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Insurance Business | 30 Jun 2015, 08:46 AM Agree 0
As debates swirl around education in the industry we reveal the findings of a recent poll and a leading CEO has his say.
  • Mike Sullivan | 30 Jun 2015, 09:36 AM Agree 0
    Agree entirely we are breeding a group of academics that can not communicate, build relationships or aspire to having business savvy. It is a by the book digital methodology.
    We are not creating a desire in these people to excel in soft skills and talent. In fact I have staff that avoid making a phone call and send emails, the voice is more influential than the key board!!
  • Just an Observer | 30 Jun 2015, 09:47 AM Agree 0
    Wonder how many of the 150 professionals involved in survey actually have a degree? And are under 50?

    I am 60 and have had a Dip in Bus Ins (from old Prahran college which I understand is now equal to a Degree) had a Fellowship since 1976.

    Education is the foundation stone to raising the level of professionalism in the industry. But only if it is supported by ethics and common sense.

    On the job training & Mentoring are vital to building on the technical knowledge gained in the class room.

    One without the other is just not a long term solution for the industry.

    Having said that, the young Turks coming into the industry with degrees need to understand that a degree is the first step in what can be a long and fulfilling career.
  • Higher Standards | 30 Jun 2015, 10:14 AM Agree 0
    The insurance industry needs to raise the bar. We need to stop being the fall back for people who haven't got any tertiary qualifications and can't get a job in any other industry.

    Would you see a lawyer for legal advice if they didn't have a degree? Would you see a doctor for medical advice if they didn't have a degree? Why do we have people in the insurance and finance industry that only have a diploma? A diploma that is really quite easy to obtain.

    The current barriers to entry are far too low, and it shows in daily dealings with the industry. 'Soft skills' are fine, but you need solid foundations in technical knowledge to properly carry out your job. As a broker, you're giving advice to a client; they're relying on you to know what you're talking about. As an underwriter, you're either dealing direct with the client, so you're in the same position as the broker, or you're dealing with brokers, and you still need to have an in depth knowledge of business, risk, and in pretty much all cases, the law.

    If insurance wants to be taken seriously as a profession, as opposed to a junketing necessary evil, then we need to increase our professional standards beyond that of used car sales.

    A degree isn't the be-all and end-all, but it is a solid starting point. If more universities offered insurance based business degrees, then we would have a greater opportunity of increasing the education standard for the industry.

  • John | 30 Jun 2015, 10:28 AM Agree 0
    I have a degree so this isn't an issue for me either way. I can't agree with the assertion that a degree is irrelevant nor am I convinced it has to be mandatory. We need to find a middle ground but still improve skills beyond the current regime.

    My business studies degree has helped me enourmously as an insurance broker. But that being said, I don't think it should be absolutely mandatory, particuarly for people already in the industry.

    The degree helped with obvious things when dealing with clients such as accounting helping with BI calculations. But also less tangible concepts that the degree touched on such as basic law & ethics. This academic rigour helps with dissecting policy wordings & structuring & presenting information to clients.

    The solution ought to be insurance qualifications that are more relevant to what an insurance broker actually does. When I did my tier 1 qualification, I leant virtually nothing, it was just a box ticking exercise.

    There needs to be more product content in the qualifications, if a broker deals with PI, they need to understand the quirks. The current courses don't have any of this. There should be a degree standard qualification as the ultimate goal so that people can keep studying.

    The courses also need to be harder, it should be set at a level where some people fail. Currently, the qualifications are too easy to pass & too much help is given to those who struggle.
  • Mike Sullivan | 30 Jun 2015, 10:28 AM Agree 0
    I agree yes Doctors Dentist Lawyers Accountants , what you are missing is these crafts all have specific tertiary course and have on job training internships, and doctors have to do registrars duty.
    We in our industry do not have the specific EDUCATION DEGREES FOR INSURANCE.
    Frankly our industry education standards and methods are appalling. The facts being we as employers do not have a great choice other than a broad based Business or IT degree to choose from.
  • Mike Sullivan | 30 Jun 2015, 10:43 AM Agree 0
    I agree with a more stringent regime, on reflection when I did my then Diploma and Associateship, we studied from text books, for a range of streams accident fire and liability, we had past exam papers to assist and we sat for a written examination in a class room.
    You were awarded a pass mark the old fashioned ABC or F This was an incentive to improve your self and study harder, I wish I had never thrown out my old institute study books as after 40 years I can still see the pages that explained so much about insurance, policies, risk and terminology and rating factors. I would if I had them train my own staff from them.

