One of the biggest challenges facing the insurance industry is the graying of the work force. Industry studies show that the average age of an insurance professional is 54, and 60 percent of the workforce is now older than 45. Another alarming concern is that as much as 50 percent of our industry–including owners, producers, support staff, company executives, underwriters, loss control and claims representatives–is expected to retire within the next 10 years.
The industry also faces increasing concern over the impending retirement of Baby Boomers. A Baby Boomer turns 60 every 7 seconds. According to St. John's University School of Risk Management, approximately 50 percent of the insurance industry will turn over within the next 15 years. In other words, half of the industry's talent pool could be gone.
Other respected sources confirm the situation. According to the CPCU Society, 88 percent of CPCUs are 40 or older. A Conning Research study reported that 70 percent of company adjusters are over 40. A Deloitte Consulting report from a few years ago projected that the U.S. property-casualty industry will need to fill approximately 25,000 underwriting and 85,000 claims positions by 2014 (turn to page 24, "Recruiting Generation Y").
What makes this talent shortage even more significant is that insurance business isn't shrinking, but it is growing in terms of employment opportunities. For example, according to an A.M. Best Report, 23,500 jobs were added in one recent 12-month period alone. The career opportunities in insurance are also becoming more specialized and more technological, requiring high-quality skill sets.
Now that I've sounded the alarms, I offer a solution. The InVEST program has the potential to replenish our workforce before it's too late and may be the program that saves our industry.
Since 1970, InVEST has taught thousands of high school and community college students across the nation about the basics of business and insurance through its classroom simulations. Generations of independent insurance agents have grown with and benefitted from InVEST. The program has provided many a solid grounding before beginning college studies or starting a career and it's continuing to grow.
As a 501(c)(3) educational trust with the mission of improving insurance literacy and attracting new talent to the industry, InVEST provides insurance professionals with the opportunity to secure and cultivate the future of their own industry. The program provides young professionals from high schools and community colleges across the country with a support structure of insurance associations, a volunteer board, national staff, teachers and many industry professionals who work in the field as classroom liaisons.
In addition to providing schools with free textbooks and teaching curriculum, speakers and other resources, InVEST has an active scholarship program. In 2009, InVEST once again awarded scholarships to college-bound students pursuing insurance-related degrees. Along with direct contributions from independent agents and carriers, scholarships are funded through proceeds generated by the InVEST Silent and Live auctions held in conjunction with the Independent Insurance Agents & Broker's (Big "I") Annual Legislative Conference & Convention. More and more professionals and organizations in the industry are noticing and participating in InVEST projects. For example, three InVEST company partners (Westfield, Travelers and Hartford) have offered to print textbooks and the Travelers Diversity program is helping implement InVEST in various areas across the country.
The increase in InVEST programs launching at the community college and university level seem to be in response to two critical needs: 1) for trained talent in insurance agencies and companies, and 2) for career-focused curricula at colleges.
Community colleges are increasingly popular. Enrollment in 2-year institutions grew in the 1990s. The increasing cost of 4-year degrees has made community colleges an attractive option for many. The recent economic downturn also has prompted increases in community college enrollment and layoffs have also nudged some people to reinvent themselves in new careers. That rush of students has heightened demand for additional classes at these community colleges–and teachers and administrators are looking for turnkey programs that they can launch quickly.
The time is ideal for InVEST and the nation's community colleges to collaborate on training the next generation of insurance professionals. That effort is well underway, with some 15 community college programs in place and another half dozen in the works. In some cases InVEST is integrated into a broader curriculum; in others it stands alone. Some InVEST high schools are negotiating articulation agreements with local colleges to give their graduates a clearer path from high school to college to pursue their career goals.
Our challenge is to ensure we provide information and training to those who may want to pursue opportunities in the industry. If we work together and commit ourselves to InVEST, we can help replenish our ranks and secure the future of our industry. We at the Big "I" have pledged to continue to do our part.
I firmly believe that if we show young people the vast array of opportunities afforded by the insurance profession, many would consider it. At minimum, the need for financial literacy and the fact that everyone needs at least several insurance products makes this program worthy of every high school and college campus in the country. Everyone and anyone in the industry can help tell our story, train the incoming workforce and provide opportunities for young people. We need mentors, people willing to work and host job shadowing programs and internships, and volunteers to speak at high schools and junior colleges from every facet of the industry and in every state. The rewards far exceed the effort. Strengthening our workforce, enhance the future of our business, and providing our young people with financial literacy lessons are just some of the many rewards we reap with InVEST.
One of the biggest challenges we face is that many students just don't know about the variety of career opportunities available in the insurance industry. In addition to arming high school and college students with important financial literacy information, InVEST:
1. Provides work force training and brings new talent for carriers, agents and brokers.
2. Reaches a diverse group of employees, including urban and minority students.
3. Gets insurance professionals involved at the local level.
4. Promotes positive public relations, positioning the industry as a respected liaison between the academic and business worlds.
5. Produces knowledgeable insurance consumers.
A new generation is waiting in the wings that, with the right training, could be the generation that rejuvenates our industry. Approximately 100 million "Millennials" (those born between 1982 and 2002) will dominate the workforce by 2015. Although we're graying, the good news is that 55 percent of surveyed Millennials have said they would consider the insurance industry for a possible career.
We need to increase our efforts to replenish our workforce before it's too late and InVEST may just be the catalyst that saves our industry. This program holds the key to the professional survival and legacy of our industry.
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