Insurance Industry Creates Pipeline for Next Generation

Last updated on May 13th, 2019 at 02:36 pm

Just like most industries, the Wisconsin insurance industry is preparing for a severe labor shortage as the baby boom generation fades into retirement and is succeeded by a much smaller generation and workforce.

With that prospect in mind, several insurance companies in the state are partnering with the Wisconsin Foundation for Independent Colleges (WFIC) to establish the Wisconsin Insurance Education Consortium.

The new collaboration will recruit college students to consider careers in the insurance industry.

"We feel this will be a pioneering, national model for the insurance industry," said Anthony (Tony) Warren, president and chief executive officer of West Bend Mutual Insurance Co., in a letter about the program to the CEOs of other insurance companies.

West Bend Mutual is one of 17 companies that have agreed to be charter members in the new consortium. The other charter members are: American Family Insurance Co.; Ameriprise Auto & Home Insurance; Badger Mutual Insurance Co.; Blue Cross Blue Shield of Wisconsin; Church Mutual Insurance Co.; Integrity Mutual Insurance Co.; Jewelers Mutual Insurance Co.; Johnson Insurance; Marsh Insurance Agency; MGIC Investment Corp.; Mortenson, Matzelle & Meldrum (M3); R&R Insurance Services Inc.; Security Insurance Services Inc.; Society Insurance Services Inc.; United Heartland; and Wausau Insurance Cos.

"Many companies are facing as many as half their managers retiring in the next decade. Insurance is a great industry for Wisconsin. We are excited to help students check it out," said Mark Torinus, president of WFIC.

The insurance industry remains a key employment sector in Wisconsin’s economy, as the state is home to the corporate headquarters of American Family, Wausau Insurance Cos., West Bend Mutual Insurance Co., Northwestern Mutual Life Insurance Co. Inc. and Acuity Insurance.

The Wisconsin Insurance Education Consortium has received a $25,000 grant from the Kemper Foundation to help WFIC and 20 private colleges in the state add exposure to the industry in their campus curriculum, professional development and seminars.

The consortium’s first project, the Insurance Education Summer Institute, will take place at Concordia University June 25-30. Twenty-five college students will be recruited to attend the conference, which is funded by Blue Cross Blue Shield of Wisconsin and American Family Insurance.

The students who agree to attend the residential conference will attend seminar classes taught by insurance professionals and will participate in a range of activities, including a golf outing.

For additional information about the event, contact Christy Miller, vice president of operations at WFIC at (414) 273-5980, extension 12.

The insurance program expands the impact of WFIC, which also announced it has received a $35,000 unrestricted grant from Quad/Graphics Inc. of Sussex. The grant supports WFIC’s goal of providing direct support and innovative programming to expand educational opportunities at Wisconsin’s 20 independent colleges.

Wisconsin seniors flock to state insurance program

Enrollments in SeniorCare, a Wisconsin drug benefit program for low-income seniors, have risen 150 percent over the past year, according to the latest issue of Wisconsin Health Plan Analysis.

The program received 175 applications per day in December 2005, up from 70 applications a day a year before. The study was performed in December by HealthLeaders-InterStudy, a Nashville, Tenn.-based provider of managed care industry intelligence.

"State officials have long touted SeniorCare as a more attractive and beneficial program than the Medicare Part D drug benefit, and many seniors seem to agree," said Ric Gross, HealthLeaders-InterStudy analyst. "Most seniors who enroll in Medicare Part D after the end of the introductory six-month enrollment period on May 15 will face a penalty, but SeniorCare participants can enroll in a Part D plan without penalty all the way through the middle of 2007. SeniorCare won’t last forever, but right now, it looks like a safe haven from any early Part D turmoil."

SeniorCare, which provides prescription drug benefits to low-income seniors in Wisconsin who are over 65 and not eligible for Medicaid, has been operating in the state since 2002 under a federal Pharmacy Plus waiver. The waiver expires on June 20, 2007, and the Centers for Medicare & Medicaid services are unlikely to renew it.

The state is considering developing a new "wraparound" benefit, but whatever is developed will not have the favorable financing structure of SeniorCare, which derives its funds, not only from state and federal governments, but from drug company rebates and pharmacy discounts as well.

The Health Plan Analysis also reported that premium rate increases for health plans participating in the State Group Health Insurance Program are averaging 8.3 percent for 2006.

Insurance companies’ investments boom

Investment profits for life and health insurance companies in the United States soared 224 percent to $1.8 billion in the first nine months of 2005, compared with $552 million for the same period of 2004, according to a recent report by Weiss Ratings Inc.

