Rewarding Life

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What an absolutely ideal week to be wrapping up my mini-series of blog posts on the Ferris State RMI program’s tagline:  Practical Education, Flexible Career, Rewarding Life

We have enjoyed unseasonably spring-like weather for a Michigan February, with abundant sunshine (most days) and temperatures rising into the sixties.  As if that weren’t enough, this was also the week of the Michigan Association of Insurance Agents annual convention, which I attended along with several of my current RMI students.  As we talked with many of the hundreds of insurance professionals at the convention, a common theme was how rewarding their careers have been in the insurance industry.  We talked with a few who said that they’ve only been in the industry since their 30’s and expressed regret that they didn’t discover the RMI career path in their 20’s.  That speaks volumes.

Rewarding Life… I looked up the definition of “rewarding” and found “providing satisfaction; gratifying.”  There are a number of ways that we humans can be satisfied.  Money, security, prestige, service to others, fulfilling experiences, and the list goes on.  Each individual defines their level of satisfaction and gratification according to their own personal values, and most people seem to derive satisfaction from a combination of things in balance with their values.

Over the course of the MAIA convention, my students heard a variety of personal stories from seasoned industry professionals that all boiled down to the same principle:  They’ve had (and have) a very rewarding life in an industry that has been very good to them.  What does that mean? As I wrote in the previous paragraph, it means different things to each person, but I can tell you (based on my own experience) what it means for many who work in the RMI industry.

It is a lucrative career, if you want it to be.  I personally know many RMI professionals who are well into six-figure incomes. I can’t complain in the least about my fiscal rewards over the last 30 years.  It is a very stable industry that has provided job security and stability.  The industry is diverse and always evolving, so RMI professionals are constantly learning, growing, and doing different things each day.  For example, you’re constantly learning about different insureds’ operations – it’s like a neverending episode of the Science Channel’s “How It’s Made” television show.

You meet the most interesting and smart people from all walks of life, and you have the opportunity to attend fantastic events and visit wonderful places.  My own RMI career has given me the chance to spend time in Hawaii, India, and Australia, just to name a few.  In terms of fulfilling experiences, while working on a project in Australia, I spent a Sunday afternoon sailing on Sydney Harbour, passing under the iconic Harbour Bridge and past the Sydney Opera House.  I had no idea that my insurance career would provide such an incredible opportunity when I began as an underwriting intern so many years before.

Last but not least, there is great satisfaction that comes from helping other people.  The insurance industry is entirely about helping people to live securely, and to pick them up when they are down.  Let’s be honest here, the news media loves to cherry-pick the instances when an insurance company denies a claim or there appears to be some sort of injustice.  The reality is that the insurance industry helps millions of people proactively by recommending and providing insurance protections that provide stability and peace of mind, and then gets them back on their feet at the worst moments in their lives.  You ask any insurance agent or claims professional about the most rewarding aspect of their work and inevitably they will share a story about a claimant to whom they delivered a check and provided comfort during the darkest time of that claimant’s life.

Now imagine all of the aforementioned sources of satisfaction aggregated over the course of a 40 year career.  That makes for a truly rewarding life.

 

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Flexible Career

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Practical Education, Flexible Career, Rewarding Life.

Last week, I posted about the practical education element of the Ferris State RMI program’s tagline.  In the continuing spirit of Insurance Careers Month, I will discuss the flexible career aspect this week.  I’d like to begin by highlighting one example of insurance career flexibility: me.

I was one of the many “accidental” insurance professionals who stumbled into a commercial underwriting position fresh out of college.  A few years later, I moved into a risk management role with a large retailer.  Applying my interests and aptitudes for technology, I eventually started my own consulting practice where I worked on several Fortune 500 risk management information system projects.  An opportunity came along to develop a system and process for tracking certificates of insurance, and an entirely new business was born.  Over the course of ten years, I was able to grow and then sell that business, and then pursue the bucket list objective of earning a doctoral degree.  Shortly thereafter, Ferris State revived its RMI academic program and began searching for a lead faculty and program coordinator, and here I am today.

Over the years, I’ve talked to countless risk and insurance professionals, some who intentionally entered the industry and many who discovered it accidentally.  I am always intrigued by the unique stories of these career arcs.  They are always a fascinating story of career evolution that starts in one area of the industry and then twists and turns through a variety of different roles, opportunities, firms, and locations.  Many in the industry have had the chance to live in some wonderful places, including overseas.  Here in Michigan, insurance professionals can work in the metropolitan areas of Detroit and Grand Rapids, or near the exquisite shorelines of Grand Haven and Traverse City, or in the pristine wilderness (and sportsman’s paradise) of the Upper Peninsula.  The key takeaway from my and many other stories is that a risk and insurance career is not stagnant, but rather it allows for evolution through a number of interesting, challenging, and meaningful positions in a variety of locations.

