Adjunct Insurance Faculty

Adjunct faculty can make a great contribution to a RMI program.  They may be more current and able to bring real-world scenarios to the classroom, to apply the material.

Does your college/university require at least a master-level degree related to the subject to be taught (in this case, risk management, insurance, finance, or management)?  Most schools do, to protect their accreditation.  Some smaller schools will make an exception for those with the CPCU, CLU, ARM, and other appropriate professional designations.  Many professionals do not have a master-level degree.

It will be a challenge to rely on adjunct faculty exclusively to deliver major.  A full-time faculty member is recommended for a RMI program that involves a RMI major, given the number of RMI classes, and the importance of advising a student organization.  If the program is a concentration or specialty without a student organization, adjunct faculty would be able to cover the program.  Evening classes may be necessary to attract good faculty that have full-time positions in the business.

Caution: many in the insurance business like to come into classrooms to teach on a part-time (some full-time) basis, but many tend to stand in front of the room and talk to the students about their experience and tell stories about the business, and never understand why the students never asked any questions or discussed the material.  An adjunct faculty appointment is different than being a guest speaker in a class.  Instructors need to prepare and incorporate class exercises, group exercises, case studies, and simulations to stimulate discussion and aid student learning.  The faculty member must honestly assess and grade student performance to let the students know if they are prepared for the business, and to preserve the academic integrity of the program and the credibility of the degree that the students are seeking.

In addition to current business practices, the theory behind business practices will help students understand when it’s possible and when it makes good business sense to deviate from those business practices.  Don’t accept that “the way it’s done now” is the only way it should be done.  Give the students the tools to make it better in the future.

To give the greatest value to the students, an academic program should be balanced in the presentation of material and discussion of issues.   It’s important to recognize that we all come from different experiences and segments of the business, and may have formed opinions regarding the way business is done.  However, under different circumstances, different business practices may be appropriate, and we should give our students a balanced view of those practices.  For example, some common biases that I’ve noticed from some industry speakers that should be avoided:

·     Insurance Distribution system:  Some have preferences for one approach over another (independent agents, exclusive agents, direct writing, and direct response – Internet, mail, phone).  In the classroom, students should be exposed to all forms, and the advantages and disadvantages of each approach.  And an accurate description of each!

·     Public Adjusters:  Many in the industry view all public adjusters akin to “ambulance chasers” who show up at the scene of a loss and scare the policyholder/claimant into hiring them to pursue their claim with the insurance company.  There are business people that take inappropriate advantage of others in every field.  To be fair to the students, it’s important to explain to students that sometimes policyholders involved in a complex claim may be aided by a public adjuster that can take the time to negotiate and supervise a complex claim.  And sometimes some insurance companies may not be as responsive as they should be.

·     Underwriting:  The use of predictive analytics in the property-casualty underwriting decision-making process has been challenged by some seasoned underwriters that have been in the business a long time, feeling that a computer can’t replace their intuition.  To their credit, many seasoned underwriters have recognized that predictive analytics are doing what underwriters have done with more data, accuracy, and speed, and have embraced good analytics that help streamline their work, allowing them to focus on the more complex cases.

·     Life insurance products:  Term life, whole life, and universal-variable products have different advantages and disadvantages that should be explained in a balanced presentation.  Of course, past studies have shown that policyholders don’t always “invest the difference” when buying term insurance, but it is still a valid option for some.

The bottom-line: if they’re technically knowledgeable, strong communicators, technologically adept, and open to training in course preparation and delivery, adjunct faculty will contribute credibility to a program, and open a professional network to your students.

Generating Excitement About RMI Studies

Any RMI program needs continuous promotion.  Given the negative public image of insurance, it’s important to generate excitement among students early in the implementation of a RMI program, and on a continuing basis.  I've heard the comment, "insurance is boring..." too many times.  Sometimes well-intentioned guest speakers have opened their presentations with this comment! (They don't get invited back.)
 

