Risk Education In-Depth Series (Part 2): Replenishing the Talent Pool
College students with insurance and risk management degrees are in high demand right now.
"It's becoming a hot field," says Ellen Thrower, executive director of the School of Risk Management, Insurance and Actuarial Science at the Peter J. Tobin College of Business at St. John's University in New York City. "The job market is very strong and growing."
New internship opportunities are multiplying so rapidly that there are just not enough students to fill all of the new positions that are being created. Any student that is qualified has a job, and there are still positions that are going unfilled, Thrower says.
After their summer internships are over, many of the students receive full-time job offers and most have a job lined up before graduation.
"All of our undergraduates are employed by the time they leave the institution," says Robert J. Smith, executive vice president of Willis North America and the chairman of the education committee at the St. John's School of Risk Management. "Anyone who wants a job has got a job."
Although Smith was speaking specifically about the students at the St. John's program, the same seems to hold true for students at other schools as well. Students with an insurance or risk management degree and the ability to present themselves well are not sitting around waiting for job offers.
"It is becoming more and more popular because it's a career field that's still wide open and growing, and as our boss has often said, it's kind of the DNA of capitalism, so it's not going away," Smith says.
This rosy employment picture does not seem to be in too much danger--at least not yet--in spite of a downturn in the economy and a crisis in the housing and financial markets. Although some employers may be forced to lay off employees and scale back their hiring plans in the coming months, long term there is still going to be demand for fresh talent.
One of the key reasons behind the rising demand for these students is that, over the past few years, many companies have been seeking to expand their enterprise risk management capabilities. This commitment to enterprise risk management is fueling new job opportunities.
"We are seeing a growing number of noninsurance, nonfinancial services organizations who really understand that risk management has become a top strategic priority," Thrower says.
Those companies are looking to the top risk management programs to provide them with people who have an understanding of the latest developments in enterprise risk management.
"I think this is just going to increase because every significant organization beyond insurers and financial services needs to be paying attention to risk management," Thrower says.
RECRUITING, NOT RAIDING
In addition, some insurance industry employers say they realize they need to bring in new talent because they will be facing a brain drain in a few years.
"We know that workforce planning is going to be a huge issue as the baby boomers start to exit the corporation for retirement," says Beth Pelling, director of early career development at Aon.
In the past, many companies acquired their talent by raiding their rivals, and they did not spend very much time recruiting students on college campuses.
But that has begun to change over the last few years, according to a number of companies.
"Our industry has been one that, up until the last few years, really hasn't done a great job of bringing university hires in," says Charles Silla, senior vice president for human resources in charge of talent acquisition for ACE USA.
"We really kind of traded talent across insurance companies, and all companies now are finding the need to replenish that talent pool," Silla says.
ACE noted that the poaching game only works well for a while before it starts to become very costly.
If someone is "making $65,000 at a desk at AIG, they will want to make a lot more than that to sit at a desk at ACE. Otherwise, why would they come?" says Dave Wisniewski, senior vice president for human resources for ACE USA.
"So to mitigate that, we've invested in building those folks," he says. Now that the revised program is in its third year, "we're really starting to see a good flow of young talent that will be the future of ACE," he says.
Travelers sees the same dynamics at work.
"We recognize that in a couple of years, baby boomers are going to get ready to retire and that it's leaving a whole brain drain and a huge gap," says Carlos Figueroa, director of university relations at Travelers.
"So we realize that college recruiting is the way to go because it's not only going to be a feeder to our key positions but it's also building that pipeline," he says.
The brain drain hasn't hit yet, but industry employers say they realize that now is the time to prepare.
"It's really an investment in our future," Aon's Pelling says. "We certainly aren't losing headcount at this point, so we're not looking for people to replace jobs, but we're planning for the future," she says.
This all spells opportunity for college students. The starting salary for entry-level jobs will vary, of course, from one region to another and from one company to another.
