Business Insider: Want a secure job? Bet on insurance

Insurance isn’t the sexiest college major, but savvy students with a bent for business know the numbers are in their favor.

The average age of an insurance agent is 59, according to a recent survey by McKinsey & Co., which expects about one-fourth of those in the industry will retire by the end of 2018.

But the industry isn’t just agents. It will need to replace nearly 72,000 claims adjusters, about 29,000 underwriters, 8,500 software developers and programmers, and nearly 7,000 actuaries over the next seven years, according to the U.S. Bureau of Labor Statistics.

A college freshman who majors in insurance will graduate into a wide open job market.

“There is a huge talent shortage coming in the insurance industry,” said Zach Finn, a Butler University clinical professor who directs its Davey Risk Management and Insurance Program. “And the industry has done a terrible job of selling itself.”

Finn’s an example of what’s possible in the business. A 2000 graduate of Indiana State University’s well-regarded insurance program, Finn interned at NCR Corp. and worked at Hillenbrand Industries, before landing in risk management for J.M. Smucker Co. At 27, he was about half the age of typical corporate risk managers, but he also recognized it was a sign of the coming need for talent in the industry.

Risk managers spend their days ensuring insurance coverages are adequate, facilities are safe and secure, and potential disasters are mitigated. When a well explodes in the Gulf of Mexico, for instance, risk managers take center stage.

Finn learned, too, that risk management can contribute directly to a company’s bottom line. When Smucker bought Folger’s in 2008, seller Proctor and Gamble provided the estimated costs to insure warehouses in New Orleans, among other places. Finn and the others at Smucker figured out ways to shave several million dollars off of those estimates, while improving the insurance coverage and safety of those warehouses.

Heady stuff for people who typically show up when something bad has happened. Now Finn and his colleague, assistant professor Jill Kirby, are showing students there is a future in insurance. There are 50 insurance majors in Butler’s program, a whopping number given the program is just 31/2 years old.

“When we look at what the market needs, there is a gaping hole,” said Stephen Standifird, dean of Butler’s College of Business. “We believe if we build (the insurance program), they will come.”

All Butler’s graduating insurance majors are finding jobs, he said, and most have multiple offers for positions that pay at least $50,000 right out of the gate. “The demand is huge,” Finn said, “and the supply is comically low.”

There about 60 insurance programs at universities across the country, including ISU and Indiana University. Given the BLS numbers, demand for graduates with insurance education will remain strong for years.

That doesn’t mean universities are just counting the tuition of new insurance majors. Butler’s starting an insurance company that will be run by students and Finn’s betting the experience will give his students an edge.

Butler students already manage a $2 million financial endowment, so the university’s comfortable with the experiential approach to learning. “There’s no reason students with the proper setup couldn’t manage an insurance company,” Finn reasoned.

A $250,000 gift from MJ Insurance and its founder, Michael M. Bill, will seed the company, which is expected to be fully operational by the 2019-20 academic year. Bill and his son have built an agency on the Northside with about 125 employees, so they understand first-hand the industry’s coming talent deficit.

“Butler has consistently graduated students from the College of Business more prepared to enter the workforce due in large part to their interest in experiential learning,” noted MJ President and Chief Operating Officer Jon Loftin in a prepared statement.

The insurance company will insure risks at Butler, possibly everything from the life of the school’s famous bulldog mascot, Butler Blue III, to fender benders involving university vehicles. Students will identify and assess risks at Butler, and then determine whether it’s better to retain them — pay for losses with cash — or insure them through the insurance company.

That means students also will have to figure out how to write policies and coverage terms, how to finance the company and how to manage the details, like accounting and investments.

These are things Michael M. Bill had to learn through experience as a young man, so he’s glad to provide the minimum capital necessary to form the insurance company.

“It will be not only rewarding to the students that graduate,” noted Bill, who founded his agency 51 years ago, “but will provide them with a livelihood and personal reward every day that they are in our industry.”

It’s an industry with a rich heritage in Indianapolis. Insurance has been a cornerstone of commerce here for more than a century and remains vibrant. Given the growing need for talent, it’s likely a lot of Butler graduates (and those from ISU and IU) won’t have to wander far from campus to find good jobs.

John Ketzenberger is president of the Indiana Fiscal Policy Institute, a nonpartisan and nonprofit organization to research state budget and tax issues. Email him at jketzenberger@indianafiscal.org. Follow him on Twitter: @JohnKetz.