It begins with the RMI faculty.  The faculty member will have regular contact with the students, and the faculty member must be excited about the RMI field.  I’ve always felt there is no greater calling than to serve others in their time of need, unless it is to lead others to careers of serving others in their time of need.  After 40 years, I still marvel at the insurance mechanism – how it evolved, how it spreads the losses of a few over many, how the law of large numbers is employed to reduce risk, how reinsurance spreads risk globally, how this “socialist-type” mechanism operates successfully in a capitalistic society!  We need to make sure that we continue to share that excitement with students whenever we interact with them.  We need to create engaging courses with hands-on projects, simulations, interesting case studies, guest speakers (more on course design in a future post).  The Spencer Educational Foundation (associated with RIMS) offers grants for “Risk Managers in Residence” programs to bring in risk managers to educate students about the challenges of risk management, insurance, and the events "ripped from the news headlines" as they say, that continue to make life interesting for those in the business of protecting their organizations from total destruction.  And the word will spread.

On an encouraging note, I think most young people want to help their communities.  We need to point out to them that there is no better way to contribute to their communities than to insure that people in those communities can recover quickly from disasters.  Today, there are plenty of examples of disasters that have captured our attention – from the unfortunate combination of disasters in Japan, to Hurricane Irene and the floods that followed on the East Coast, to the piracy off the Somali coast, to the BP Deep Horizon oil rig explosion, to the earthquakes on the East Coast.  (The East Coast has been hit hard, almost in Biblical proportions.  I wonder if the DC politicians and greedy Wall Streeters are getting a message.  But I digress.)  And insurance professionals are there to help people put their lives back together and pay for the clean-up.  We need to help students see this in our daily lessons, and the word will spread.

Students excite other students.  When they hear an interesting speaker, when they come back from an interesting trip to visit insurance businesses or attend a conference at a fun venue, when they are working in an internship, when they are receiving several scholarships – the word gets around.  Inviting alumni back to speak about their new careers will also contribute to this excitement.   I’ve had alumni underwriting rock concerts, advising and providing coverage for professional hockey players, flying to the Gulf of Mexico to inspect an oil drilling rig (not the Deep Horizon) before insuring it, flying to London to place business at Lloyd’s, traveling throughout Europe to visit client sites, putting together coverage for a construction project in Riyadh, Saudi Arabia, or the Olympics in Atlanta – the students are electrified by the adventures of alumni that are close to them in age, sometimes former classmates.  And the word will spread.

An active student organization is also crucial to the growth of a RMI program (more on effective student organizations in a future post).  Through their career preparation activities, networking with peers on and off campus through Gamma Iota Sigma, networking with industry professionals, guest speakers, socials, participation in conferences at fun locations, new member recruiting programs, the support from the RMI industry in internships, scholarships and other donations attracted by the student organization, and other activities, the program becomes very visible on campus.  And the word will spread.

A Checklist for Creating a Collegiate RMI Program

ü  Confirm support of your administration, and the local insurance and risk management community

ü  Identify design criteria

o   Any requirements or constraints on learning outcomes?

o   Will this be a major, minor, concentration, emphasis, specialty, or certificate program? Will there be specialty tracks (e.g. agency & insurer; agency, claims, & underwriting)? A major includes more RMI courses, gives greater status to the program, signals to the professional community that you're are serious about supporting this program, levels the competition with majors graduating from other colleges/universities, and would help in attracting faculty with a Ph.D. in RMI if needed for accreditation. However, a minor or concentration or emphasis or specialty is easier and quicker to create and staff.

o   Include preparation for an insurance agent/broker license exam?

o   Want students to earn professional designations while taking courses? This gives your students a significant competitive edge for internships, and jobs upon graduation. Consider Insurance Institute materials (INS, ARM, AAI, ASLI, AU, AIC, ARe, CPCU) or American College materials (CLU, ChFC, CFP).

o   Consider “non-RMI” courses you will need as well:

§  Require at least algebra, pre-calculus, and statistics to support courses on insurance operations and risk management that include loss development and loss forecasting topics

§  Require finance courses to support courses on insurance operations, risk management (cash flow analysis), and financial planning