    This is what we are missing
  • Scott R | 30 Jun 2015, 10:53 AM Agree 0
    I agree with Mike - our current education is poor and varies significantly between training organisations. We have enrolled a large number of people into Tier 2 & Tier 1 courses as our company brings a lot of new entrants to the industry by aiming at graduates or existing sales staff. Depending on the company, what those employees are taught varies a distressingly large amount.

    I think rather than mandate a 3 year university bachelor, that we instead review our current education system and correct that.

    Building on this idea of a 'Bachelor of Insurance' there are 3 reasons I do not like the idea.

    (1) I know that there is an ongoing comparison of brokers to lawyers, dentists & doctors. While it is true we all provide important advice people rely on, there is also a difference in fees & payment. Businesses that require a 3 year university degree all pay +$100K, while brokers and underwriters look more in the $50-80K bracket.

    (2) To impose a 3 year delay (in the form of an expensive university course) to get into a $50-80K job will not 'raise the bar' of brokers - it will limit the number of brokers (those who study poorly, those who need money in the next 3 years, and those who do the financial math & decide to become a lawyer instead). By removing a large number of brokers, it will increase the market share of the direct insurers - which in turn would reduce the standards of the industry as a whole.

    (3) But most of all - if we impose a mandatory degree on brokers, there needs to be consistency. That would require the course applies to ALL insurance professionals, including insurance companies & insurance ARs (such as strata managers, coles staff, bank staff, car dealerships, travel agents, telstra staff & more)
  • Bob | 30 Jun 2015, 10:53 AM Agree 0
    Some of the best most dedicated people I have worked with started out of school with no degree behind them and are now senior people in the industry.

    I laugh at those people with degrees who have no practical skill in adapting and applying what they learned during their degree.

    Too often we get caught up in the process rather than what do we need to do to fix this?

    Those level entry jobs that I came in on in 1976 are slowly going overseas by stealth and until that changes we will struggle more as an industry to develope people to have long term careers in insurance.
  • PD | 30 Jun 2015, 11:11 AM Agree 0
    I so agree with John!

    As a 'Gen Y' who has completed the Insurance Diploma and a Business Degree in the last 5 years - the Business Degree has been invaluable and there are so many aspects of my job that I have found it to be beneficial and would recommend most people do.

    The diploma....what a joke that was.
  • Peter | 30 Jun 2015, 11:38 AM Agree 0
    Today I am retiring. I entered Insurance in 1959 and I have worked in it ever since. After reaching Director Level while working for International Brokers, I founded my own Business which, almost 36 years later employs over 50 people.

    I never attended University and, of all the people that I have employed over the years, only 1 has had a Degree. I have never stopped studying Insurance and Risk Management and, probably never will.

    Some of the best 'Insurance people' that I have known, were 'dropped out apprentices' who were prepared to get their heads down; take exams and work hard. They all received on the job training and were well prepared for any promotion they earned.

    If a Degree had been a pre-requisite of getting into Insurance, the Industry would never have benefited from their efforts and dedication.

    I agree that current education requirements are too low - but only from an 'Advancement' perspective. I provide thorough 'on the job' training; set development programmes and mentor my employees.If a junior (or senior) member of staff wants to aspire to advancement, then it is up to them to convince me that they are capable, and competent..

    It is hard enough now to find good staff. I shudder to think how difficult it would be if I demanded a Degree before considering an applicant.
  • Mike Sullivan | 30 Jun 2015, 12:03 PM Agree 0
  • Just another observer | 30 Jun 2015, 12:21 PM Agree 0
    I do not agree with 'Higher Standards' comments.

    Yes, the insurance industry needs to raise the bar.

    I agree, University degrees are needed for some high end roles.

    However, I am very critical of university degrees and feel they are over rated - you get a degree for being able to read books, pay a lot of money, invest years of learning and get titles after your name for the privilege. Just think about the number of young people out there now with degrees, some with the wrong degree, no jobs and huge debts to repay. What a waste!

