counted as a serious financial product, apart from equity, debt, commodities and FX? And why my ibank friends hate insurance guys. Is it because they always try to sell insurance products to their friends or relatives? But as we understand it, ibank is sales in nature as well.
What's wrong with insurance guys that make them unlikable?
Your comments/insights would be highly valued.
“Habit simplifies our movements, makes them accurate, and diminishes fatigue.”--William James
I'm not sure, but "Insurance
I'm not sure, but "Insurance Salesman" has historically been the punchline for many jokes, kind of like the "Irish," "Lawyers" and "Blondes."
I've worked insurance when I was young. It was a pretty easy job, the people in my office were making bank, and there was not much work involved, asking questions and putting the answers into the Point-Of-Sale (POS) software. Not the modeling or analysis involved in most finance gigs, and most of the guys in my office didn't even have a university degree. If some 16yr old in a call centre can do your job, the ROI of doing your Uni degree isn't high enough to justify the buy-in and opportunity cost. Go straight into it after high-school.
That said, it is an introduction to understanding Risk, and a foot in the door.
If you can sell life insurance, it's like selling super, it's permission to write money, because people don't switch providers often, so your commissions each year on your own private renewal policies you write just add up as you build your client list, without much servicing of your accounts. Business insurance is another easy one to sell, because everyone needs public liability and other products in order to get rent/operate on a jobsite/qualify for government tenders/some other relevant reason. Easy base premium.
But yeah, it's not a "real" financial service, because there's not much you really need to know to sell it. You still have to be financial services qualified (I think? I remember having to take tests every month or so to make sure I knew my stuff) and you still have to be careful because you're not qualified to "legally give financial advice." But you don't need a degree for it, and you'll never use WACC, NPV, ROI, KPI's, or any real analytics in it. It's soft skills like marketing and selling all the way to the bank, and sales men are traditionally viewed as lower middle class, particularly those in insurance (with maybe a jump to middle middle class if you're doing life policies and B2B).
Thanks for your detailed
Thanks for your detailed reply! I really appreciate it. You mentioned it was the foot in the door. How possible is it for an insurance salesman to make a decent career in ibank or in the finance industry in general? Is such transition common? What shall I prep in order to make that transition? I have a roommate who's started selling insurances two years ago, and she's doing the same front line today... Thanks again!
“Habit simplifies our movements, makes them accurate, and diminishes fatigue.”--William James
Honestly, I'm not the best
Honestly, I'm not the best person to ask because I'm doing Consulting and Audit, not ibank.
It's not a common transaction, but it's not impossible.
Honestly, best bet is to be doing insurance in a bank, before you get your undergrad, as i was, get your training in financial services products, then go to do your uni degree in finance/econ/commerce at a target, get a good GPA while joining a few clubs and societies so you have a "well rounded personality" while you're there intern at a few Ibanks, and then hopefully get an offer.
Basicly, the good thing was for applying for grad jobs, I had a bank on my resume, so I got interviews with banks who usually wouldn't look at me with my GPA. Mind you, I also had management positions that contributed to that too. Plus it gives you solid work experience, and it's better than McDs.
But I can't tell you more specifically because I don't know your or your housemate's situation.
Insurance is boring, that's
Insurance is boring, that's why nobody likes it. Go talk to the different verticals in your FIG group, the Banks guys will all tell you insurance sucks, as will the FinTech guys, the Asset Managers and whoever else, hell, at my bank even the guys who worked in insurance IB would constantly complain.
Ah I see... I already got my
Ah I see... I already got my masters in journalism, have no professional training in the finance sector, and want to find the foot on the door...I liked your ROI analysis in particular. Well, maybe I shall pass working as a financial advisor as my first foray into the finance sector..thanks again for your input.:)
“Habit simplifies our movements, makes them accurate, and diminishes fatigue.”--William James
Outliner, here's the actual
Outliner, here's the actual answer:
Insurance sales is retail finance. You don't deal with institutional clients or companies, and instead use your rapport with people you know to sell your service. You may as well be selling lemonade, as the "skills" you use in insurance sales don't apply at all to any career in high finance. It's not an "introduction to risk," as that entails actual risk modeling and statistical analysis. It isn't a "foot in the door" either - as I said, anything you learn is basically non-transferrable.
It's akin to working for Amway or some other MLM firm and trying to break into Saatchi & Saatchi or some other big Madison advertising company. Your experience is nearly irrelevant.
All that is aside the constant degradation of the name "finance" that goes on in the industry. Insurance guys go around saying they "do finance," when in reality they don't. "Finance" is what the actual risk management, IBD, corporate finance, portfolio management, etc. folk do.
wsoutliner: Ah I see... I
Ah I see... I already got my masters in journalism, have no professional training in the finance sector, and want to find the foot on the door...I liked your ROI analysis in particular. Well, maybe I shall pass working as a financial advisor as my first foray into the finance sector..thanks again for your input.:)
Ah, you were actually contemplating the job? It's good that your gut reaction was to be skeptical - I nearly got sucked into that when I was a teeny bopper sophomore in college. Good move.