§  Require business law courses to support courses on insurance contracts

§  Require economics, accounting, marketing, and management to support the business knowledge that RMI majors will need

§  Require writing and communication courses

§  Require computer application courses so students really learn how to use all of the features of common application software, such as Microsoft Word, Excel and PowerPoint; and recommend database and statistical packages

§  Recommend additional courses in ethics in business, cultural diversity (in addition to local diversity, larger insurers and risk managers often deal with international exposures), and negotiations

§  Take advantage of other distinctive courses at your school that may complement an RMI curriculum, by recommending courses such as cybercrime, forensic accounting, environmental science as options in the major or electives

o   In-seat, online, or blended delivery? Synchronous and/or asynchronous? What technology does your school have available? (more on this in a future post)

o   Focus on traditional or non-traditional college students?

o   Accept credits from other educational institutions? Interest in a degree-completion program (e.g. for students that have earned professional designations and want to transfer the designation courses for academic credit towards a four-year degree)?

o   Preparation for entry-level positions or leadership positions in the future or both?

o   Focus on the property-casualty or life-health or financial planning or employee benefits segments of the business? Each of them offers rewarding career opportunities. Is one of these business segments in your local community more interested in supporting a program at your college/university? Which business segment in your local community is more interested and more likely to support your program with resources (internships, placement upon graduation, scholarships and other financial support, qualified adjunct faculty – more on adjuncts in a future post)? If a major in the life or financial planning field is desired, consider the requirements for the CFP designation, and apply to become a CFP Board-Registered Program

o   Consider articulation agreements with the Insurance Institutes and/or American College

o   Focus on the standard insurance market? Include study of the surplus lines insurance market?

o   Incorporation of college/university mission or vision: is there an emphasis or theme of ethics? Responsibility? Others?

o   Require or strongly recommend an internship? Many insurance employers are interested in "test-driving" students, and some will offer positions upon graduation before the students return for their senior year to "beat the competition"!

o   May students enter the program as freshmen, sophomores, or juniors?

o   Minimum overall grade point average requirement? (Many of the larger employers won’t interview graduating seniors with less than a 3.0 GPA on a 4.0 scale)

o   Which department should host the program? Depending on the design criteria and the focus of the program, the risk management/insurance/financial planning program could fall under:

§  Finance – if the focus is on insurance, risk financing, or financial planning

§  Management – if the focus is on risk management, enterprise risk management

§  Real estate and law – if the focus is on insurance contracts, risk management

ü  Use the design criteria to develop Program Outcomes and Course Learning Outcomes

ü  Assemble an advisory committee of professionals representing a cross-section of the insurance and risk management business

o   Work with them to develop a “charge” or mission that clearly identifies expectations (e.g. advice on curriculum – but not an authority that makes final decisions, assistance with internships and job placement for graduates, promotion of the program, assistance with recruiting, financial support)

o   Do you want this to be a working committee with members that have time to contribute, or a committee of upper-level executives that may send substitutes, but have the authority to make decisions regarding support of the program?

o   Identify key supporters/alumni/allies that understand what you need to create and maintain a high-quality RMI program, and would help identify candidates for an advisory committee

o   Allow members to send a senior delegate to represent them when they can’t attend (but don’t encourage the sending of substitutes – you want their personal involvement, especially in the development years)

o   Consider a “renewable term” (perhaps 1, 2, or 3 years; staggered so renewal of all members doesn’t occur at same time) – making it easier to allow less active or less interested members to drop-off without having to ask them to drop-off, giving the committee more structure, and supporting the importance of the committee and its mission

o   Meet 2 to 4 times per year (more frequently in the program development years)

ü  Create a student organization to increase internship, scholarship, networking, leadership, and recruiting opportunities

o   Affiliate with the Gamma Iota Sigma, the only international risk management, insurance, and actuarial science collegiate society (a member of the Professional Fraternity Association). This requires:

§  Support of your administration

§  Recognition as an official campus student organization

§  Interested and supportive faculty advisor

§  10 or more students/potential members

§  A per student lifetime membership fee (currently $30) and annual per student renewal fee (currently $5)

