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Risk management education evolves

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As technology begins its inevitable overhaul of the industry, experts say the next generation of insurance professionals will need a combination of modern knowledge and old-time communication skills.

Big data and artificial intelligence are among the technology advances that promise to turn the industry inside out, and some may wonder if colleges and universities are producing graduates who will be able to navigate through the new landscape.

“The idea that we need to get the students access to things like modeling and big data is becoming more and more prevalent,” said Kathleen McCullough, associate dean for graduate programs and research at Florida State University in Tallahassee. “For years we’ve been upping the amount of Excel that’s in our classes, upping students’ presentation skills with PowerPoint, all the normal office skills, but now you have to teach students about LinkedIn and social media.”

In addition to technology, Ms. McCullough stressed the importance of learning so-called “soft skills” such as effective communication. “It’s not just how to model data and answering questions with data,” she said.

“It’s also knowing what questions need to be asked, what data you need and then how to do those models. But more importantly how to explain what you have. So, it’s going to be as much communicative as it is going to be the quantitative to be really successful.”

Brenda Wells, director of the risk management and insurance program at East Carolina University in Greenville, North Carolina, said every school takes a different approach to properly training students for the real world – one that is primarily faculty driven.

“Some schools are going real quantitative with actuarial stuff,” she said. “We’re trying to prepare our students to be flexible, to kind of go with the flow and be adaptable. And the biggest thing they’ve got to be willing to do is continue to learn.” 

East Carolina University is offering a graduate certificate in data analytics that Ms. Wells herself intends to pursue “so that I can relay that information on to the students that are coming through now.”

Some schools, Ms. Wells said, think actuarial science “is the be-all end-all of this industry, and they’re still doing that.” 

“I personally do not subscribe to that theory,” she said. “I think actuarial science is important, but most people who work for insurance companies are not actuaries and they are not actuarial science specialists.” 

Lisa Paschal, senior vice president and chief human resources officer with Ryan Specialty Group L.L.C. in Chicago, said that in her experience, risk management programs across the board do a better job at industry interaction and involvement than many other degree programs.

“We do everything we can to help risk management programs understand our needs and we continue to build relationships with colleges and programs across the country,” she said. “We talk with students, we sit on advisory councils, and I think that just in general industry folks work closely with these councils in order to help them remain current and relevant in today’s marketplace.”

Ms. Paschal believes actuarial sciences classes are still relevant, noting that actuaries make up a good part of the population in the insurance industry.

“That curriculum now includes topics like digital disruption, climate change, predictive modeling, programming and telematics,” she said. “While it would include all the standard programs you would’ve seen in an actuarial program 10 years ago, they’re really reacting to the changes in the industry very quickly and positioning the graduates to have traction in the workplace very quickly.” 

Dan Kugler is vice president of enterprise risk management for specialty vehicle manufacturer REV Group Inc. in Milwaukee and a board director for the Spencer Educational Foundation Inc., which awards scholarships and grants in risk management and insurance, facilitates internships and provides a risk-manager-in-residence program to universities.

“Spencer provides grants to have a risk manager come on campus talking to students, educators and professors,” Mr. Kugler said. “Some of these risk managers, including myself, are also going to be looking to hire students.”

Brion Callori, senior vice president and manager, engineering and research for FM Global in Johnston, Rhode Island, said he believes colleges and universities are evolving in the face of changing times.

“I think they’re always reaching out to the industry for support on what’s new and they’re willing to amend their programs accordingly,” said Mr. Callori, who has been on the Spencer board since 2009. “I always like to say, ‘Give me a show of hands of how many people grew up thinking they’re going to work in the insurance or risk management world.’ You don’t get too many people putting their hands up. I think that’s where these programs really fill that gap.”

Karen Epermanis, associate professor and risk management and employee benefits program director at Appalachian State University based in Boone, North Carolina, said the school is taking steps to adapt its curriculum.

“We just put in last semester a specific finance course that both our finance and our risk insurance majors must take that’s Excel-based,” she said.

The university also brings in guest speakers and faculty members who are active in the industry, Ms. Epermanis said.

“I’m comfortable we’re cognizant,” she said. “We’re really putting our best foot forward, but most people are saying the stuff we’re teaching the students today when they come in as freshmen is going to be outdated by the time they’re seniors. I can’t teach them what hasn’t been developed yet. All I can do is try to be nimble. But my personal joke is that I’m going to retire and become ignorant because it’s just changing so quickly.”

Noelle Codispoti, executive director of Gamma Iota Sigma, the business fraternity for students of insurance, risk management and actuarial science in Yardley, Pennsylvania, said her organization seeks to broaden the horizons of the students so they get a more complete view of the industry.

“We try to connect students with the industry, not only from an employment perspective, but through the various trade organizations that provide the relevant content and relevant hot topics in what’s happening in the industry,” she said. “We find within all universities offering a risk management or insurance curriculum a very basic foundation ... and anything past that general knowledge they’ve received is coming from generally the research focus of the professor.”

There has been much discussion of the aging workforce in the insurance field, with a widely quoted figure saying that with retirements the industry will need to fill 400,000 positions by 2020. However, Ms. Codispoti said, “we’re not convinced that that’s actually a real number or that the industry is actually preparing to hire that many folks.”

“We feel we’ve talked about this talent gap ad nauseam, and for the length of time we’ve been talking about it, we should’ve solved it by now and we haven’t,” she said. “It’s been at least eight years that we’ve known that a talent gap would exist by 2018 and 2020 and 2025, and so the rate that companies are offering jobs doesn’t line up with what they say the need is going to be.”