But the average starting salary for undergraduate students graduating from the School of Risk Management at St. John's was $57,000 in the fall of 2007, up more than 10 percent over the previous year, Thrower says. For graduate students, the average starting salary was $62,500.
In their recruiting efforts, insurers and brokers say they are targeting specific schools that have strong risk management programs.
Although they were reluctant to rank one school over another, some schools most often cited by industry employers included St. John's School of Risk Management, as well as the risk management programs at Temple University, Georgia State University, University of Georgia, Illinois State University, the University of Wisconsin, the University of Connecticut and the University of Pennsylvania.
"One of the most encouraging things we've seen over the last several years is the emergence of full-fledged, credentialed, risk management programs that provide carriers and brokers students coming out of university with well-rounded backgrounds and interest and an exposure in our industry and in many cases an internship in our industry," ACE's Silla says.
"Back when I was in school, you sort of got into insurance by accident," Silla says. "There were no insurance majors. You came out with a finance degree or a history degree, and you knew somebody and you got in."
When deciding where to recruit, companies often tend to work with schools that are located at one of their main offices.
"Part of our strategy as far as the schools that we select is the location relative to some of our offices," says Bridget Cirelli, manager of college relations at The Hartford. It can be hard for offices that are in smaller cities like Hartford, Conn., to compete with companies in big cities like New York City.
"We tend to do well with local schools where people may have some sort of tie to this area," Cirelli says. "The University of Connecticut has a risk management major, and we've had a lot of success there, not only with underwriting and sales roles but actuarial as well," she says.
Industry employers say they also recruit at some of the country's other top business and liberal arts schools, such as Northwestern University, Cornell University, Wake Forest University, University of Southern California, Rutgers University, Villanova University and Penn State University.
When it comes to the risk management school's curriculum, they want students to read case studies and get a taste of the real world in addition to having textbook preparation.
"In terms of what we look for in an insurance risk management program, we look for a curriculum that is heavily based on case studies, that promotes and utilizes real-world experiences or industry experiences as learning tools for the students," says Shawn Tubman, director of university relations at Liberty Mutual. The company also looks for "programs that are closely aligned with the business school versus the humanities school," he says.
"We feel that really provides students with solid foundation, and at end of the day, students have to understand how we make money and market our product," Tubman says.
While the schools' academic programs are important, companies also consider other factors, such as the diversity of the student body.
Insurers stress that they are focusing more of their recruiting efforts on having a diverse student population because they want students who have had some interaction with people from different cultures and backgrounds, who can bring new ways of thinking to the table and who will be comfortable in a diverse setting.
"We don't go to schools if they don't have a diverse population," says Valerie Aguirre, senior vice president of talent acquisition at Chubb. "It's not what we're looking for."
They also want students to have at least a general understanding of the global nature of the business world and an ability to think about issues from an international perspective.
BEYOND THE B.S. IN RM
Does a risk management degree really make a difference? Does it really help students get a foot in the door with the major insurance industry employers? The answer from throughout the industry was a resounding "yes."
A risk management degree gives students an edge because they are already familiar with industry terminology and with much of what the industry does. They are considered more advanced than entry-level hires and are able to jump right into their new jobs.
"We feel students that have a risk management insurance major when graduating from school are more aware of the industry," says Liberty Mutual's Tubman. "We have found over the short-term, in the first few years, those students hit the ground running," he says.
That often means these students can command a higher salary upon graduation.
"The students coming out of this program (St. John's) receive a premium entry-level salary because they already understand the language, they already understand the major contracts and, because of their internships and cooperative education, most of them already have a significant amount of practical experience," Willis' Smith says.
"It's the equivalent to eliminating the first couple of years of on-the-job training," he says. "They're very attractive to employers."
Employers also say they believe the degree shows that the student has a higher degree of commitment to the industry than someone with a generic business major or some other kind of degree.
"Even more than the information they get in the classroom is that, if someone is going to choose that major, they're obviously interested in it," says The Hartford's Cirelli. "So you already have them somewhat engaged because they have an interest in risk and insurance, so that's appealing to us."