Thank you insider for
Thank you insider for justifying my decision! How about wealth management and private banking? Are they sort of financial planning as well? WIll you count these two categories as "real finance"? I'm asking because I have an interview with a wealth management training company tomorrow. And a club friend from a local wealth management company told me they are defacto financial planning company, helping poor clients get financially educated and catch up with the world's 1%. I'm bewildered. Has wm been degraded/abused as well? Is wealth management in general the foot in the door? I'm studying a part-time diploma in banking and finance. But I'm not 100% sure if it is the right path for me to break into finance.
“Habit simplifies our movements, makes them accurate, and diminishes fatigue.”--William James
Insurance IB?
Insurance IB?
“Habit simplifies our movements, makes them accurate, and diminishes fatigue.”--William James
Insurance IB?
Insurance IB?
“Habit simplifies our movements, makes them accurate, and diminishes fatigue.”--William James
wsoutliner: Thank you insider
Thank you insider for justifying my decision! How about wealth management and private banking? Are they sort of financial planning as well? WIll you count these two categories as "real finance"? I'm asking because I have an interview with a wealth management training company tomorrow. And a club friend from a local wealth management company told me they are defacto financial planning company, helping poor clients get financially educated and catch up with the world's 1%. I'm bewildered. Has wm been degraded/abused as well? Is wealth management in general the foot in the door? I'm studying a part-time diploma in banking and finance. But I'm not 100% sure if it is the right path for me to break into finance.
Private wealth management may be a good inlet to banking, however you have to make sure that it's for a legit firm. Private banking is definitely not a good way in to finance (if what you mean is those people who work at TD Bank or something).
Here's what I think your issue is: you may not understand what the worlds of finance are. There's the more institutional-focused side which is where IBD, research, trading, PE, and all that good stuff resides. Then there's retail finance, which includes financial planning and all that. You should read up and find out what the industry really is before you decide to embark on a journey to make it in.
Another point is that if your goal is to work in finance, and given what seems to be an ordinary understanding of the field, you won't be able to land a good job. You need to know things inside and out to find work, and not knowing what industries are which is not a good indicator. At your age (or at least your level of education) you shouldn't have time to be messing around with shitty jobs or fishing around. It won't look good to recruiters either way.
You want to do something and excel at it. If you can stay in journalism and do something extraordinary, you should. If you're absolutely set on doing finance right now, you should begin considering a MS Finance. MBA school is the best way to break in from another industry, but you need good experience to make it into a good program.
All said, I think you just have a whole lot more research to do on your own. Start talking to people in the field from your school (friends and alumni) and go to networking events local to where you are. If you can, visit NYC for the WSO Conference. Even watch some finance movies, if you can (Margin Call, Rogue Trader, Wall Street 1, etc.).
FSC: It's not an
It's not an "introduction to risk," as that entails actual risk modeling and statistical analysis. It isn't a "foot in the door" either - as I said, anything you learn is basically non-transferrable.
When I worked insurance, I was dealing b2b and coldcalling companies, not selling to friends.
I didn't say it was an introduction to risk, it was an introduction to understanding risk. There's a difference.
And it's a foot in the door, in the way a job at McD's is a foot in the door to work in general. If he's got nothing on his resume, insurance is going to indicate more than a retail job at Kmart or writing on a generic blog that he's interested in finance. It gives him a reference for his resume. That's all I was trying to say, and I don't know if that was clear.
But yeah, I wouldn't recommend it. It's up there with a high-school or a uni job, not a proper internship or a actual finance job, and it's too late in the game for that for the OP.
Insurance firms invest their
Insurance firms invest their premiums, so there is indeed a finance aspect in those firms. Otherwise, as others stated, sales =/= finance. The risk/actuarial stuff is also not finance, that is more like (correct me if this is incorrect) figuring out how to price the premiums for each customer or group of customers using statistics.
PS, I hate to bring this up
PS, I hate to bring this up but your grammar/vocabulary could use some polish. WTF is an outliner? Outlier perhaps?
av8ter: PS, I hate to bring
PS, I hate to bring this up but your grammar/vocabulary could use some polish. WTF is an outliner? Outlier perhaps?
WTF is an av8ter? Aviator perhaps?
wsoutliner: Ah I see... I
Outlier indeed...My patent
“Habit simplifies our movements, makes them accurate, and diminishes fatigue.”--William James
That was a crucial heads up
“Habit simplifies our movements, makes them accurate, and diminishes fatigue.”--William James
wsoutliner: I watched Wall
Assets: wsoutliner: I
This entire exchange is
Thanks for your critique.
“Habit simplifies our movements, makes them accurate, and diminishes fatigue.”--William James
I didn't mean to be a
“Habit simplifies our movements, makes them accurate, and diminishes fatigue.”--William James
Undeniably print media is a
“Habit simplifies our movements, makes them accurate, and diminishes fatigue.”--William James
Insurance sales has to be
"Well, you know, I was a human being before I became a businessman." -- George Soros
What an absolute disaster of
Financial Modeling Training
Guide to Finance Interviews
Banking Resume
Thanks for your succinct
“Habit simplifies our movements, makes them accurate, and diminishes fatigue.”--William James
Insurance is so boring
wsoutliner: Undeniably print
Hold on a second. This isn't
I happen to work in the