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Hallmarks of insurance professionals Knowledge, scholarship, and ethics should make up the foundation on which insurance practitioners build their careers By Emanuel Levy
As most insurance practitioners are aware, knowledge and expertise are essential. What may not be realized is that the insurance industry is probably number one among business and professional entities in providing education, information, and guidance at all levels. This goes on throughout the year in a variety of formats with an impressive number of participants. The insurance business truly fulfills its mission of understanding risk and covering exposures from a small house on the prairie to a flight into space. Formal education in the insurance business goes back to the early 20th century and to the Wharton School of Business and Finance at the University of Pennsylvania. Insurance was one of its specialties, and Professor Solomon S. Huebner, then considered the “dean” of life insurance, helped create the forerunner of the industry’s now prolific designations. The name Chartered Life Underwriter (CLU) was chosen, almost like academic degrees, to lend “professional” status to those in sales who completed formal educational courses. Even though those who sold policies did not “underwrite” the risk, the term was nevertheless applied to the function and has persisted for decades. The CLU and all the designations that followed over the years, of course, must be earned and conferred by the association or institution that “owns” it. Writing about insurance education in Rough Notes is in effect bringing coals to Newcastle, because the vast majority of readers are unquestionably part of the process. Nevertheless, knowing about origins, development, and the extent to which the information process has penetrated the entire scheme of the business will, we hope, put the entire system into perspective, enforce the values, and induce even greater participation. While noting the array of designations, I created my own descriptive acronym. It is OSEO: the “Outstanding Smorgasbord of Educational Offerings.” Another brief history note relating to the role of insurance education goes back to the formation of “insurance societies” in New York and Boston, among other locations. The Insurance Society of New York, formed in February 1901, centered on the creation of a library and subsequently the School of Insurance. The library became the largest of its kind in the world, and the School of Insurance evolved into The College of Insurance, now part of St. John’s University. Boston’s library society also morphed into a prestigious educational institution. Moving forward What is the extent of insurance education today, including not only formal schooling but, more significantly, the extensive meetings, conferences, seminars, and lectures sponsored by associations of every segment of the business? That does not even take into consideration in-house courses by insurance companies and service organizations. Is it overkill? Not in my estimation, given the contractual nature of the business that has total liability, property, life and health exposures in the trillions of dollars; safeguards the interests of millions of individuals, businesses, and public property and liability; and is itself subject to legal actions for alleged errors or omissions or other inadequacies. That, of course, includes the agents and brokers. Insurance is a top participant in the court system. Failure of the business to know what it is doing; the content and interpretation of its products and its methods of distribution; as well as the laws of states, the federal government, their agencies and departments and legal precedents would be a disastrous oversight. Thus, the unending emphasis on education and scholarship. What follows is at best a skeleton, but its design is to offer readers a view of the world of insurance education that is not always apparent. A look at the major associations of insurance brokers and agents in the property casualty segments reveals their concentration on membership expertise: • the Independent Insurance Agents and Brokers of America (IIABA) • the National Association of Professional Insurance Agents (PIA National) • the Council of Insurance Agents and Brokers (CIAB) • the American Association of Managing General Agents (AAMGA) All deal extensively with education. IIABA and PIA National, in which many Rough Notes readers hold membership, have comprehensive programs on both the national, state and local levels. That means there are hundreds of sessions all over the country involving carefully selected experts and relevant subject matter. As readers know, these are managed by special committees of the associations and are scheduled and promoted, well attended, and productive. Additionally, the IIABA has its Virtual University providing such features as “Ask an Expert” that responds to technical questions. The IIABA VU also offers access to its extensive research library that includes major ISO and other vendor forms for study purposes, as well as a research library that includes policy form annotations and interpretations, illustrative coverage or claims scenarios, and access to “an extensive” number of articles. There is a section on business information, including agency management and a wide range of other topics. Information about the program is available at http://www.iiaa.org/vu/nonmember/information.htm. It’s well worth a look Another IIABA project is the