Students who have a risk management degree have also had a chance to get a taste of what a career in the industry might be like.
"If they have not gone through an insurance program, then it's hard for them to tell if they are going to like working in the insurance industry," says Chubb's Aguirre.
While the risk management schools are a good source of new underwriting, actuarial and risk management talent, the industry also needs people in other areas as well. Insurance companies and brokers need loss-control experts, lawyers, finance experts and people who have a deep understanding of certain specialized business sectors.
Business and finance majors are in demand for a variety of corporate positions. Engineering majors are in demand for positions in loss control.
In very specialized areas of insurance underwriting, it also may be more helpful for employees to have a strong background in that particular field of business.
The aerospace underwriting unit at XL Insurance, for instance, usually hires people with aeronautical or aerospace degrees ahead of risk management majors. In that highly specialized unit, hiring managers are seeking out graduates of schools like Embry-Riddle Aeronautical University and Florida Institute of Technology.
The view in some of these specialty areas is that it is easier to teach insurance to a rocket scientist than it is to teach rocket science to an insurance underwriter.
"The specialty world tends to employ individuals who have backgrounds in the specialty before they necessarily employ people with general insurance backgrounds," says Christopher O'Gwen, senior vice president for XL's U.S. aerospace operation.
"So I think a lot of times you tend to see the insurance educations come after the specialty education," he says.
ROOM FOR GROWTH
Insurers say they are generally pretty happy with the quality of the risk management graduates coming out of colleges today. But although the schools are doing a good job giving students the right academic training, students are sometimes lacking in other important areas.
Some of the biggest problem areas have to do with the students' ability to communicate and relate to people who are not their peers. They are also having trouble understanding how to write in an appropriate style for business.
"I think what we're missing the mark on is how do they integrate with the generations that are already in the workforce," Aon's Pelling says. "I think that's a key gap that students are exiting the university studies with is having the ability to manage the perceptions of themselves, with their managers and the leaders of the organization," she says.
"I think the other thing we are finding that universities are kind of missing the mark on is the business writing piece," Pelling says. "We're having to do a lot of coaching on that when folks enter the workforce," she says.
Other common problems include students who come to job interviews poorly prepared. Insurers recounted tales of students showing up late for interviews. Some students came to job interviews completely unprepared and unfamiliar with their prospective employer and the industry.
Some students had terrific resumes, but then fell apart during the job interviews.
"We are still finding that students are graduating or looking for internships and their resumes are not up to par," Figueroa says. In other cases, they are not doing well in interviews. "We do a lot of prescreening over the phone, and students are not prepared," he says.
"We're providing that feedback to the schools because I think career services plays an integral part in ensuring these students are ready," he says.
Travelers has been getting involved with the schools and developing programs to help students better understand certain basic skills, such as how to research a company, what types of questions they should be asking in interviews and how to be better prepared.
By cultivating these relationships with the academic world, industry employers are hoping to find a fresh pool of employees who can be trained and groomed for leadership positions within their organizations.
"I think there are more opportunities in insurance today than before, but we still have to do a better job in dispelling the myth that insurance is boring and it's not that you have the briefcase and you are selling door to door," Figueroa says.
It's a field where there are plenty of opportunities for people who have strong analytical skills, the ability to form good working relationships with people and are able to communicate well.
It is also a field, however, that is often overlooked by students in search of a more glamorous industry, like investment banking.
"Insurance is so far off everybody's radar screens," Chubb's Aguirre says. "What we have to do as an industry is to educate, and what we have to do as an industry is work with those colleges so that we can sustain their momentum so that we can continually get our students from them," she says.
"There's lots of careers within the insurance industry, and they are so viable and exciting for that right individual, it's just getting the word out there," she says. "I don't think one would call insurance a glamorous industry, but the careers are phenomenal."
lives in New Jersey.
May 1, 2008
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