    On the job training and mentoring is a far better option. The problem is getting companies to commit to this - not just say it and then do nothing to help their employees.

    David Lamb's recommendation of providing staff with a “personal business coach”, is a fantastic idea and worth pursuing.

    Other companies have done this very successfully. These employees went on to become insurance managers with good grounding and fantastic soft skills.

    By completing on the job training, mentioring and / or provided with a "Professional Business Coach", employees will be in a better position to know if further development is required. They will be in a position to makes informed decisions, ie if they want to undertake a university degree or not and choose the correct course to study.

    They will not wasting time and enegy getting university degrees to no where, with not job prospects!

    I know people who have 2 or 3 university degrees that managers rave about, but they just answer phones at an insurance call centre.

  • Ben B | 30 Jun 2015, 12:31 PM Agree 0
    Scott R, your comment of:
    "(1) I know that there is an ongoing comparison of brokers to lawyers, dentists & doctors. While it is true we all provide important advice people rely on, there is also a difference in fees & payment. Businesses that require a 3 year university degree all pay +$100K, while brokers and underwriters look more in the $50-80K bracket"

    What about all the arts degrees and business degrees that take 3 years, and have people starting out in $40k (or less) roles? I know a number of people with various majors in business degrees that have more than 10 years experience and are only in the $80-100k bracket. A degree on it's own doesn't equal big dollars, unless it's something very specialised (law, medicine etc). Experience and ability in the job is what will lead to a quality career. Education is the starting point.

    It's also not just about what you learn at uni, but the processes and ways of thinking/learning that you pick up. Critical analysis, research skills, basic business concepts etc. People often forget that a bachelors degree is only a level 7 on the Australian Qualifications Framework. It's the starting level which gives a broad and coherent knowledge of the subject matter. Further education in the postgraduate level gives advanced (grad cert/dip), specialised (masters), and/or systematic and critical (doctorate) understanding.

    The flip side is that there are people who can get a university degree, and be completely useless and clueless in a given job. A degree isn't some magic pill that guarantees particular competence, nor does it instantly mean employability or high wages. What it generally indicates is that the holder has a broad set of skills which will assist them in being an effective worker; it will give them a base of knowledge to apply to their given role which will allow them to learn more and grow.

    It does create a hurdle to jump in order to join the industry, and this isn't a bad thing. If someone can't pass a business degree, then they really shouldn't be handing out financial advice. What would be good is if companies that are able (probably the bigger players), employ young people in a cadetship while they're at uni. Everyone needs back office support staff, and it's a good time to train them in the workings of an insurance environment while they're also learning at uni.

    I believe ANZIIF already works with a university to provide a bachelor of business (insurance) by incorporating the ANZIIF modules with the degree. This is a great idea, and gives people filling out their uni preferences something extra to think about career wise. If we make the industry appear to be a legitimate professional option, and attract skilled and educated workers, then how is that a bad thing?
  • Scott R | 30 Jun 2015, 01:57 PM Agree 0
    Thanks Ben B for your thought out response.

    I hold myself a Bachelor of Arts (Maths/History). This has given me a number of important skills such as critical analysis which have, as you point out, has assisted me in my role.

    However, I'd like to point out that I received these not from a Bachelor of Insurance Business majoring in insurance, but from a different degree. In our office we also have someone with a Bachelor of Fine Arts, a Bachelor of Science, a Bachelor of Education & Bachelor of Law. All of these people, while intelligent, were unable to get a job in their studied field at some point in their career. The insurance industy was able to pick them up, and since then they've remained here.

    Generally speaking, the Bachelor of Business attracts a certain type of student - either a person in an existing business position (such as a manager, or a worker aiming for more) aiming to improve their current role, or a new student aiming high. If we require a Bachelor of Business (Insurance) to get into the industry, that would deny the former group access, and limit new entries to only a small percentage.

    In comparison, improving our current Tier 1/2 system would still allow easy access to the industry for new entrants. It is expected (from what I've seen) to be completed while working somewhere so there is a mixture of formal study & on the job training. This removes the elitism, 'will I get a job from this' uncertainty & up front costs of a specific degree while keeping the concept of quality learning.
  • Ben B | 30 Jun 2015, 02:27 PM Agree 0
    Hi Scott R,

    I think I see where there may be some miscommunication here. Whilst I am advocating for a bachelor of business (insurance) to become more mainstream in an effort to show uni entrants that insurance can be a legitimate career path; I'm not saying that an insurance degree is a must.

