Higher Education

9 Critical Issues Facing Higher Education

Financial pressures and societal changes are challenging university risk managers like never before.
By: | June 7, 2018 • 3 min read

With the very necessity of a four-year degree in question in many circles, higher education risk managers face a litany of risks including institutional financial solvency, massive class actions due to concussion injury suffered by football and hockey players and the risk that minors or other at-risk populations will suffer injuries on college campuses.

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The recent $500 million settlement between Michigan State and the hundreds of young female gymnasts victimized by Dr. Larry Nassar is seen as a bellweather event that signals more massive settlements are coming, involving colleges and universities which fail to protect their students from sexual assault or other forms of abuse.

The award in the Nassar case dwarfs the $109 million settlement that Penn State reached with victims of former football coach Jerry Sandusky. Sexual assault is just one of 9 critical issues facing higher education risk managers.

1) Financial Solvency

The recent bankruptcy declaration by Mount Ada College in Massachusetts could be the canary in the coal mine. Higher education risk managers are starting to question whether schools are paying enough attention to market factors such as the increasing cost of attracting and retaining students, a rising income and wealth disparity that makes college unaffordable for so many.

2) Athletic Concussion Injury

It’s not just the NFL and the NHL facing lawsuits from dozens of former players who claim  playing sports left them with degenerative brain injuries.

More than 100 personal injury class action lawsuits have been filed against the NCAA, claiming that universities and university athletic associations were way too late in establishing protocols for managing and treating athletic head injuries. The settlements in these cases could easily run into the hundreds of millions.

3) Sexual Assault

When they came out, the allegations were almost too awful to believe, but even after a $500 million settlement with Michigan State University over the actions of disgraced athletic physician Larry Nassar, now we know that more settlements are on the way.

USC has been rocked by a scandal that took down the University’s president. In this environment, it’s only a matter of time before the lid is blown on yet another case where an employee of an academic institution is found to have abused their position of power.

4) Gender Equality Issues

Campuses are hotbeds for controversies over gender issues such as equal rights for LGBT students, equal pay for female professors and whether female athletes are accorded the same privileges as male athletes as they should be under Title IX. As the professional and social cultures in the United States continue to evolve, watch for the #MeToo movement and other awareness building campaigns to unearth more disparities and abuses, and more multi-million dollar settlements.

5) Gradual but Dangerous Erosion of the Belief in Higher Education’s Value

There is an increasing tide of anti-intellectual rhetoric about how college is unnecessary and not worthwhile.

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This is accompanied by a decrease in the number of people willing to invest their money and time in a college education. Culturally, we are seeing a wave of dogma and simplistic slogans that are crowding out evidence-based research and the open inquiry that a college educational environment cultivates.

6) Campus Crisis Readiness

As the mass shootings at Virginia Tech and Northern Illinois University illustrated, university campuses are not immune from the wave of shooting sprees that have terrorized workplaces and academic institutions for decades. In addition to mass shootings, universities face liability, reputational harm and property damage from severe storms, hazardous material releases and student protests.

 

Additional risks:

7) Cyber

8) Minors on Campus

9) Special Events and Conference Management

Sources include the University Risk Management and Insurance Association; Cornell University; Gallagher;  Zachary Gifford, Director, Systemwide Risk Management, the California State Universities; Jack Hampton, a Professor of Business at Saint Peter’s University, and Paula Vene Smith, director of the Purposeful Risk Management Project and a professor at Grinnell College.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

2018 Risk All Stars

Stop Mitigating Risk. Start Conquering It Like These 2018 Risk All Stars

The concept of risk mastery and ownership, as displayed by the 2018 Risk All Stars, includes not simply seeking to control outcomes but taking full responsibility for them.
By: | September 14, 2018 • 3 min read

People talk a lot about how risk managers can get a seat at the table. The discussion implies that the risk manager is an outsider, striving to get the ear or the attention of an insider, the CEO or CFO.

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But there are risk managers who go about things in a different way. And the 2018 Risk All Stars are prime examples of that.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Goodyear’s Craig Melnick had only been with the global tire maker a few months when Hurricane Harvey dumped a record amount of rainfall on Houston.

Brilliant communication between Melnick and his new teammates gave him timely and valuable updates on the condition of manufacturing locations. Melnick remained in Akron, mastering the situation by moving inventory out of the storm’s path and making sure remediation crews were lined up ahead of time to give Goodyear its best leg up once the storm passed and the flood waters receded.

Goodyear’s resiliency in the face of the storm gave it credibility when it went to the insurance markets later that year for renewals. And here is where we hear a key phrase, produced by Kevin Garvey, one of Goodyear’s brokers at Aon.

“The markets always appreciate a risk manager who demonstrates ownership,” Garvey said, in what may be something of an understatement.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Dianne Howard, a 2018 Risk All Star and the director of benefits and risk management for the Palm Beach County School District, achieved ownership of $50 million in property storm exposures for the district.

With FEMA saying it wouldn’t pay again for district storm losses it had already paid for, Howard went to the London markets and was successful in getting coverage. She also hammered out a deal in London that would partially reimburse the district if it suffered a mass shooting and needed to demolish a building, like what happened at Sandy Hook in Connecticut.

2018 Risk All Star Jim Cunningham was well-versed enough to know what traditional risk management theories would say when hospitality workers were suffering too many kitchen cuts. “Put a cut-prevention plan in place,” is the traditional wisdom.

But Cunningham, the vice president of risk management for the gaming company Pinnacle Entertainment, wasn’t satisfied with what looked to him like a Band-Aid approach.

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Instead, he used predictive analytics, depending on his own team to assemble company-specific data, to determine which safety measures should be used company wide. The result? Claims frequency at the company dropped 60 percent in the first year of his program.

Alumine Bellone, a 2018 Risk All Star and the vice president of risk management for Ardent Health Services, faced an overwhelming task: Create a uniform risk management program when her hospital group grew from 14 hospitals in three states to 31 hospitals in seven.

Bellone owned the situation by visiting each facility right before the acquisition and again right after, to make sure each caregiving population was ready to integrate into a standardized risk management system.

After consolidating insurance policies, Bellone achieved $893,000 in synergies.

In each of these cases, and in more on the following pages, we see examples of risk managers who weren’t just knocking on the door; they were owning the room. &

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Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, clarity of vision and passion.

See the complete list of 2018 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]