School bells ring for insurance major
Local insurance pros spur Utica College to launch a degree-granting program
By Phil Zinkewicz
As baby boomers start to reach retirement age, and the next generation lacks the numbers to replace them, the insurance industry finds itself on the horns of a dilemma: How will insurers and agencies attract young talent, and how will the new talent acquire the appropriate training?
At a recent seminar on the future of the independent agency system, Mike Schroeder of the Westlake, Ohio, insurance consulting firm Roundstone put the matter this way: “The insurance industry has not done a good job of attracting young talent. This is going to be a major problem as the baby boomers are aging and moving towards retirement. The next generation will see a smaller work force, and the competition in the business world for young talent will be severe.”
Many insurers offer training programs for their agents, but they are geared toward the particular company’s operations. The CPCU and CLU and The National Alliance for Insurance Education and Research offer courses aimed at people who are already in the insurance industry. Just a handful of four-year institutions have degree-granting programs in insurance: The College of Insurance, The Wharton School, the University of Georgia, Temple University, and a few others. Hope may lie in more colleges launching insurance majors that will attract students to many different facets of the business.
That was the idea of Larry Gilroy and Richard Zick, seasoned insurance professionals who serve on the Utica College board of trustees in upstate New York, which, through the inspiration of these two men plus insurance interests in the Utica area, recently introduced a major in risk management and insurance.
Gilroy is on the agency side of the business, a partner in Gilroy, Kernan & Gilroy Insurance located in New Hartford, New York. Zick is a company man who is president and CEO of Utica First Insurance Company.
Persuading school officials to recognize the value of having an insurance major at the college was not an easy task, the men say; in fact, it was about 10 years before the Utica board decided to take the giant step. In the fall of 2008, Utica College will begin offering a full four-year program in risk management and insurance. (At press time, the college is waiting on final approval from the New York State Education Department.)
Utica College’s history dates back to the 1930s, when Syracuse University operated extension courses in the Utica, New York, area. Utica College was established thanks to the efforts of business and community leaders in the Mohawk Valley when they saw the need for such an institution. Syracuse University launched Utica College in 1946 and continues to offer the Syracuse University degree to undergraduates through a unique academic agreement with the university, although the college became a financially and legally independent institution in 1995. Since 1998, the college has offered graduate degree programs and has plans to expand its master’s degree offerings in the coming years. The new B.S. degree in Risk Management and Insurance will be one of the first Utica College undergraduate degrees.
Utica enrolls roughly 2,500 full- and part-time undergraduate students, and 523 full- and part-time graduate students. The college offers 32 undergraduate degrees in more than 60 areas of study. In addition, it offers 13 master’s degrees and two doctoral degrees, including programs in business administration, economic crime management, education, liberal studies, occupational therapy and physical therapy.
Dawn of a new era
Gilroy says that the idea for introducing a risk management and insurance major to Utica College came to him and Zick at about the time that Todd S. Hutton, Ph.D., came on as president a decade ago. “Almost suddenly, dramatic changes were taking place,” says Gilroy. “New buildings were going up on campus. A new multi-sports stadium was built. New intercollegiate sports were being added, such as football, ice hockey and water polo. Fifteen new graduate programs were being added. The profile of the college was being changed in the community, and a fundraising campaign was started. It was a rebirth, and Utica College had set out to achieve a new dream. Richard and I felt the time was right to push for an insurance major.”
“It took some time for college officials to recognize the viability of insurance as a major,” says Zick. “For a long time, the board was concerned whether the college could generate enough students to justify the new major. We had to do a good deal of convincing.”
Gilroy and Zick began bringing the board pertinent statistics, such as:
• The total number of people employed by the insurance industry as of September 2006 was 2,305,000, according to the federal Bureau of Labor Statistics.
• Total gross premiums paid to the insurance industry worldwide during 2005 were $3.25 trillion.
• Entry-level salaries for account executives at risk management firms can run as high as $80,000 per year for highly qualified candidates.
