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I. Professionalism in insurance
he pattern of training and education in the
industry bas changed significantly in recent
years, as managers and educators have
realized that the most fundamental requirements
for the future of the industry is to improve the
technical excellence of those who are asked to
conduct business fairly and intelligently.
Training is, of course, an amalgamation of planned
experience, specific instruction in general and
particular techniques, and also associated
education. A solid foundation of insurance
principles and practices, along with an
understanding of the economic, social, legal and
technological environ-ment, provides a framework
against which the current trend of this service
industry makes sense.
The need for highly qualified personnel has
resulted in an increased emphasis on education.
The connection between general education and
professionalism is vital both to the industry's
operations and to credibility with the public.
1. The image of insurance in the public
The insurance industry has been complaining of
the low profile of this branch of economic activity
in the public opinion. Many efforts have been
made to try to ameliorate the image of insurance
but with very limited results. Insurance remains a
"bad news" business.
Similarly, the negative attitude of students towards
insurance professions is a phenomenon that has
been demonstrated by numerous studies. One of
the characteristics of modem societies seems to be
the prestige associated with certain professions as
compared to others. Studies in the United States
and Canada (Outreville and Zins, 1984) have shown
Dr. J. François Outreville is Economies Affairs Officer
with UNCTAD in Ceneva. Former/y a lecturer on insurance in
universities in Canada, USA and France, he is a regular
contributor to insurance joumals.
The role of
insurance
education in
colleges and
universities
by J. FRANÇOIS OUTREVILLE
that students accord very little prestige to the
insurance professions (See Annex 1).
Equally unsatisfactory is the image of insurance
concerning the broader public in most countries
of the world. The fundamental reasons for such a
situation are certainly due to an inadequate percep-
tion of the real importance of insurance and of its
risk management role.
2. Management education
Most people enter the insurance business without
any knowledge of the economic, legal or social
background within which this industry works.
Consequently, many insurers offer their new
employees insurance-specific training programs
which are usually short in duration and tend to be
functional.
To operate a successful insurance organization.
the profound knowledge of techniques and
possibilities must be completed by a knowledge
of the financial. marketing, technological
environment and last but not least by acquiring
management skills to enable the creation of an
environment where the best people will give their
best.
Management education provides students with
basic or advanced management knowledge and
skills required for a wide range of managerial jobs
in unknown organizational contexts (management
education is not concerned with solving the problem
of a specific job or organizational unit).
II. Insurance education in colleges and univer-
sities
What should be the role of colleges and univer-
sities in promoting insurance education?
Insurance Journal December 1990 29
T
The insurance industry needs technically qualified
personnel developed by college and universities
(Business Schools or Faculty of Commerce) and
clearly, business schools programs are well
placed to help educate society about the nature
of risk and how the insurance industry works.
Recent developments in North American
academic institutions have raised many questions
about how collegiate insurance education is faring
and what its future direction will be. In particular,
some universities in the United States have
eliminated or severely curtailed their insurance
programs, or have even suggested that insurance is
not an appropriate academic area for business
studies.
What are the key factors to the success of
insurance education?
1. Industry support
One thing seems clear: insurance programs with
strong industry support are alive and growing.
Schools report that funding for faculty research,
chaired professorships and student scholarships are
critical for the success of these programs.
If students think that insurance is an unchallenging,
uninteresting, unrewarding field, the industry has
to provide them with more information on the role
and importance of insurance services in the modem
production System and on the career potential.
2. Risk management education
The other key factor is the curriculum. Banking
has in fact taken root in universities, even in
developing countries, because of the general nature
of the banking education which has universal appeal.
There has been a movement away from the
sector approach and toward a greater emphasis
on general concepts. Furthermore, the very
systematic nature of the modem economic
Systems and the increasing degree of the
complexity of technological developments
require a deeper economic understanding and
control of the increasing vulnerability and complexity
of these Systems.
Thus, the notion of risk and the management
of vulnerability and uncertainty become a key
connotation of the service economy. Rationality is
not so much a problem of avoiding risks and
eliminating uncertainty, but of controlling risks and
of reducing uncertainty to acceptable levels in given
situations.
The appropriate approach is a movement away
from the descriptive sector approach and toward
a greater emphasis on the concept of risk, risk
management and financial planning as they apply
to insurance.