    Many degrees would have transferable subject matter; e.g. business, IT, economics, law. As mentioned before, it's also the 'intangible' skills learned like research, critical analysis etc that just about any degree is going to bestow upon it's recipient.

    If someone has a degree, and they want to move into insurance, then of course the logical course is to have them undertake the relevant Tier 1/2 studies whilst on the job. This would give them the required qualifications to provide financial services, but they will have so much more behind them from their degree.

    The fact is that there is an increasing number of people in the industry that have a degree (of some sort), and as those numbers increase, people without a degree could, by comparison, appear less attractive to employers.

    I can't speak for the NIBA education, but the ANZIIF offering could really use some improvement. I can't proffer a way that this could be achieved, but I personally learned very little from the course materials themselves. My insurance knowledge came from industry 'legends' that I was lucky enough to have as mentors.

    This is where I think an insurance degree could help, as there is more opportunity to teach more content. I think back to my business classes at uni, and think if all of that content was insurance based, I would have learned so much more, and been in a great position to enter the insurance world.
  • JW | 30 Jun 2015, 02:34 PM Agree 0
    The standards in the insurance industry are far too low. We had a Sales Person that started with us and obtained Tier 1. After 1 year they left and became an authorised representative. How can someone with 1 years minimal insurance experience be able to run their own business and provide the community with advice? This person had absolutely zero knowledge and was only interested in the dollars. he was accepted on the AR's PI insurance and away they go. I've been broking for 13 years and still learn on a daily basis. I would have only be capable or being an AR myself in the last few years.
  • Robert Cooper | 01 Jul 2015, 12:12 PM Agree 0
    A great discussion here. And as one that has his Fellowship, a Graduate Diploma of Insurance and an MBA, nothing is a substitute for on the job training learning people skills, IT skills, negotiation skills and building relationships. However, a University qualification gained alongside definitely is a bonus. Both go hand in hand.
    I found a combination of studying made me understand our industry better, respect it more and build greater analytical skills and writing skills.
    I studied all this part time except for the MBA which I took a year off for. Why take time off? Because I received no support to better myself by my employer at the time. They could not recognise that they could benefit from my additional skills and knowledge. This was not from the head office though as they were willing to cover the fees for me to do an MBA, but from the immediate people I worked with. They were paranoid I would be better qualified than them. I had bosses who were concerned I might may take their job from them. I was consequently loaded up with more and more work so I would have little time to study part time. I wanted to advance and not give up part way through the degree. So I had to take time out to do it. Not everyone can afford to do this.
    The knowledge gained from on the job experience along with all my qualifications gave me the confidence to eventually start my own Business.
    We need Insurance Industry Employers to invest in their staff, to support them as they build up their skills and qualifications and make it part of their workplace culture. But such an investment is expensive and there is always the fear they will take their skills elsewhere. Whether it is HECS or upfront fees, education is now very costly and we as an industry need to invest more in support and money in our younger staff. ALL OF US! If we want to raise the standard of expertise and skill in our profession. A culture of continuing learning and development by all companies, with a better Industry structure around uniform recognised and highly regarded qualifications. Not the piece meal peripheral ones we have all around the place now, then we can justify our profession up there with Lawyers, Accountants and Engineers.
  • Mike Sullivan | 01 Jul 2015, 12:30 PM Agree 0
    Hi all we all agree what will do about it is the question?
  • An old duck | 01 Jul 2015, 12:52 PM Agree 0
    This is a valuable discussion, and I was going to post pretty much everything you have said, Scott.
    (Just an Observer - your Prahran qualification is equal to a Diploma, not a degree).
    The current cost of a Bachelor of Business (Insurance) at Charles Sturt isn't advertised any more on their website, but from memory I think it works out around $10K to $11K (happy to be corrected). If ASIC's proposals go ahead, anyone providing advice to retail clients will need a Bachelor qualification within a few years. Let me say that again. Every single person providing advice to retail clients. This is not a theoretical discussion, guys.
    Who is going to pay for that? Small brokers won't - they'll just pull out of the retail client market, leaving those clients having to go direct to insurers, and getting zilch advice. Which is totally the opposite of what ASIC say they are trying to achieve. If you don't know what I'm talking about, download CP 212 from the ASIC website and have a close read. As an industry, we seem to be ignoring this issue - I can't see that ANZIIF even put a submission in about it!!
    We already struggle to get new entrants to the industry. How many are going to decide to put themselves through an insurance degree? To be paid peanuts?
    I agree that education in the industry needs a serious overhaul, but university is not the way to go.
  • Mike Sullivan | 01 Jul 2015, 01:07 PM Agree 0
    I would like to make another observation as a Past President of the Institute.
    When we had A state office we had a stronger network, following, seminars and regular education meetings at least monthly.