§  A chapter charter fee (currently $1,500 - industry supporters are often willing to sponsor this; includes ceremony & large banner)

§  Local insurance and risk management community support

ü  Recruit faculty through the American Risk and Insurance Association (the trade association for RMI academics)

o   Especially if a Ph.D. is needed for accreditation (AACSB)

o   Encourage faculty participation in ARIA (networking, research presentations)

o   A full-time RMI faculty member will help attract students – the full-time faculty member is more accessible to students, and more likely to be a strong advisor for the student organization

ü  Library and Technology Resources

o   Recommend subscriptions to Business Insurance, National Underwriter, and Best’s Aggregates and Averages, Best’s Key Rating Guide, Best’s Underwriting Guide, online data from NAIC

o   Insurer annual reports, preferably NAIC Annual Convention Blanks (ask insurers to add you to their list for their reports)

o   Computer lab for an online testing site if professional designations are encouraged

ü  Budget(s) should/could include:

o   The cost of faculty (full-time with benefits or part-time)

o   Office and supply expense

o   Luncheon meetings for advisory committee

o   Membership in trade associations such as ARIA and RIMS

o   One or two conferences per year

o   Advisors are strongly encouraged to attend the Gamma Iota Sigma conference with their students each fall

o   ARIA, RIMS, CPCU, NAIFA, and NAPSLO provide important professional development and networking opportunities

o   The Gamma Iota Sigma chartering fee

o   Subscriptions and publications

o   Marketing the program:

§  Website and social media

§  Brochures/flyers for admissions recruiters

§  Press releases to insurance and risk management periodicals

§  Advertisements in insurance and risk management periodicals?

§  Travel to speak to insurance and risk management organizations about the new program?

§  Exhibit at trade shows (state insurance agents association, insurer association, RIMS annual, CPCU annual, NAIFA annual)?

Share this budget with your development office and advisory committee; the insurance community will often sponsor some of these expenses or provide in-kind contributions, e.g. high-quality brochure printing (be sure to report these to your development office so the service provider receives the appropriate receipt and recognition).

Why is RMI education important?

It is crucial to the survival of the insurance business that is an integral part of the global economy and our society.

Several studies and articles have identified a developing crisis for the insurance business: many insurance professionals are approaching retirement age, and insurers and agencies do not have enough younger people joining their organizations.  Studies by Deloitte, McKinsey, and the Council of Insurance Agents and Brokers.   Articles published by National Underwriter magazine, Risk Management magazine, International Risk Management Institute.

The Griffith Insurance Education Foundation recently hosted an Insurance Education and Career Summit to discuss this issue, bringing together over 100 people representing the insurance business and academic community.  The problem of the talent gap is exacerbated by a lack of interest in a career in insurance.

Collegiate RMI programs are an essential part of the solution.  The colleges and universities have been very creative in attracting young people to the field, and preparing them for rewarding careers in RMI.  Gamma Iota Sigma, the international risk management, insurance, and actuarial science professional fraternity with chapters at colleges and universities throughout the U.S. and Canada, has generated a lot attention for RMI programs at colleges.  As a professor of RMI at a small college, I found our Gamma Iota Sigma chapter and members to be great recruiters of new students through the exciting programs and trips they organize, through the professional networking in conferences at the national and international level, and through direct efforts to recruit from high schools throughout their state.    The Independent Insurance Agents & Brokers of America “Project InVEST” program is also generating interest in many high schools, and the Griffith Insurance Education Foundation Teacher Institutes have shared career opportunities as well as instructional ideas with high school educators.  As the director of the RMI Center at Olivet College, I worked with the school district in our area to create a program to allow high school seniors from a three-county area to take insurance classes for college credit (and get them excited about the business of insurance and risk management).

In future blog posts, I plan to include tips for creating RMI programs at the college level, and other thoughts on RMI educational programs.  I will list some helpful links, once I have permissions to post.  I invite you to make comments and share your ideas, too!