A flexible career has another meaning besides career path mobility and opportunity.  Numerous articles describing the desire for workplace flexibility have appeared in recent years, particularly when discussing the Millennial generation.  However, I believe that this desire for flexibility is not unique to the Millennials.  In this age of instant, always-on communication, I think we all value the ability to work from anywhere we wish, and at the times that we wish.  Technology certainly supports our ability to be productive from our home office or even from the bleacher seats as we watch our children and grandchildren play sports.  The risk and insurance industry offers this type of flexibility.  Many professionals are now based out of home offices.  Field personnel who do loss control or claims work often schedule their own appointments.  I’ve spoken with many insurance agents over the years who treasure the ability to work in the office during the morning, have a client meeting over lunch, spend time on a family activity during the afternoon, and finish up their day with a little work in their home office.  The next day’s schedule may look entirely different – it’s up to them.

Let me be clear.  There is work to be done.  I don’t intend to paint a picture of insurance professionals spending all of their afternoons on the golf course,  During my consulting days, I traveled 50-75% of the time and I was away from my young family more than I cared to be at times.  Nevertheless, the work was always interesting, never boring, and I always had a degree of control over when I scheduled projects.  On the whole, I have enjoyed a tremendous amount of flexibility and variety in my risk and insurance career, and you can too.

 

Practical Education

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February is “Insurance Careers Month” during which risk and insurance professionals make a concerted effort to highlight the industry’s career opportunities for young people facing a myriad of academic and professional choices.  A few years ago, when Ferris State University revived its storied risk management and insurance academic program, we re-engineered the curriculum and co-curricular opportunities for the 21st century.  As the new program took shape, I sat down with an advisory board sub-committee to craft a tagline for the program that would capture its essence and the potential that it offered students:

Ferris State University Risk Management and Insurance:  Practical Education.  Flexible Career.  Rewarding Life.

 In the context of insurance careers month, I decided to break this tagline down and discuss each of its component parts over the next few weeks.

“Practical Education” is not just lip service – it’s part of the Ferris State DNA.  The school was founded in 1884 by Woodbridge and Helen Ferris as Big Rapids Industrial School.  A review of the school’s history clearly demonstrates a focus on teaching practical skills that prepare students for gainful employment and successful careers in fields where workers are needed.  To this day, Ferris offers programs in such fields as Heavy Equipment Technology, Welding Engineering Technology, Plastics Engineering Technology, Pharmacy, Optometry, and yes, Risk Management and Insurance.  All of these are fields clamoring for young, educated talent.  The Ferris State mission and core values clearly emphasize the practical nature of a Ferris State education.

The new Ferris State RMI academic program has been designed from the ground-up to provide this practical education.  Our students learn the foundational concepts of the risk management process, insurance coverages, insurance law, and terminology.  But that’s not all.  The reality is that in many fields, a significant portion of the technical knowledge a person gains in school will be obsolete within ten years of graduation.  The truth is that the technical learning continues well beyond college graduation, and in fact, never really ends.  Insurance coverages will evolve with emerging risks such as cyber-risk, and who knows what comes next in the 2030s, 2040s, and beyond.

At the heart of our practical education is an emphasis on experiential learning, adaptable degree programs, and development of timeless skills.  Practical education means that our students will complete internships where they go to work in the “real world” of risk and insurance.  It means they attend industry conferences where they are exposed to emerging industry issues and begin building a professional network.  It means that they participate in co-curricular activities such as Gamma Iota Sigma.

Practical education means that students complete the foundational RMI courses and then have the opportunity to draw a variety of other courses from across the University to complete their degree and to suit their interests and career direction.  Interested in becoming a cyber-security/cyber-risk expert? Take a few of our information security courses.  Interested in predictive analytics for risk and insurance? Take data analytics and data mining courses.  Interested in the agency side of the business? Take our agency operations course along with a few small business management courses.  Examples of practical tailored education abound.

Practical education means that students learn and practice the skills that every employer seeks.  The RMIN 489 capstone course includes units, exercises, and activities in such areas as critical thinking skills, logic, problem-solving, and collaboration, to name a few.  Just next week, the RMIN 489 students will be addressed by an industry veteran who will be coaching them through several case studies drawn from genuine situations from the realms of underwriting, claims, sales, and risk management.  The cases we use in this course are not canned textbook cases – they are real-world (with names changed to protect the guilty/innocent) situations for which there is rarely “one correct solution.”  The intent is to exercise the students’ problem-solving and analytical skills as they evaluate each case against the foundational risk and insurance knowledge they have gained.

This is real-world stuff.  This is a practical education.