• Median annual income for actuaries was $76,340 in May 2004.
“Slowly, we began to convince the board that Utica is a hub of insurance industry activity and that the insurance companies and agencies in the area would support our concept,” Zick says. “We showed them how Utica College could obtain financial aid for its risk management and insurance major, plus internships for its students.”
Gilroy is quick to point out that he and Zick were not lone voices crying in the wilderness. Early on they had the support of the local insurance industry. In addition to Gilroy and Zick, the risk management and insurance advisory committee includes Chris Taft and Dan Robinson, presidents of Preferred Mutual Insurance Company and New York Central Mutual Insurance Company, respectively, “who helped drive the program from concept to birth,” Gilroy says. “Cynthia Hummel and Eve VandeWal, both executives with Excellus BCBS (Blue Cross/Blue Shield) and members of the advisory committee, helped launch the risk management and insurance concept at Utica College and bring a great perspective coming from the benefits side of the industry. Excellus has approximately 6,000 employees in upstate New York and is the dominant health insurance market there.”
A major development in this scenario was the appointment of Dr. Pamela R. Hurley as director of risk management and insurance programs at Utica College, who developed the curriculum for the new Risk Management and Insurance degree. She came to the college as a full-time faculty member in 2006 after serving as the manager of quantitative analysis and head of portfolio risk at MCP, Inc., a private alternative investment company in New York. She was also previously employed by Ayco Company as a financial consultant. She earned her MBA and Ph.D. from Rensselaer Polytechnic Institute and holds a dual B.S. in finance and risk management and insurance with a minor in French from the University of South Carolina Honors College.
Dr. Hurley’s areas of research and academic interests are risk management, insurance, financial planning, derivatives for risk management, alternative investments and hedge funds. She also is the faculty advisor for the Utica College chapter of Gamma Iota Sigma Professional Risk Management and Insurance Fraternity.
“Our goal is to reach out to high school students to let them know the varied opportunities that exist in the risk management and insurance sectors of the business world, and then convince them that we at Utica College are prepared to help them achieve those opportunities,” says Dr. Hurley. “The students won’t just be taking courses. They’ll have the opportunity to network with other full-time and part-time students, with faculty advisors and risk management and insurance executives from the local community.”
Benefits of the major
Dr. Hurley, along with Dr. John H. Johnsen, dean of the School of Business and Justice Studies, were given the task of completing a feasibility report for the major in risk management and insurance. In that report, they listed benefits of establishing the major. These included:
• Attracting some students who otherwise would not have come to the college.
• Establishing an anchor for the further development of a close working relationship with the insurance industry. This would be achieved through the use of internships, student placements and continuing education opportunities for working insurance professionals, and special events and programs to engage the insurance community.
• Providing enhanced career potential for Utica College students.
• Expanding and complementing the existing array of management courses.
• Adding another member to the management faculty who will be academically qualified for accreditation purposes.
Both Hurley and Johnsen are realistic about the need to take a long-term view of the development of this new major. Their report notes: “The enrollment projections are being kept modest for planning purposes. Coupled with the fact that recruitment costs for the faculty position and the faculty salary will be significantly higher than the average for the college, the program will operate with a deficit for the first several years. We project a total five-year start-up deficit of about $330,000. After that, revenues from enrollments will allow a small profit that will increase over the next several years. The college has already begun a fundraising effort with the local insurance industry to cover the start-up costs for the program. That effort has already resulted in donations and pledges in excess of $375,000, more than covering the projected shortfall. Fundraising will continue in support of program, faculty and scholarship endowment, specialized space and expansion of the co-curricular activities.”
Says Gilroy: “Dr. Hurley has done a marvelous job in bringing this program together. Our next step is to market the program, to take it to the high schools and communicate the career opportunities in the risk management and insurance industries. The athletic recruiters are out there recruiting. So too are the technology people. We have to do the same thing, and at the same time communicate to the insurance industry in our region that we need their support and that they need the potential talent out there.”
For more information:
Utica College
Web site: www.utica.edu/rmi