established InVEST (Insurance Vocational Education Student Training). It now has 235 participating high schools and five community colleges in 30 states. According to the InVEST mission statement, the program “develops a diverse pool of insurance professionals and informed consumers by educating high school and community college students on careers in insurance, financial services and risk management, and encourages them to pursue careers in the industry.” It would be difficult to find a better way of assuring that there will be a steady stream of quality people wanting to join the business, many of whom already have had intern experience. The concept has always been sound and viable because it seeks out young people approaching career decisions, offering insurance as a real option. InVEST told me that once students have been exposed to insurance and the terrific opportunities that exist in the industry, they tend to explore those options in high schools, junior colleges or by taking summer or holidays jobs at agencies or insurance carriers. InVEST reports that 6,000 students a year go through the program. Next year, InVEST will institute a Web site where students can stay in touch and learn what’s going on in the industry, including job openings. Higher and higher Insurance education has reached highly professional levels, which virtually everyone in the business is aware of, and large numbers participate in. The CLU, CPCU, and CIC designations are certainly indications of scholarship, experience, and dedication. There are, of course, others, but they are more specific with regard to a specific segment of the business. I know I may be missing some, and I apologize for any oversight. The CPCU Society, which is the organization of those who have achieved the Chartered Property Casualty Underwriter designation, held its first annual meeting in Philadelphia on November 13, 1944, with 11 members attending. The society recognized its raison d’être just two years later by voting to set one day apart at annual meetings for a seminar on insurance subjects. Currently, nearly 4,000 attend annual meetings. At this point, there are an estimated 26,000 members of the society in the United States, Bermuda, Europe and Japan and there are 153 chapters. To get an idea of the educational impact, most chapters hold regular meetings, seminars, luncheons, and special events (including “I” Days). In addition, the chapters co-host—with the national society— technical educational workshops and National Leadership Courses. Each spring the national society sponsors the Annual Reinsurance Symposium, one of its most popular events. In 2005, there were multiple educational events developed by the society’s Consulting, Litigation and Expert Witness Section, the Regulatory and International Insurance Section, and the Agent and Broker Section, among others. It is interesting to note that the society’s membership includes many segments of the business, with more than 27% employed in the agency/brokerage business. The other sectors are difficult to break out, because of the dynamics of job changes. The examinations for the CPCU designation started in 1942 under the auspices of the American Institute for CPCU (AICPCU), which was founded at Wharton with Dr. Harry J. Loman, a well-known insurance professor, serving as its first dean. Today, AICPCU is based in Malvern, Pennsylvania, where it has merged its operations with the Insurance Institute of America (IIA). The institutes (AICPCU and IIA) function as a single organization providing numerous educational programs for insurance professionals in addition to constantly updating the CPCU curriculum to keep it current. The latest update was adopted in 2002. The institutes promote their programs to employers suggesting that those who pursue the programs become a more knowledgeable and productive workforce. As many readers are fully aware, employers often offer incentives for those who become applicants. To meet the experience requirements, candidates must have been employed in “suitable insurance or related activities” for any of 36 months during a 5-year period, immediately prior to conferment of the CPCU designation. They must also agree to be bound by the Code of Professional Ethics of the institutes. More than 70% of the students in the 2005 class of designees have an associate or bachelor’s degree and l5% have either a master’s, doctorate, or law degree. The exams are administered via computer in proctored settings. Though many years younger, Austin, Texas-based National Alliance for Insurance Education and Research offers its Certified Insurance Counselor (CIC), which has wide national acceptance. It operates through an institute, with requirements and examinations, but its designees must reconfirm. Its profile shows that of the designees, 78% are agents, and 22% are company personnel; 67% of the designees have college degrees and 12% of the CIC designees are also CPCUs. The emphasis on education, job integrity, and ethics, sets the insurance industry apart from most other enterprises. Leadership must make every effort to sell the idea of advancement through available educational facilities, both formal and informal, to keep the industry ahead of manifest changes that continue to arise. And those who have devoted their time, knowledge and experience for the greater good of their peers, including the staffs of the educational institutions, deserve the thanks and gratitude of the entire industry. * |
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