Business Growth, Trends

Evaluating the MBA: a Guide for Insurance Pros

The insurance industry is in flux. There’s a huge number of seasoned pros on the brink of retirement. And we’re in a time of sweeping technological change: so much of the way we work, make decisions, and serve people won’t look the same in ten or even five years.

A career in the insurance industry opens up a whole world of opportunity, whether you are interested in people management, technical management, or risk management. At the same time, there’s no one direct path to the top of your game. In an industry that values experience over pedigree, there’s a distinct lack of career paths.

How do you become the best at what you do, and what resources could get you there? Is it an MBA, an insurance designation, or something else entirely?

Unlike your last class exam, there are no right answers, but it’s a discussion we need to have as we figure out where insurance is going.

Will a Traditional MBA Jumpstart Your Insurance Career?

The Master of Business Administration (MBA) is now a century old. Harvard Business School started the first MBA program in 1908 with only 80 students. Today, MBAs play a big role in American industry: those three letters signal educational excellence, prestige, and of course, a top-tier salary.

Today’s MBA programs barely resemble those initial course loads. They’re now more intensive and focused on innovation. You’ll even get specialist courses: if you attend the University of Pennsylvania or the University of Georgia, you can pursue an emphasis in risk management.

The top MBA programs are rigorous, provide valuable experience, and connect leaders from across the globe to generate opportunities. Those programs are even better when your employer invests on your behalf.

But is the MBA the right idea for your insurance career?

There’s a place for MBAs both in insurance and across the economy. But as the cost of tuition grows and the return on investment drops, you need to take a hard look at your options. After all, the traditional MBA requires you to:

  • Spend upwards of six-figures on tuition
  • Take a year or more off work
  • Invest serious time and effort outside of your industry

Then, there’s the unspeakable 2020 factor.

For the foreseeable future, everyone is working from home where possible, which requires new, dynamic, and untested leadership skills. To lead today, you need to be empathetic, community-minded, and forward-looking, which you get from hard-won experience rather than in the classroom.

And the connections, cocktail mixers, and far-flung experience placements that make MBAs worth their price tags are on hold for the foreseeable future. It’s also a gamble to assume they return at all, particularly as MBA programs see their applicant pools continue to shrink. 

MBA applications dropped by double-digits for the 2018-2019 year — and it’s fair to say the stats for 2020-2021 will be abysmal, causing universities to make difficult decisions. Even before the pandemic, predictions slated that as many as 20% of the top MBA programs will close, and second and third-tier schools will fare even worse.

MBAs Aren’t a Guaranteed Path to Success

MBAs are great for some: founders, leaders, and those who aspire to be founders, leaders, and upper management. Suppose you’re mid-level in your career, and you thrive in the classroom, want to make connections, and desire to spend time in an innovative academic environment. In that case, an MBA has much to offer, particularly if you see yourself transitioning to another industry outside of insurance.

However, there are caveats:

  • Your MBA degree is only as good as the program. Without connections and practical experience, you could pay $100k for books available in Barnes & Noble.
  • The degree doesn’t guarantee you an interview, promotion, or success. If you get your MBA too early, you will be both overqualified and under-qualified simultaneously.
  • Top-tier programs with high placement rates and salaries are incredibly competitive. The Stanford MBA only has a 6.9% acceptance rate, and MIT’s Sloan program is only 14.6%; though others like Wharton, Northwestern, and the University of Chicago have higher rates (around 25%). The ROI on second and third-tier schools is lower.

Your industry plays a big role in whether the MBA offers value. In consulting, finance, tech, and healthcare, MBAs catch the eyes of hiring managers.

MBAs do have a place in the insurance industry, but we also value experience over pedigree. And there are many ways to gain valuable experience in our field. From mentorship to insurance designations to the continuing education requirements required of so many of us, we need to ask: is there a better way than the MBA?

Finding the Right MBA Alternative for Insurance Careers

The MBA is not the be-all-and-end-all of business degrees. After all, you want the knowledge and experience gleaned from the program. Those three letters don’t always grant you those, and they won’t necessarily garner the kind of salary that comfortably repays the growing tuition fees and makes up for lost income.

If you currently work in insurance and see yourself someday retiring from the industry, a specific Master’s degree in risk management, economics, or another field may offer more help and a leg up. Insurance-specific degrees are available but limited: Boston University offers an Online Master of Science in Insurance Management. 

The CPCU designation is also a good shout: it’s well-regarded throughout the industry and can help you get over hurdles in sales, claims, or underwriting to help you grow your career or land a new role with a top carrier.

If you love insurance but want to become a more well-rounded professional, a look at continuing education — not an MBA specifically, but prioritization of education today and throughout your career — may be not only of more value but provide increased competitiveness and a better ROI.

What Collection of Courses, Certificates, and Experience Would Grant You an MBA without the Price Tag?

Well, that depends on your experience. There comes a point in your career where you practice the general business concepts you’ll find in an MBA. And with 10-15 years of experience, you know a lot more about risk than you could fit into a three-month, twice-weekly course.

So, what collection of courses, certificates, and professional growth would grant you the equivalent of an MBA? Well, it all comes down to your goals: Do you want to increase your practical skills? Leadership? Refine your soft skills? Grow your own business? Find ways to transition into a new role?

The answer for many pros could be the CPCU. The CPCU is like a master’s in insurance, and the work is very similar to the academic rigor of a university. It’s also specific and hyper-relevant to insurance. If you plan to stay in insurance and lead the industry into its next phase, the CPCU is an excellent starting point.

For those who want to expand insurance education and become competitive for promotions and new roles, you might try these:

  • CIC
  • CISR
  • CRM
  • CSRM
  • AFIS
  • CRIS
  • ERIS
  • MLIS
  • TRIP
  • RF

Each of these designations offers unique opportunities. But as with an MBA, it’s vitally important to find the right programs and instructors. You get the most from any designation when you find a provider committed to empowering future insurance leaders.

What Will Your Career Path Look Like?

Your insurance career isn’t likely to reflect the experience of your company’s current leadership. There are so many new opportunities for both personal and career growth that this is a very exciting time to work in insurance.

MBAs still offer value, but those three letters no longer make any promises. If you want to be a leader through the next decade of change in the insurance industry, you may want to think laterally and consider a broad range of educational and career opportunities, from industry designations to startups offering group project work over brunch.

There’s no one career path in insurance, but that’s part of what makes the industry such a dynamic place to be and allows us to meet the changing needs of our partners and customers.

Author: Foresight

We’re a team of compliance, safety, and commercial insurance professionals transforming workers compensation. We write about technology, trends, regulations, and value-adding services.