Is the CPCU the Instruction Manual of Insurance? Here’s What Designees Say

Here's what industry professionals have to say about the CPCU, one of insurance's most prestigious designations.

By: Courtney DuChene | May 19, 2020

Editor’s Note: Risk & Insurance is an affiliate of The Institutes, which offers the CPCU

The COVID-19 pandemic has made it abundantly clear that risks are ever changing. In addition to assessing the risks of the pandemic, insurance professionals have to think about the ways in which it could affect their individual lives.

Added to that, is the fact that new technologies, increasing globalization and global climate change have created an already complex risk landscape for insurers to navigate.

With such an ever-changing world, insurance and risk management professionals may need to hit the books just to keep up.

Insurance designations provide a way for those working in the industry to hone and practice their skills, learn about new risks and make professional connections.

“It doesn’t matter what it is that you’re trying to accomplish, whether it’s running a marathon or learning to play an instrument or anything in business, you have to seek out ways to practice. That’s how we improve,” said John Chino, ARM-PE, CSRM, area senior vice president, public sector at Arthur J. Gallagher.

“I know of no better way to practice then to pursue and achieve a designation.”

When it comes to insurance designations, few loom larger than the Chartered Property Casualty Underwriter (CPCU).

bCPCU holders say that it has provided them with skills they use daily, connections in the industry and a path to promotions and future success.

“The CPCU not only gives you a breadth of industry knowledge, it can also expose you to other career paths,” said Patrick Shelton, CPCU, AU-M, underwriter for NIF Group, a JenCap Holdings Company.

“Knowledge is power, and designations are essential to providing the knowledge you need to excel.”

What Is the CPCU?

The CPCU is made up of nine total courses, including four core foundational courses in emerging risks, insurance operations, insurance law and corporate finance and accounting.

The core courses have recently been updated so that the designation can now be completed entirely online.

The designation also offers concentrations in commercial and personal lines and electives so that insurance professionals can further tailor their coursework to their particular niche within the industry.

“I can’t remember half of what I learned in college, but I use my CPCU skills daily,” said Melissa Burns, CPCU, ARe, reinsurance analyst at FM Global.

Once finished with their coursework, designation holders can attend the CPCU Society’s Annual Meeting and join a local chapter to continue making connections with other professionals in the industry.

“The CPCU touches on nearly every property/casualty subject out there. I work for a commercial property insurer, but learning about casualty, homeowners, auto, etc. gave me a well-rounded edge and a lot of confidence,” Burns said.

What’s the CPCU Time Frame?

On average, the designation takes two to three years to complete. CPCU holders say that it’s an excellent designation to pursue at any career stage.

John Chino, area senior vice president, public sector, Gallagher

For young insurance professionals, the CPCU and other designations can provide a framework for understanding the industry better. Chino likened working in insurance without a designation to trying to build a Lego version of Hogwarts without the instructions.

“The designation is the instructions,” he said.

“This business is highly complex, it’s dynamic, at times it’s overwhelming and if you don’t have the framework, the framework is precisely what those designations teach you, well then it’s very challenging to be effective.”

Young professionals in the first three to seven years of their career should also consider pursuing the CPCU and other designations as a way to stand out to management and launch their careers in the industry.

“Having a CPCU could possibly catapult your career and position within a company as the designation is widely recognized among one of the top in the insurance and risk management world,” said Terrance E. Harvey, CPCU, medical malpractice underwriter for MMIP.

Older professionals can also benefit from the ways a CPCU helps them stand out in their career.

“With millennials flooding the marketplace as of recent, having a professional designation on a resume will keep older professionals in the workforce as their experience and expertise will be very much needed,” Harvey said.

“It also shows a commitment to learning as opposed to fighting possibly dated strategies.”

What Can the CPCU Do for Your Career?

Insurance professionals say the strong foundation of knowledge the CPCU gave them has allowed them to advance in their careers and take on projects that they wouldn’t have been considered for without the designation.

“Since getting my CPCU, I’ve been asked to lead projects I wouldn’t have been considered for otherwise. It’s important to have a strong foundation so you can understand and adapt in this fast-moving industry,” Burns said.

“Even though the CPCU and other designations are not guaranteed to advance your career, they certainly influence the way you are seen as a professional.”

“The rigorousness of earning a CPCU designation is known to all; it’s not for the faint of heart. Especially when it comes to the finance and accounting section,” Shelton added.

“Since it is such a difficult designation to earn, it really demonstrates not only a professional’s dedication to continuing education but to the insurance industry as well.”

Earning a CPCU or other designation can also help professionals transition to a career in insurance after working in other industries.

“Designations provide insurance professionals with a crash course in the risk and insurance mechanism, which, in my opinion, will accelerate their future growth, since they have that solid foundation of knowledge that designations provide,” Shelton said.

An IRMI report from 2019 noted that only 49 colleges and universities in the U.S. have risk management and insurance programs, which means many insurance professionals come to the industry from other fields or career paths.

A professional designation can serve as a means to help make that transition smoother.

So Why Get the CPCU?

After majoring in forensic science in college, Burns said she earned her CPCU, because she felt she needed it to further her career in the industry.

“While everyone thought [my degree] was cool, and I could always find out who stole my lunch from the break room fridge, it wasn’t the kind of background that qualified me to become an underwriter,” Burns said.

“I debated getting an ARM or CPCU, [and] ultimately, the CPCU won out because it was the pinnacle of designations — like a Master’s in Insurance.”

