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Risk Insider: Jack Hampton

Disruption Awaits Higher Education

By: | May 25, 2017 • 3 min read
John (Jack) Hampton is a Professor of Business at St. Peter’s University and a former Executive Director of the Risk and Insurance Management Society (RIMS). His recent book deals with risk management in higher education: "Culture, Intricacies, and Obsessions in Higher Education — Why Colleges and Universities are Struggling to Deliver the Goods." His website is www.jackhampton.com.

It’s 11 p.m. in Manhattan and the theaters near Times Square are letting out. Many residents of the city don’t own cars or at least won’t pay $30 a day to park them nearby.

Thank goodness taxis are available to transport everyone. Or are they?

Not a problem. Click on your smart phone to request a convenient, inexpensive and safe service to take you home. Immediately coming to mind is the ubiquitous Uber, but it’s not your only choice. Lyft gives it a run for its money. Even taxicab companies finally adopted the model.

Higher education may be the taxicab companies of 10 years ago. The business of college and universities is being disrupted, but the threat has been masked by all the attention given to abuses by for-profit colleges. Their misbehavior is widely known, and it has poisoned the well.

We were slow to respond when Joshua Woods, a doctoral student at Michigan State University, dramatically exposed it in 2006. He fictitiously applied to six MBA programs as part of a research project. He used bad grammar and spelling while explaining he was a 31-year-old high school graduate with a grade-point average of 2.0.

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Michigan State promptly answered. “An applicant must have a bachelor’s degree to apply for an MBA program. More information is available on our website.” Not the answer from for-profits.

Within 30 days, he was being recruited by ITT Technical Institute, the University of Phoenix, Davenport University, the American Graduate School of Management, and Corinthian College. Thirty separate emails containing four sales themes:

  • Opportunity. “The starting salary for individuals holding the MBA degree is $55,000.”
  • Ease. “We give you all the help you need to get an MBA, including federal loan financing.”
  • Encouragement. “You can do it. You can improve your life.”
  • Shame. “Are you happy with your life? Embarrassed to tell others where you work?”

In recent years, many students responded to such admonishments. To pay tuition, they were often loaded up with government and other loans. The financial ramifications of more than one trillion dollars of student debt casts a shadow over higher education today.

Higher education may be the taxicab companies of 10 years ago. The business of college and universities is being disrupted, but the threat has been masked by all the attention given to abuses by for-profit colleges. Their misbehavior is widely known and it poisoned the well.

The government is now dealing with the recruiting and financial abuses. At least we hope this is true. Are colleges doing the same?

Thus, we get to Purdue University. Is it about to engage in disruptive innovation?

In April 2017, the school acquired the for-profit Kaplan University with its 32,000 online and campus-based students on 14 campuses in seven states. The Washington Post reported the purchase was an effort to “extend Purdue’s reach into online and adult education.”

The effort by Purdue raises an interesting possibility. Colleges that disrupt the traditional model – use technology, create attractive new programs, respond to economic and other forces – may be the survivors in a world where higher education must overcome financial and other difficulties attacking the traditional education model.

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

The risk manager for Boyd Gaming Corp. says curiosity keeps him engaged, and continual education will be the key to managing emerging risks.
By: | May 1, 2018 • 4 min read

R&I: What was your first job?

I was trained as an accountant, worked in public accounting and became a CPA. Being comfortable with numbers is helpful in my current role, and obviously, the language of business is financial statements, so it helps.

R&I: How did you come to work in risk management?

Working in finance in the corporate environment included the review of budgets and the analysis of business expenses. I quickly found the area of benefits and insurance — and how “accepting risk” impacted those expenses — to be fascinating. I asked a lot of questions. Be careful what you ask for — I soon found myself responsible for those insurance areas and haven’t looked back!

R&I: What is the risk management community doing right?

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I have found the risk management community to be a close-knit group, whether that’s industry professionals, risk managers with other companies or support organizations like RIMS and other regional groups. The expertise of the carriers and specialty vendors to develop new products and programs, along with the appropriate education, will continue to be of key importance to companies going forward.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

As I’m sure many in the insurance field would agree, Hurricanes Katrina and Rita in 2005 changed our world and our industry. It was a particularly intense time and certainly a baptism by fire for people like me who were relatively new to the industry. This event clearly accelerated the switch to the acceptance of more risk, which impacted mitigation strategies and programs.

Bob Berglund, vice president, benefits and insurance, Boyd Gaming Corp.

R&I: What emerging commercial risk most concerns you?

The fast-paced threat that cyber security represents today. Our company, like so many companies, is reliant upon computers, software and IT expertise in our everyday existence. This new risk has forged an even stronger relationship between risk management and our IT department as we work together to address this growing threat.

Additionally, the shooting event in Las Vegas in 2017 will have an enduring impact on firms that host large gatherings and arena-style events all over the world, and our company is no exception.

R&I: What insurance carrier do you have the highest opinion of?

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With the various types of insurance programs we employ, I have been fortunate to work with most of the large national and international carriers — all of whom employ talented people with a vast array of resources.

R&I:  How much business do you do direct versus going through a broker?

We use brokers for many of our professional coverages, such as property, casualty, D&O and cyber. We are self-insured under our health plans, with close to 25,000 members. We tend to manage those programs internally and utilize direct relationships with carriers and specialty vendors to tailor a plan that works best for team members.

R&I: Who is your mentor and why?

I have been fortunate to have worked alongside some smart and insightful people during my career. A key piece of advice, said in many different ways, has served me well. Simply stated: “Seek to understand before being understood.”

What this has meant to me is try everything you can to learn about something, new or old. After you have gained this knowledge, you can begin to access and maybe suggest changes or adjustments. Being curious has always been a personal enjoyment for me in business, and I have found people are more than willing to lend a hand, offer information and advice — you just need to ask. Building those alliances and foundations of knowledge on a subject matter makes tackling the future more exciting and fruitful.

R&I: What have you accomplished that you are proudest of?

Our benefit health plan is much more than handing out an insurance card at the beginning of the year. We encourage our team members and their families to learn about their personal health, get engaged in a variety of health and wellness programs and try to live life in the healthiest possible way. The result of that is literally hundreds of testimonials from our members every year on how they have lost weight, changed their lifestyle and gotten off medications. It is extremely rewarding and is a testament to [our] close-knit corporate culture.

R&I: What’s the best restaurant you’ve ever eaten at?

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Some will remember the volcano eruption in Iceland in spring of 2010. I was just finishing a week of meetings in London with Lloyd’s syndicates related to our property insurance placement when the airspace in England and most of northern Europe was shut down — no airplanes in or out! Flights were ultimately canceled for the following five days. Therefore, with a few other stranded visitors like myself, we experimented and tried out new restaurants every day until we could leave. It was a very interesting time!

R&I: What is the riskiest activity you ever engaged in?

I am originally from Canada, and I played ice hockey from the time I was four years old up until quite recently. Too many surgeries sadly forced my recent retirement.

R&I: What do your friends and family think you do?

That’s a funny one … I am a CPA working in the casino industry, doing insurance and risk management, so neighbors and acquaintances think I either do tax returns or they think I’m a blackjack dealer at the casino!




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]