Carriers Boost Education Dollars, Embrace High-TechLearning

In this uncertain climate of conflicting economic trends, manycorporations are still carefully watching what they spend, cuttingout the fat wherever possible. But when it comes to education andtraining programs, many insurers say they are boosting their budgetdollarsor at least maintaining their current spendinglevelsaccording to an upcoming study from the Society of InsuranceTrainers and Educators and interviews by NationalUnderwriter.

Another big trend is the increasing use of high-tech deliverysystems such as the Internet in the training process, supplementingtraditional classroom teaching to create a “blended” learningexperience, according to experts.

Training managers at the Hartford Financial Services, forexample, have been busy building infrastructures for their onlinelearning programs during the past couple of years, said JohnMadigan, vice president of corporate staffing and education at theHartford, Conn.-based insurer. “We havent cut back in educationalspending,” he said.

Mr. Madigans department provides educational services for some29,000 Hartford employees around the country. “We orchestratespecific training on behalf of the company. We also dodegree-development programs, reimbursements and bonuses forprofessional designations.” He said that Hartford also offerstuition reimbursements for courses that meet businessrequirement.

And now, the company offers what it calls “CorporateUniversity,” a Web-based depository of learning resources,classroom materials and white papers available on “every Hartfordemployees desktop around the country.”

“In our Corporate University, we have thousands of courses, andwe constantly get feedback on the quality of these courses,” Mr.Madigan said.

He said that, at Hartford, up to 50 percent of training is nowdone online. “The percentage has increased from a couple of yearsago. Before, there were more people stepping into classrooms. Now,more people are also learning through the Web, especially fieldemployees,” he said.

According to a new report, many insurers are taking a similarapproach, enhancing their training programs and adding morehigh-tech delivery systems.

In an exclusive preview of an upcoming study from the Society ofInsurance Trainers and Educators, “one big finding is that despitethe current economic times, most insurers have increased ormaintained their training and educational budgets,” said PatriciaMcCarthy, president of the San Francisco-based group, which hassome 600 members from insurance companies and educational-servicesvendors.

“We are finding that training personnel are very, very busythese days,” she said. The biggest challenge for training staff,according to the survey, is managing their increasing workloads,she said.

Ms. McCarthy said that in its survey of 62 insurers47 from theproperty-casualty sector26 carriers said their education budgetsrose over the past couple of years and 20 said their budgets havedropped, while 16 said theirs have stayed the same.

“So budget increases are now outpacing budget decreases,” shesaid.

“In the past, training and education expenses have come underthe knife,” noted Robert Hartwig, chief economist at the InsuranceInformation Institute in New York. But now, he said, “its clearthat for companies to restore and maintain profitability, all theheavy lifting has got to be done by quality underwriting andpricing,” which, he added, leads to insurers emphasis on effectiveemployee training and education.

“When a company rolls out some new underwriting program orclaims-adjusting program, it has to train its adjusters andunderwriters so everyone can be on the same page,” Mr. Hartwigsaid.

Furthermore, p-c insurers are also continuing to show strongsupport for professional and continuing-education developments,reimbursing their workers for related classes and materials andoffering bonuses, according to the Society of Insurance Trainersand Educators survey.

Ms. McCarthy, who also serves as director of training andeducation at Northbrook, Ill-based Allstate Insurance Company, saidinsurers showed their strongest support for the Chartered PropertyCasualty Underwriter designation, followed by graduate degrees, andthen Associate in Risk Management and Associate in Managementdesignations.

One example of companies encouraging continuing education andprofessional designations is American Family Insurance Group, whichhas partnered with various local universities, including theUniversity of Wisconsin, to hold evening classes at its Madison,Wis., headquarters for those studying for bachelors or graduatedegrees among some 8,000 employees.

“Our education division is the central point where we make sureeducational and training programs are developed and delivered,”said Ann Hamilton, vice president of education at AmericanFamily.

One significant trend that the survey revealed was theincreasing use of high-tech systems to supplement traditionalteaching in brick-and-mortar classrooms. Insurance companies, Ms.McCarthy said, are still relying heavily on traditional methods,such as in-class training, self-study and workbooks. But insurersare also using computers and CD-ROMs, as well as Internet andIntranet delivery systems, to help train their employees.