Pursuing a CPCU can also help insurance professionals stay up-to-date on the modern risk landscape.

Terrance E. Harvey, CPCU, medical malpractice underwriter, MMIP

With all of the emerging risks brought on by COVID-19, increasing one’s risk management and insurance education could be an exceptionally important career move than ever before.

“In this time of uncertainty, and as the insurance industry is changing rapidly before our eyes, I feel everyone in the insurance and risk management field should pursue a professional designation,” Harvey said.

“Having a designation keeps you ahead of the pack, and the continuing education will keep you current and up-to-date with topics pertaining to emerging risks.”

Even if the CPCU isn’t right for you, Chino said that other designations can still add a lot of value: “There is no such thing as a bad designation, there is no designation that, when embarked upon, would not be worth your time, there is simply no such a thing,” he said. &

Courtney DuChene is a freelance journalist based in Philadelphia. She can be reached at [email protected].

Why Insureds Might See an Uptick in M&PL Claims

George Schalick, Jr., Senior Vice President of the Management and Professional Liability Division, Philadelphia Insurance Companies

The current soft market might come as a bit of a surprise as it does not track with previous underwriting cycles and economic conditions. Afterall, many privately held and non-profit organizations struggled during the early days of the pandemic with shutdowns and rapidly declining revenues. But the Government assistance programs, like the Paycheck Protection Program loans, helped keep many afloat during the tough times.

“During COVID many organizations stopped doing business until they were able to sort out all of the health and safety challenges,” Schalick said. “They were forced to lock down, but then all the government assistance programs allowed them to keep people employed. The increased volume of claims we anticipated we would see coming from the lockdowns and restrictions that were imposed upon businesses in the U.S. didn’t manifest at first.”

“Just because there wasn’t an onslaught of reported claims at the beginning of the pandemic, doesn’t mean the circumstances that would give rise to a claim being reported didn’t occur. Courts and the judicial system were closed or slowed and now that they are back open, we’re starting to see the circumstances that occurred during the COVID lockdowns becoming claims today,” Schalick said. “Litigation is progressing.”

Added to the delayed pandemic litigation is a concern over newer claims that might be filed as the country inches toward an economic downturn. Though a recession was avoided in 2023, experts think a soft dip could occur in 2024, with 76% of economists saying there’s a 50% or less chance of an economic downturn this year — that almost always results in more management liability claims.

“During the Great Recession in 2008, we saw an almost immediate spike in claims because of the economic conditions and the pressure it placed on organizations. They were making personnel changes with significant belt tightening almost immediately.” Schalick said.

What’s in Store for M&PL Policy Rates in 2024?

Despite an uptick in claims and increased economic uncertainty, management liability rates haven’t increased, resulting in market-wide pricing levels that may not meet the increased pressure of rising settlements and jury verdicts.

“Rates are going the other direction and settlement values are not falling,” Schalick said.

The mismatch between rates, claim frequency and severity is, in part, because carriers experiencing the dramatic soft market in the public D&O market are seeking premium gain in the private and non-profit market.

“In the public company market, the rates have been decreasing significantly. The rates were increasing in the private, not-for-profit market, and rightfully so, but there’s a desire to supplement overall mid-size D&O for carriers who also write private not-for-profit, and they see that as an opportunity to aggregate premium,” Schalick said. “So the always competitive landscape in the private, not-for-profit market has dramatically increased in the last 18 to 24 months.”

Still, companies of all sizes and types should be concerned about management liability rates in the future. Legal system abuse is resulting in increases in both the amount of litigation and the size of verdicts plaintiffs are receiving.

Certain areas of the country are particularly vulnerable to this type of legal system abuse. As a result, insureds in these localities are likely to be vulnerable to rate increases.

“The environment is so positive for the plaintiff that forces premium increases so carriers are able to stay in that market long term,” Schalick said.

Why a Tenured Carrier Partner Can Help Insureds Navigate An Uncertain Market

It’s clear that insureds are facing an uncertain M&PL market over the next few years. Fortunately, carriers with a long history in the M&PL space will be there to offer stability.

Philadelphia Insurance Companies has been supporting this market for 35 years. PHLY is committed to offering long-term rate stability, even as economic and claims trends start to push premiums upwards. They have an appetite for all sorts of companies, large and small, for-profit and nonprofit alike.

“We’ve been at this game for a long time and are one of the most tenured underwriters in this space,” Schalick said. “We like to stay very consistent.”

PHLY has worked with both for-profit and non-profit on management liability policies. With dedicated M&PL teams throughout the company’s 13 regions, PHLY provides the support agents and brokers are looking for on behalf of their clients. The teams know their regions well and can respond to local trends. They’re also dedicated to making the renewal process as easy as possible for their partners and policyholders.

“We have real confidence in our results, so we focus a lot on making the renewal experience as painless as possible for all agents and insureds,” Schalick said.

The company is also investing in tools to help insureds avoid losses. Earlier this year, they launched a new online risk management platform, PHLYGateway, which offers resources for insureds on how to create an employee handbook and trainings on issues such as recognizing workplace sexual harassment and discrimination.

If insureds have questions, they can consult a Best Practices Help Line, provided via the platform. That way, they can get on the spot risk management guidance to help them prevent claims.

To learn more, visit: https://www.phly.com/mplDivision/managementLiability/default.aspx.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Philadelphia Insurance Companies. The editorial staff of Risk & Insurance had no role in its preparation.