CPCU Society, Facing Declining Enrollment, Enters a Different Era
By CYRIL TUOHY, managing editor of Risk & Insurance®
Perhaps it's a little early to say whether the CPCU Society has reached a turning point, but this is a year that bears watching for the venerable organization that represents holders of the Chartered Property Casualty Underwriter designation.
The society, founded in 1944 is facing declining enrollment. Perhaps one could overlook the lessening membership numbers, given the society's reputation for the thoroughness of its professional education programs in the property/casualty niche, and for the code of ethical conduct it requires of its members.
The situation is so serious, in fact, that "if nothing changes, we will have just over half as many members as today with half the revenues by the end of 2014," wrote Warren L. Farrar, immediate past president and chairman of the CPCU Society, in a letter to members last fall.
The declines are a reflection of "nonretirement defections," wrote Farrar. "When lapsed CPCUs were asked why they did not renew their memberships, 52 percent indicated their employers were withdrawing their financial support."
That figure, derived from a survey conducted in 2010, represents "a significant increase" from 2007. In addition, the percentage of respondents rating the CPCU a good value was only 42 percent, the survey found.
"As a society we have not communicated the value proposition to the agent and broker community, to the global brokers, to the superregionals, and at the local level," said CPCU Society President and Chairman Steve McElhiney, in an interview Monday, Feb. 27, with Risk & Insurance®.
"The agent and broker niche is one where additional strategic focus is required to provide improved services to a broad based community of global, regional, and local agents and brokers," McElhiney said, to a follow-up question via email.
The focus upon agents and brokers isn't a sign that the society is ignoring the other segments, as the society is "expanding technical content to all CPCUs," to "continue providing a broad-based insurance education," to all professionals operating within the property/casualty segment, he said.
The survival of the society isn't in danger -- far from it, McElhiney said. More than 25,000 strong, the society isn't going anywhere.Earning the CPCU designation automatically admits designees into the society. Membership is renewed annual, and it is those renewals what that have been falling, said a spokesman for the CPCU Society.
But with 65 percent of members over the age of 50 indicating they plan to retire by the end of 2014, the society's operating model needs to change as it comes under competitive pressure from other insurance trade organizations and a changing industry.
A vote by members last fall to formalize the society's affiliation with The Institutes (previously known as the American Institute for CPCU and Insurance Institute of America), is but the latest example of the change in the business model, as the society competes with other organizations conferring more narrowly focused continuing education designations.
In the last few years The Institutes has offered more options in response to the needs of the marketplace. Options include continuing education and online learning.
The Institutes' Associate in Risk Management, which debuted in the 1970s, was followed a few years ago with the Associate in Risk Management for Public Entities, and then the Associate in Risk Management -- Enterprise Risk Management.
For brokers and consultants, The Institutes offers the Accredited Adviser in Insurance designation.
"Risk has been redefined in the new Enterprise Risk Management environment in this 'New Normal,' " McElhiney wrote in a blog post dated Feb. 26."The ability to identify and mitigate emerging sources of risk is a key opportunity area for producers -- both large and global players, as well as regional and local firms. A deep capability of skillsets for the producer is more critical now than ever."
And it's the agents and brokers the CPCU Society now wants to reach. More than 643,000 strong, the agents and brokers comprise by far the largest segment employed by the U.S. property/casualty industry, according U.S. Bureau of Labor Statistics employment data.
In addition, the agent and broker segment has the largest number of women and minority-owned companies compared with the carrier, third-party administrator, claims adjuster and reinsurer segments, the data shows.
So it makes sense for the CPCU Society to target agent and broker members with more technical offerings, and to reach out to younger prospective members through social media channels and opening offices abroad.
In doing so it would be changing to address a more competitive landscape. There are now more educational organizations targeting agents and brokers with professional designations. The Austin, Texas-based National Alliance for Insurance Education and Research, for example, offers the Certified Insurance Counselors program designation targeted at brokers.
March 6, 2012
Copyright 2012© LRP Publications