Sounds like you are likely booting to the installer for the older OS which originally shipped with the Mac from the factory. If that is the case & you are booted to a macOS 10.10 or earlier installer, then you will need to partition & format the internal SSD using the instructions in this article:
https://eshop.macsales.com/tech_center/formatting/Mac_Formatting_6-10_R3.pdf
If you are booted to a macOS 10.11+ installer, then select the physical Apple SSD and erase it as GUID partition and MacOS Extended (Journaled) for macOS 10.11 - 10.13, otherwise erase it as GUID partition and APFS (top option) for macOS 10.14+. If booted to the macOS 10.13+ installer, then you may need to click "View" within Disk Utility and select "Show All Devices" so that the physical drive appears on the left pane of Disk Utility.
FYI, if your laptop is still able to boot normally, then I highly recommend first creating a bootable macOS USB installer so you have more options if something goes wrong after you erase the internal SSD.
Create a bootable installer for macOS - Apple Support