Nanostockk /
14 June 2019Analysis

Captives industry cannot expect to be found, it must engage with students

In an open letter to the insurance industry in 2015, the CEOs of Aon, Lloyd’s and Hamilton Insurance Group lamented the future of the industry. The letter spoke of 400,000 retirees from the insurance industry by 2020, a 25 percent decrease, and only 4 percent of millennials interested in the industry.

They referred to insurance as the career trifecta: stable, rewarding and limitless. Baby-boomers retiring, generation X aging, and millennials uninterested was the theme. What to do?

Let’s not lose sight of the fact that people working in, and leaving for retirement from, the industry, frequently said they “literally fell” into insurance. A phrase never heard was: “I always wanted to work in insurance growing up.” More often than not, it was “I needed a job”; “my father was in insurance”; or “the investment bank wouldn’t hire me”. But today’s insurance industry and, more specifically the captives segment, is not your father’s insurance industry, as they say.

This is the story that must be told, and it needs to be told on university campuses: beyond the aging and retiring workers, the demand for insurance products and risk management expertise is ever growing and changing. Climate change, artificial intelligence, terrorism, cybersecurity—the varied and sundry risks faced by society, businesses, and individuals are significant. However, there is not a talent gap; there is a failure to communicate. The workforce and expertise are there—you just need to find them and tell them what you have to offer.

Access to talent

The captive insurance industry needs to access the talent. There are approximately 20 million students now enrolled in college. These students are much more tech-savvy than any prior generation; they are more diverse and more progressive; they are seeking meaningful work, and high on their list of priorities is work-life balance. As the cost of a college degree has skyrocketed, these students are graduating with historic student debt, so they need financially secure, stable jobs. The captive insurance industry can provide everything these students seek.

So what’s the problem? Perception over reality—it’s the ‘I’ word: insurance. “It is boring” is the number one response when I ask students what they think about insurance. If insurance equates with boring, captive insurance sounds downright sinister.

The experience that most college students have with insurance is that they have to pay car insurance. Couple that with the seemingly never-ending debate over health insurance in the US; add television and online advertisements focused on a green gecko; the odd Flo; and the non-personality of Brad—suffice to say, the insurance industry has done little to portray itself as an employer of choice.

All is not doom and gloom, however, and progress has been made. Vertafore’s Millennials in Insurance survey, published in 2018, showed some improving statistics. While 21 percent of millennials had changed jobs in 2016, more than three quarters of those surveyed had been in insurance for more than three years and were generally better paid than their counterparts in other industries.

Sixty-five percent cited work-life balance as the major benefit of working in the insurance industry. Compensation and financial security were a close second, followed by the ability to work creatively and to work with people in the community.

Perhaps even more promising from that survey is that 97 percent of respondents said they were somewhat or very optimistic about the industry attracting new talent, a 10 percent increase over the prior year’s responses. Eighty-seven percent said they would recommend a career in insurance, and 72 percent said they intended to stay in the industry.

Find your audience

How do we keep this trend going? If you want to affect the future, you need to engage in the present, and you need to be where the audience is. The captive insurance industry cannot expect to be found; it must go to the supply source and engage with them.

The good news is that you will be welcomed with open arms. Experiential learning is not simply a buzz phrase of higher education. Instructors can stand on their heads and extol the wonders of a career in the captive insurance industry, but without the “real story” from an industry professional, it remains a classroom experience.

The onus is on the insurance industry to rewrite the story and, for captives, quite simply to start telling the story. If a tree falls in the forest and no-one is around to hear it—well, captives, almost nobody knows you are there. If you scan an introductory insurance textbook of a few hundred pages, you may find a page or two devoted to telling the story of captives.

“Where shall I go?” you ask. There are over 50 American colleges and universities with dedicated risk management and insurance (RMI) programmes and that number continues to grow as higher education recognises the industry’s needs and makes efforts to adapt and expand programmes to address them.

The International Risk Management Institute’s May 2019 Directory of Risk Management and Insurance Programs highlights 49 undergraduate RMI programmes, including four new ones since last year’s publication.  One can easily access information, including faculty contacts for RMI programmes, at any of the colleges and universities from this list. Call them, email them, introduce yourself.

The vast majority of these colleges and universities have a Gamma Iota Sigma (GIS) chapter, the international insurance, risk management and actuarial science fraternity. GIS has over 5,000 student members and there are GIS chapters at 75 colleges and universities.

GIS provides resources for both students and industry. One event is the annual fall conference and career fair, attended by students and faculty advisors as well as industry participants who can showcase their organisations, recruit talent and meet with RMI faculty, students and GIS leadership. There are numerous educational sessions for students.

This would be a very worthwhile event for captive insurance industry participation. Likewise, there are smaller, regional events throughout the year, as well as the virtual career fair which coincides with Insurance Career Month (February).

Personalised opportunities exist for captives industry professionals to support their local college and university programmes and students and, in turn, cultivate relationships that lead to recruitment opportunities for your organisation. The success of any RMI programme is dependent on industry support, which does not go unnoticed by faculty, administrators and students.

The captive segment of the insurance industry may very well be the most innovative, creative, dynamic and diverse. This reality needs to be understood by students who, if properly mentored and supported, would welcome employment within the captives industry.

Cultivating relationships with RMI faculty and GIS faculty advisors is perhaps the best way to initiate. Guest speaker opportunities, informal meet and greets, employer of the day sessions—the opportunities are there.

Careers and support

One of the best ways to convince college students to work for you is to show them what they can achieve. It is one thing for a seasoned professional to speak to students at a university; it is even more powerful for that experienced operator to bring a young professional to campus. Students want to see their future, but are more interested in seeing their immediate future as opposed to 20 years down the road.

This is a generation that has been raised on insta-everything. So travel to your RMI programme of choice and bring along a young professional member of your organisation, or invite students to an informational session at your offices.

Financial support of these RMI programmes is also vital. The largest and most successful RMI programmes are those significantly funded by industry. Beyond scholarships (which are always welcome), financial assistance which allows students to attend industry events, such as the Captive Insurance Companies Association (CICA) conference, levels the playing field for students who do not have the means to attend such events otherwise.

It is laudable that CICA sponsors a student essay contest, and invited the three team finalists to present at their annual conference. Opportunities such as these, where undergraduates can interface directly with industry professionals, can be life-changing for students.

Participation at professional and industry events provides a window into the real world that cannot be duplicated in the classroom. These occasions can seal the deal for students contemplating a career in the captives segment. Businesses and organisations that financially underwrite these opportunities for students must understand that this is not simply a donation—it is a vital investment in the future of the industry. In that regard, it is actually self-serving. Advocate for these types of opportunities with your professional and industry affiliations.

Internships are another critical link between academia and the real world. Students eagerly apply for internships and recognise the importance to future employers as well as to their own education. Providers should expect to pay interns and internships should provide meaningful experience, support and feedback for students. Very often these internships result in an offer of employment post-graduation. This can be a win-win as employers can determine over the course of a summer whether the student is a good “fit” for the organisation.

If an internship is not feasible, organisations may offer mentoring or job-shadowing opportunities for students interested in the captive insurance industry. These one-on-one experiences can be very important for students, and are of little consequence in time or money to the providers.

Those of us from other generations, whether it be baby-boomers or generation X, are often critical of the millennials. But lest we forget: they are a generation that has grown up with technology, been endlessly tested at school, seen terrorism in their own backyards, and lived through a financial recession.

They now are poised to deal with climate change, cyber breaches, growing terrorism and a plethora of emerging risks that they did not create. The captives industry would be wise to support, mentor and encourage their participation in the industry. They are our best resource.