As a result of the massive investment gains, the profits for U.S. insurance companies increased by $2.3 billion, or 8.9 percent, to $28 billion during the same period.

"Insurers have enjoyed an extended period of growth by nearly all measures due in part to an industry trend toward asset accumulation and away from traditional products as baby boomers enter their prime earning years and put more money into variable annuities and similar insurance investment vehicles," said Melissa Gannon, vice president of Weiss Ratings Inc.

Jupiter, Fla.-based Weiss Ratings is an independent provider of ratings and analyses of financial services companies, mutual funds and stocks.

The value of insurers’ separate account assets increased by 14.2 percent to $1.4 trillion in the third quarter of 2005, compared to $1.2 trillion for the same period in 2004, according to the Weiss report. A separate account is established by an insurer to fund variable annuities, variable life insurance or other contracts in which investment returns are based on segregated assets.

"The increase represents continued interest by consumers to invest in variable life and annuity products in anticipation of improved equity markets and rising interest rates," the Weiss report said.

Homeowners’ insurance premiums are stable

Homeowners’ insurance premiums for Wisconsin residents are among the lowest in the nation, according to a recent report by the National Association of Insurance Commissioners.

For the most common homeowner’s insurance package, the average Wisconsin premium is $434, compared with the national average of $668, according to the study. Idaho was the only state with a lower average premium at $433. Texas had the highest at $1,328.

One reason that homeowners’ insurance premiums in Wisconsin are so low is that 170 companies sell homeowners’ insurance in the state, according to the 2004 Wisconsin Insurance Report. By comparison, some states have as few as five companies selling homeowners insurance, according to the Wisconsin Office of the Insurance Commissioner.

"The market here is very competitive, which allows consumers to shop around and find low prices," said Jorge Gomez, Wisconsin’s commissioner of insurance.

The severe storms that occurred in the state and around the country last year have not affected Wisconsin homeowners’ insurance rates, according to the insurance commissioner’s office. The largest four writers of homeowners’ insurance in Wisconsin filed rate decreases in 2005.

"Insurance companies plan for a number of severe storms," Gomez said. "The tornadoes in Stoughton and from Hurricane Katrina have not affected Wisconsin premiums."

Texas company offers affordable wellness program

The Metropolitan Builders Association (MBA) of Greater Milwaukee today announced it has formed an alliance with Wellspring Healthcare Inc., which will make its wellness and prevention programs available to members of the organization. The program is being designed to help MBA members reduce their medical and workers’ compensation costs.

MBA, which is based in Waukesha, is a nonprofit trade association that represents more than 1,000 companies in the construction, development and remodeling of single and multi-family housing and light commercial property in Waukesha, Washington, Ozaukee, Jefferson and Milwaukee counties.

"As an association, we are looking for ways to assist our members in reducing their insurance costs to help them improve their profitability while containing construction costs," said Matt Moroney, executive director of MBA. "Our relationship with Wellspring allows us to help our members combat rising insurance costs through prevention, rather than by reducing benefits or shifting costs to the employee."

Wellspring’s behavioral and lifestyle wellness program includes five elements: assessment, intervention, education, access and incentivization.

Additionally, Wellspring concentrates on the "entire person" by including complementary, face-to-face health coaching services with its national network of certified health coaches to address behavioral and lifestyle changes, while incorporating a comprehensive employee assistance program (EAP) to address the behavioral, emotional and psychological factors that affect a person’s readiness for change.

Wellspring’s employee program includes benefits for the employee, spouse and dependents for $2.95 per month. That rate also is available for individual businesses in Wisconsin that want to implement Wellspring’s basic wellness program, according to Sonja Linsley, spokeswoman for the privately owned, McKinney, Texas-based company. Additional information is available at

"Our agreement with them (the MBA) does provide a discount to their members. However, we do provide programs to individual employers," Linsley told SBT.

For an additional fee, employers can implement Wellspring’s Functional Testing program, which can reduce workers’ compensation incidences 50 percent after just one year of implementation, Linsley said.

Thomas Montgomery, president and chief executive officer of Wellspring, said the savings are achieved: by not hiring the one out of 10 new hires who are unable to safely perform the essential functions of their job; by requiring medical clearance before applicants with existing carpal tunnel symptoms are hired; by avoiding injuries by proactively testing existing employees; and by accelerating a safe return to work to minimize, if not eliminate, indemnity claims.

"Employers recognize that the most effective way to reduce insurance costs, increase productivity and decrease absenteeism is to have healthy employees," Montgomery said. "Our programming positions employers of all sizes to affordably implement wellness and preventive programming."

The Wellspring programs will be offered to members of the MBA through Diversified Insurance Services Inc. of Waukesha.

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