What a Riot

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For most of my adult life, riots were such a rare occurrence that the phrase “what a riot” was a way of saying “that was a lot of fun.”  Over the last few years, and especially the last few weeks, the term “riot” has no connotation of “fun” about it.  Well, at least not to sane people.  I’m sure some of the riot participants think they are having a grand ol’ time as they destroy the property of others and inconvenience people.  In fact, as best I can discern, many of the rioters seem to think they are engaged in a noble and patriotic activity.  Were they remaining peaceful and not destroying property, I would likely agree that their protest is noble.

I could get all political here, but I won’t. Except to say that it is clearly one particular side of the political spectrum causing all of the chaos right now, and it is supposed to be the side that espouses its belief in tolerance, peace, love, and freedom of speech.  Yet, the latest violent riot in Berkeley, California was intended to (and successfully did) prevent controversial libertarian Milo Yiannopoulos from speaking.  The violence and hate on display among these rioters was truly ironic – and the rioters themselves seem to be totally blind to the irony.

The relevance of the increasing frequency and intensity of riots to risk management and insurance is clear.  Insurance coverage is typically afforded for “riot and civil commotion” in most homeowners and commercial property insurance policies.  Soft markets notwithstanding, insurance underwriters have to be taking a harder look at locations they are insuring and evaluating the potential for riots.  Major population centers and especially colleges and universities are of particular concern these days when it comes to riot loss exposures.  Risk managers in areas where protests may evolve into violent riots have their hands full right now, and need to be talking with local law enforcement about plans to protect property and personal safety.

Whatever happened to the nobility of peaceful, non-violent protests? We just celebrated Martin Luther King Jr. Day to remember his accomplishments that were brought about through peaceful protests and the open expression of ideas as encapsulated in Dr. King’s I Have a Dream speech.  The riots, and the rioters are disgraceful, not noble.  And they are costing us all dearly in the form of increasing insurance costs and even more so in the form of dividing us more deeply as a nation.

Incidentally, it’s been awhile since my last blog post.  It was a busy autumn.  That’s my only excuse.  I’ll try to get back to a more regular posting schedule in 2017.  I’m sure there will be plenty of risk and insurance material to cover.  Stay safe and sane out there folks.

Hard Lessons of the Louisiana Floods

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Louisiana, and particularly Baton Rouge, was hit by severe flooding last month.  The photographs of destruction and displaced families are heart-wrenching.  Unfortunately, with the election season ramping up to full throttle, the devastation of Louisiana is already being crowded out of society’s attention.  Ordinarily, I would expect that relief agencies and compassionate individuals ought to have the situation well in hand, and that insurance mechanisms have kicked in to help the flood victims rebuild their lives.  Everything working as it should, the flood damage is sad and inconvenient (to put it mildly), but the situation should be manageable.  Time to move on.  Next crisis, please.

But that’s not the case.  Oh, it is true that many of us have moved on to other things… the circus that is our election season, the arrival of the college and pro football seasons, even the next big storm as tropical storm Hermine makes her way up the U.S. east coast.  But the situation in Louisiana is not under control.  Many people have literally lost everything… their homes and their possessions.  So why hasn’t flood insurance done what it is intended to do by helping these people rebuild their lives?  Because more than half (55%) of the state’s residents living in high-hazard flood zones did not purchase flood insurance.  Even worse, 88% of those living in low-to-moderate hazard zones (which were affected by this particular flood) did not buy flood insurance.  One Baton Rouge resident said, “You think, ‘I’ll never need that, I’ve never seen water come up this high.’”

The best that these uninsured residents can hope for is a FEMA grant with a maximum amount of $33,000, and perhaps a low-interest federal government loan to rebuild.  For many, that just won’t cut it.  By the way, this isn’t just a problem for those who have lost their homes and possessions, it is also a problem for society that faces the prospect of hundreds, perhaps thousands, of blighted properties.

This is not a call for a massive government bailout of these unfortunate individuals, nor is it a call for tighter regulations that would make flood insurance mandatory for even the slightest exposure.  My major concern is what is going on in the minds of these property owners that would cause them to act seemingly irrationally by foregoing flood insurance?  With several public service announcements broadcast on behalf of the National Flood Insurance Program to raise awareness of the exposure and the NFIP solution, ignorance does not explain it.  It seems more likely that the sparse flood insurance purchases are a manifestation of the old saying that “you can lead a horse to water, but you can’t make him drink”  (no pun intended).  The average cost of flood insurance for Louisiana homeowners is around $700/year and would have covered up to $250,000 on homes and $100,000 on personal property.  That’s not an outrageous expense, to protect the most significant asset that most people own.

