Embracing Change … In a Financial Crisis

Members Assess the Implications of Recent Turmoil for Employers and Careers
Two years ago, the CPCU Society’s Member Opinion Panel addressed the implications of change in the property-casualty insurance industry due to broad economic and demographic trends. In November 2008, the Panel was asked to examine recent economic changes that, while anticipated by some, have surprised many by their unprecedented severity and global breadth: problems in the housing market, mortgage and banking industries; global financial market turmoil, and an economic recession.

Panelists were asked to gauge the impact of the above events on the property-casualty insurance industry, near and longer term. How do they expect CPCU employers will be affected, and how will they respond? How will these changes impinge upon CPCU careers? And do they believe these events will make the CPCU designation and membership in the CPCU Society more or less valuable? Finally, respondents were asked what the CPCU Society can do to help insure their success in this turbulent environment.

Not All Gloom and Doom
The news from CPCUs participating in this survey is not all bad. While many of these economic shocks were foreseeable, most Panelists agree with the media that their severity was not. And more than one-half of Society members do not expect to see a recovery in the US stock market and economy until next fall at the earliest. At the same time, CPCUs agree that the actions their employers have taken in response to the crisis are appropriate, and expect that the industry’s generally conservative fiscal stance will ultimately win the day. Members also find that their professional designations and professional association memberships to be of even greater value in times of economic distress, both to themselves and to their employers.

Just the Facts
CPCUs who volunteered for the Member Opinion Panel received e-mailed invitations to share their prognostications via a web-based survey Tuesday, November 11, 2008. Survey details include:

Methodology: Web Survey
Survey Period: November 11 through December 5, 2008
Number of Panelists Participating: 157

Embracing Change

• Dissecting a Crisis: With the exception of the US government’s response (including the AIG bailout), most CPCUs consider the recent financial shocks to have been foreseeable, although more than one-half did not expect the severity of all but the bursting of the real estate bubble and resulting subprime mortgage meltdown.  Most (83%) also agree with media reports that the severity and global scope of the crisis has been unprecedented. More than one-half of respondents think it will be next fall at the earliest before we see the US stock market, economy, and financial services industry recover.

• Prognostications: The recently declared US economic recession will probably have the most significant impact on the property-casualty insurance business, according to 50% of CPCUs responding to the survey. The AIG bailout and the “bear” market will also play significant roles in the industry’s future. The most likely results will be higher insurance premiums and more restrictive underwriting standards. But CPCUs also warn that political pressure for federal regulation of the industry is likely to increase, and customers will resist price increases in the face of falling property values.

• Confidence: Of those employers who have taken steps to counter the financial crisis, (reported by 59% of members), most have eliminated “non-essential” costs (72%). CPCUs generally express confidence in their employers’ reactions to-date, and expect that most industry employers will survive and be well-positioned to thrive when the economy turns around, due to their conservative fiscal approach.
  

• Career Implications: CPCUs expect to see limits on travel and increased workloads as a result of the economic problems. What most don’t expect to see are reductions in employer support for professional designations like the CPCU (78% say it’s unlikely) and continuing education (76% unlikely). They also don’t expect to see employers decreasing support for membership in professional associations like the CPCU Society (77% unlikely).
  

• Value Enhancements: Difficult times can enhance the value of professional designations like the CPCU and professional associations like the CPCU Society, both from an individual perspective (according to two-thirds or more of panelists) and for employers. In the interests of insuring our members’ success even in a tough economic environment, the Society will be increasing the number of webinars offered, as requested by 78% of survey participants. Enhancements to the Job Network and career counseling opportunities will also be implemented (suggested by 72% and 83% of members, respectively). The CPCU Society will continue to review value-enhancements suggested by our members, with an eye toward insuring their continued success.

Interested in More?
To find out more about this survey and its findings, read the detailed report. Or e-mail Suzanne Kinsler , marketing and sales director for the CPCU Society.