By incorporating such systems, insurers can deliver trainingmaterials online to workers prior to classroom meetings, allowinginstructors to focus more on complex discussions, while condensingoverall training time. This can cut down the class duration andadministrative costs, and also eliminate travel expenses for fieldpersonnel.

Insurers are also using Web-conferencing and video-conferencingsystems to reach out to their workers. Over half the companiessurveyed reported using Web-conferencing for educational purposes,Ms. McCarthy said. “The usage has surged in the past couple ofyears.”

Training through video-to-desktop is also getting attention, sheadded. “That's still the newest technology. However, mostcompanies' current infrastructures and bandwidth still can'tsupport it. But it's going to increase substantially in the nextfew years.”

Stephen Anderson, the immediate past president of the Society ofInsurance Trainers and Educators, also commented on the survey,saying that “there has definitely been more use of technology andWeb-delivery recently.” He said classroom training wont go away anytime soon, because individuals want one-on-one interaction withinstructors

So what companies are doing is “supplementing classroom teachingwith other high-tech delivery methods, in a really big way.”

Mr. Anderson added: “This is what they now callblended-learning. This is the big trend.”

The Society of Insurance Trainers and Educators survey also saidcompanies continue to outsource at least part of theirtraininghiring vendors to develop and deliver programs and eventeach courses. Overall, 50 insurers out of 62 surveyed said theyoutsource some training, with 16 companies outsourcing more, 21insurers doing less, and 25 staying at the same level, compared toa couple of years ago.

“In the p-c industry, many companies consider methods they usefor handling claims and underwriting practices to be proprietary,so they develop and use their own materials for those. That hasntchanged,” Ms. McCarthy said. She said that insurers feel morecomfortable outsourcing training on general topics such asleadership skills and computer-skill developments.

A number of other carriers that spoke with NationalUnderwriter said their education-and-training spending remainsstable or even rising.

“I think we saw a lot of cutbacks a few years ago,” said RalphGoode, claims senior vice president at Ohio Casualty Corporation inFairfield, Ohio. “For us, there was a period in 2000 where we hadsome reduction in in-house training efforts. But since then, wehave gradually built them back up,” Mr. Goode said.

“We certainly want to be judicious about how we use our expensedollars,” he said. “But whats been happening is the realizationthat we need to invest in our employees and their development.”

Mr. Goode said his company offers specific training programs foreach of its business linesworkers compensation, property, auto andcasualty claimsand more than half of the companys 2,700 employeesuse in-house training each year.

“A lot of trainings are developed internally, and we alsoencourage employees to get involved in college or graduate degrees,as well as professional-designation work,” he said.

Ohio Casualty is also taking a big step to incorporate the Webtechnology into its training programs. Beginning next year, theinsurer will offer online training coursesaccessible from anyoffice desktopthat all its employees will be required to take.

“The first course is an ethics training course. We are alsocurrently developing several online training programs withdifferent business units,” said Jo Majors, training manager at OhioCasualty. When this mandatory Web-based training goes into effectin about a month, “online education will account for about half ofall educational programs at Ohio Casualty,” Ms. Majors said.

“This is one way to economize. Web-based training can helpdeliver training in a cost-effective way and even reach remoteusers who work out of their homes,” she said.

Cincinnati Financial Corporation is another major insurer thatsbegun to actively utilize Web-based training. “We meet the needs of3,600 associates in 31 states and also do some agent training forour 960-some independent agents,” said Mark DesJardins, director ofeducation and training for the Fairfield, Ohio-based insurer.

He said there have been no cuts in the companys trainingprograms, but his department has still been enjoying some costreductions by using a “more blended approach to training, by addingWeb-based programs.”

“When we use the Web-based training, it is typically more of apre-requisite to coming into the classroom. Its not designed toeliminate the classroom, but to enhance it,” Mr. DesJardinssaid.

His company has been developing its own online materials andbuilding its own Web-based content for the past year, he added. “Itgave us an opportunity to reduce classroom time, reduce travel forfield personnel and reduce expenses associated with them,” hesaid.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, December 5, 2003.Copyright 2003 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.