III. A survey of insurance education in college
and universities in developing countries
Insurance education in United States' college
and universities is particularly strong and widespread
due to several factors, prominent among which is
the Huebner Foundation for Insurance Education
which supports research and doctoral studies in
the field of insurance. Surveys have been conducted
in the United States as far back as in 1927 and the
last one was produced in 1979 by the Huebner
Foundation. A similar survey was conducted in
Canada in 1981 and in Europe in 1976 and 1981.
These studies have given an insight into the impact
of insurance courses in college.
A recent survey was conducted by the UNCTAD
secretariat during 1987 and 1988 to request infor-
mation on whether or not insurance related subjects
are taught and on the problems encountered with
respect to the offering of risk and insurance education.
A letter and questionnaire were sent to 210
college and universities from 90 developing coun-
tries. Additional information was also requested
from 45 insurance institutes in developing countries.
Only 65 institutions (a rate of answers of 31%)
answered to our letter (see Annex 2). The major
problems to the development of risk and insurance
education were reported as being the lack of
financial resources (75%) and the lack of competent
insurance teachers (61%).
In some developing countries, attempts are being
made to popularize insurance subjects in college
and universities. In India, the University Grants
Commission has approved insurance as a core
subject for Bachelor of Commerce or Bachelor of
Administration degrees. The text books and study
courses for these programs are based on the study
courses published by the professional institute.
Similar cooperation between the industry and
the universities exists and joint programs have been
established like in Malaysia and in the Philippines.
Although full data are not available it is probable
that similar programs have been initiated in other
countries.
Generally, insurance subjects are conducive to
academic study and research. Universities therefore
have to establish liaison with professional institutes
either in their own country or with the assistance
of other countries. Dissemination of education and
research recognizes no barrier, political or
geographical.
So far, insurance education has not found its
rightful place in the educational pattern of schools
and college or universities but the necessary infras-
tructure and facilities to promote insurance
education are there.
30 Insurance Journal December 1990
Annex — 1
How college students rank two insurance occu-
pations
In a list of 83 professions evaluated and classified
according to the prestige attributed by the students,
the comparison between a survey conducted in
the United States and in Canada (Québec) produces
the following results :
Some professions Québec Rank USA Rank
Lawyer 9 5
Certified public 11 16
accountant
Civil engineer 12 12
Banker 22 30
Electrician 45 40
Carpenter 48 44
Travel agent 53 61
Insurance broker 58 40
Plumber 59 53
Insurance agent 62 61
Auto repairman 65 71
Policeman 67 56
It is very difficult to qualify prestige precisely.
and it is probable that each person has his or her
own attributes (scale of values). Students may also
have "inaccurate" perceptions of professions. A list
of 24 criteria characterizing various aspects of a
profession was submitted to the students for
evaluation. The characteristics considered the most
important are, by order, the following:
1. Feeling of accomplissement
2. Dynamic/exciting
3. Interacting with différent people
4. Challenging
5. Complex/non-routine
6. Use of creativity
7. Contribution to society
8. Good rémunération
9. Variety of tasks
10. Intellectuel reward
11. Opportunity for rapid advancement
12. High degree of professionalism
Annex - 2
Survey of insurance education in developing
countries
The current directory of world educational institu-
tions published by the UNESCO provided the
addresses of college and universities. The list
excluded institutions which apparently specialize in
subjects such as theology, agriculture, engineering
and the like. Reference to the study published in
1977 by the McCahan Foundation helped to finalize
the list.
No. of
answers rate
Africa and Middle East 60 23 38%
Americas and the Caribbean 54 11 20%
Asia and the Pacific 96 31 32%
Total 210 65 31%
Insurance institutes 45 14 31%
Answered to the letter 65
Completed the questionnaire 44
What are the major problems related to risk and
insurance education?
(more than one answer is possible)
Lack of financial resources 33
Lack of competent insurance
teachers
Increasing curricula emphasis
on general business 17
Lack of student demand 14
Scheduling problems 6
Reluctance to use
local insurance
experts as instructors 3
Lack of teaching and library material
Subject too new in the country 2
Annex - 3
List of college and universities offering
instruction in principles of risk and insurance or risk
management in the Faculty of Commerce/School of
Business Administration and the like.
Universities offering instruction in insurance law
only are not reported in this list. IJ
Insurance Journal December 1990
75%
61%
39%
32%
14%
7%
7%
4.5%
27