So why didn’t more people have flood insurance?  The “it-can’t-happen-to-me” attitude should have been swept away by hurricane Katrina, super-storm Sandy, and many other weather events of recent memory.  I don’t have the answer, and it pains me because I love the power of the insurance industry, its product, and its people to move into disasters such as this and put people’s lives back together.  When the people in need of the help fail to take the minimal steps (relatively speaking) to protect themselves by securing the powerful insurance mechanism for their own benefit, I feel for them and I long to send them back in time so that they might make a better choice.  Unfortunately, they will have to serve as hard lessons to those who still have time to make that better choice, and prepare for disaster by securing the proper insurance.  I only hope that the next victims of flood, fire, windstorm, hail, etc. are watching and learning from the despondence of Baton Rouge.

Back to School

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Next week marks the beginning of a new academic year at Ferris State University, and it is going to be a busy one.  The FSU Risk Management and Insurance program officially launches a re-engineered curriculum this fall.  One of the most important features of the updated curriculum is a 15-credit block wherein students will tailor their education (with academic and professional advice) to suit their interests and aptitudes.  Some students may decide to enhance their RMI degree with an area of emphasis in data analytics by completing coursework in data mining, statistics, and predictive analytics.  Other students may focus on risk management by adding coursework in advanced risk management, enterprise risk management, and risk management technologies.  These are but two examples of potential specializations which might also include other areas such as cyber-risk, entrepreneurship, agency operations, and more.  Fun stuff!

Earlier this year, the Ferris State RMI program launched a strategic planning process.  The bulk of the committee’s planning work is now complete.  Execution of the strategic plan is already underway, and will be an ongoing process over the next few years.  This will result in considerable activity both inside and outside of the academic classroom, adding to our students’ success and strengthening the program for future students.

On a personal note, I am beginning my fourth year in academia this fall.  After spending the first 25 years of my career working in and around the risk and insurance industry in a variety of roles, I can honestly say that the past three years have been the most intrinsically rewarding years of my career.  But what really excites me is what I see ahead.  Ferris State has established a fantastic foundation for the RMI program, the risk and insurance industry is eager to hire ambitious graduates, and now we just need to fill more of the seats.  It is going to be a busy and exhilarating year.  Let’s get started.

Davy Jones’ Locker

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Meet Mr. Dave Jones, California’s elected insurance commissioner.  “Elected” is important in that opening sentence because that inherently makes the regulation of insurance in California a political activity.  As is typical in current California electoral politics, Mr. Jones is from the left side of the political spectrum, and seems particularly sympathetic to the green lobby.  Witness his concern over insurance company investment portfolios that dare to include any companies that derive 30% or more of their revenues from fossil fuels.

Mr. Jones has made waves in recent months by asking that insurers doing business in California provide an annual accounting of their fossil fuel investments. Although he has graciously stated that divestiture in such assets is voluntary, he warned that insurers who do not divest themselves of fossil fuel firms will be publicly identified and subject to examinations due to the concern that such assets might damage the insurer’s financial health.  Giving Mr. Jones the benefit of the doubt, it’s possible that he is simply reading the not-so-subtle tea leaves of political statements such as Hillary Clinton’s admonition that “we’re going to put a lot of coal miners and coal companies out of business.”  If that political ambition has a genuine chance of being realized, then yes, there is a concern that such investments on an insurer’s balance sheet could impede their long-term claim-paying ability.  But this smacks of a chicken-and-egg conundrum… is Mr. Jones acting as a prudent regulator of insurance companies, or is he currying political favor with his fellow leftists to propel his own political ambitions and to eventually lead to the realization of a crumbling fossil fuel industry?

The cynic in me leans toward the latter.  There is another effect of this action that concerns me.  California does tend to be out in front of (and often alone) the rest of the country on many left-leaning political initiatives.  Many of the insurers doing business in California also do business in other states.  If the California Insurance Commissioner takes it upon himself to manage the individual investments in an insurer’s portfolio to advance a political agenda that is not directly related to the business of insurance, is that not usurping authority from the other 49 insurance commissioners?  What’s a national or regional insurer to do if all 50 state insurance commissioners begin picking favored and dis-favored industries for their regulated insurers to hold in their investment portfolios?  Couldn’t the Michigan insurance commissioner take a similar approach toward Silicon Valley tech companies since there has been talk of another tech bubble inflating?

We all like to assume that our elected public officials truly have the best interests of their constituents at heart when they exercise the authority of their office.  Unfortunately, I think we’ve witnessed increasing evidence that many such actions taken in the last 10-20 years have been politically motivated and self-serving.  My instinct tells me that this is the case here with California’s chief insurance regulator using his authority to sink fossil fuel investments deep into Davy Jones’ Locker – not for the good of insurance companies or customers, but for the advancement of his own political agenda and ambitions.