    This has been lost I have told ANZIIF it has fallen on deaf ears.
    However we see CQIB going from strength to strength , Why because CQIB is embracing training.
  • Robert Cooper | 01 Jul 2015, 01:39 PM Agree 0
    Old Duck. For many of us (apart from starting in the mailroom), the first insurance classes we deal with are Car and Householders insurance, and then go from there. It is part of the training ground, it is basic and the complicated stuff comes you build up the knowledge around these products. The real expertise is providing advice on all the other classes of insurance.
    In a way it is around the wrong way.
    Also the "no advice" regime from direct insurers should be better dealt with. As far as I am concerned giving a general advice warning is a crock. Everyone dealing in any kind of insurance product should be giving advice. Everyone whether Direct or intermediary. So all the Direct Insurers staff therefore all should have the appropriate qualifications too. Make it a level playing field.
    I also do not think this needs a University degree at this stage, but definitely some type of bridging qualifications at this stage of a career.
  • PD | 01 Jul 2015, 01:41 PM Agree 0
    "An old duck" - I wish it was only $10k! the Charles Sturt costs are sitting at $1,540 per subject, this is alot higher for new enrolments so pricing is going to differ. 14 subjects are required so you are looking at over $20,000 for the university side of it, then you have to add the cost of ANZIIF Insurance modules on top of that :-)
  • An old duck | 01 Jul 2015, 02:10 PM Agree 0
    Wow PD! Thanks! It's a couple of years since I looked at it. That's a significant barrier to entry.
    And Robert, I agree with everything you say. We also had people willing to mentor us - I see less and less of that these days.
  • Robert Cooper | 01 Jul 2015, 06:39 PM Agree 0
    Old Duck. Mentoring is more and more discouraged because it is felt that there is no loyalty from the modern workforce and that these people pick your brains and then disappear elsewhere. Also we find it hard to devote the time. Most Brokers I know work between 50 to 60 hours a week. They are under pressure to achieve targets which are particularly harder in a softer market. Training staff goes on the back burner now. And any external trainer usually knows very little about Insurance and can only provide generalised content, NIBA are making an effort with setting up mentoring arrangements but it is hard to devote the time. Our cluster groups have PD days but most prefer not to send more junior staff. ANZIIF is very much a money making exercise now with the prices they have charged and centralising their operations. They may have local Boards but they do not provide much.
    We used to have Insurance courses at TAFE, what happened to those?
    To me it has become a disappointing mess. We need uniform and recognisable qualifications throughout all these different organisations. Hate to say it, but do we have to have this legislated by politicians or as an Industry can we do it ourselves?
  • Scott R | 02 Jul 2015, 10:01 AM Agree 0
    Out of interest, what training regimes have proved successful with your brokerages?

    We tried buddy systems, admin-to-broker job progression, and a staggered approach to different products. Out of those options, the admin-to-broker has proved the most successful, but we lose a few staff who want to sell ASAP.
  • An old duck | 02 Jul 2015, 10:11 AM Agree 0
    Personally, getting in kids and training them up is my preference. Sure, you run the risk of training them to lose them, but that comes down to issues other than training - culture, career progression etc.
  • Mike Sullivan | 02 Jul 2015, 10:45 AM Agree 0
    Organisation culture is important, we are a niche marketer so I prefer to have younger persons who "do not have bad habits"
    Yes I believe in the start at the mail room then accounts as this allows people to have a grasp on the process and basic knowledge.
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