The insurance industry’s pitch is simple: We’ll help you out in times of trouble. Life insurers sell products that promise to pay off in the event of untimely death, or to help fund a retirement that may be decades away. Property/casualty insurers pledge to be there if a house burns down or a car crashes. So it’s not good for marketing if the industry looks like it wasn’t fully prepared for the unexpected, like subprime borrowers defaulting on housing loans en masse. It gets harder to look strong for the long-haul when credit ratings are getting downgraded, share prices are plummeting, and taxpayer assistance is on everyone’s lips. Not surprisingly, then, 2008 and early 2009 have been challenging for insurance companies.

But for people whose main knowledge of the industry comes from buying an insurance policy, it’s worth looking at some of the things insurers have going for them. Many policies that life insurers sell are long-term commitments, and consumers often have an incentive to stick with them, meaning recurring revenues. Nor is the need for retirement planning going to disappear; life insurers are among the firms competing for that business. And property/casualty insurers have a built-in market -- car insurance is often mandatory, banks demand home insurance before they make a mortgage loan, and businesses still need to protect themselves against property damage and liability.

In short, the industry isn’t going out of business.

WHERE THE ACTION IS

For much of the insurance industry, the recent woes can be summed up in one word: Investments. Insurers can make money in two main ways. First, they keep claims and expenses low, so they get to keep more of each premium dollar they collect. Second, they invest those premiums, and then pocket the extra income. But the math gets more complicated if investment losses overshadow any investment income.

Some insurers have been hit far harder than others, however, and that can create opportunity. While some life insurers, for instance, have seen their credit ratings cut, some -- e.g. Northwestern Mutual and New York Life Insurance Co. -- are rated Triple A and others are rated slightly lower but seen as under less stress. Strong ratings could be a particularly important selling point for customers who feel the weight of uncertainty amid the financial crisis.

The picture is rosier, in some ways, for property/casualty insurers. They aren’t as vulnerable to the stock market – they have shorter-term liabilities, and so they typically favor safe, liquid investments. Moreover, some see an opportunity to pick up customers in the wake of the federal bailout of American International Group Inc., the largest commercial insurer in the U.S.

But for all insurers, the uncertainty comes in large part from the consumer. Ultimately, that’s going to dictate where new jobs are. It’s still not entirely clear how the stock market plunge last year will affect retirement planning products, which have been the growth engine for life insurers. And for property/casualty insurers, when there is less economic activity and property is worth less, that can cut into opportunities to profit.

CAREER PATHS

There are a variety of different professional routes one can follow in the insurance industry. For some of them, however, people may need specific licenses or benefit from specialized training.

Insurance companies, for instance, need agents, and agents typically need state licenses; and if agents want to sell certain financial products, such as variable annuities, they also need a securities license. Claims examiners and adjusters -- a category that accounted for over 9% of the 2.3 million insurance industry jobs in 2006 - may also need to get a state license, according to the Bureau of Labor Statistics. Actuaries often have backgrounds in mathematics or statistics, and get extensive training. There are also opportunities for specialists in information technology, as insurers seek to get smarter about using data to predict which consumers are likely to be better risks. One entry-level insurance industry job is underwriting, for which people can earn specialized certifications as their career develops.

Many of the executives at the top of the industry, however, are steeped in finance. That may not be surprising, given how important investing can be to an insurance company's profitability, and how much of the business involves managing the vast amounts of capital that back up insurance policies. The most obvious example is Warren Buffett, whose Berkshire Hathaway Inc. includes large insurance operations, including Geico, the car insurer. But there are other industry CEOs with backgrounds in investment and finance: Edward Zore, who heads Northwestern Mutual, was once the firm's chief investment officer; and Thomas Wilson, the CEO of Allstate Corp., was once the managing director for mergers and acquisitions at Dean Witter Reynolds.

GETTING THE JOB

Insurance only looks boring from the outside – people’s eyes glaze over when they hear the word at parties. That’s why it can be helpful to think about the insurance industry as the business of risk. Other industries have to contend with risk, of course. But in insurance, understanding risk and controlling it are the whole purpose. Job candidates who can take that concept and run with it are likely to have an advantage on the competition, particularly at a moment in the nation’s history when risk looks very real and threatening.