Leadership 2.0: Interns
A Talent Advantage
Insurers that offer college internship programs have an opportunity, in a hot job market, to get an early start on identifying promising job candidates.
Photos by Scott VanDemark.
- Falling Behind: Companies that don’t have an internship program may have a harder time attracting candidates for full-time positions.
- The Opportunity: Internships should offer students a genuine work opportunity.
- The Payoff: Internships involve a commitment of time and money. But those that have them say they are worth the expense.
It’s an investment…but certainly a much cheaper investment than hiring the wrong person at a starting salary, and then having to replace that person after they leave.
Munich Reinsurance America
Companies looking for a head start in the race to attract new talent need to have an internship program, industry experts said.
Internship programs not only help students in their search for a full-time position. They help businesses gain an edge over competitors in the hunt for talent, locking down promising candidates before a rival has a chance to do so.
Reliance Standard Life Insurance, a unit of Tokio Marine, for instance, likes to hire the majority of its entry-level positions through its internship program, said Patrick Wicks, director of talent acquisition for Reliance Standard.
“We do have an advantage over other companies without an internship program,” Wicks said. “Companies need to get it together or they will miss out.”
Decker Youngman, chief recruiting officer for independent insurance broker Brown &Brown, said many companies hire directly from their internship programs. “So if you're not doing an internship program, you're really missing out,” he said.
Competition for new talent is fierce, driving many companies to offer jobs to risk management and actuarial college students months before graduation.
The finance, insurance and real estate industries have an “intern conversion rate”—or the rate in which employers hire their interns full time—of about 48%. That's roughly in the middle of the pack of all industries, according to a study by the National Association of Colleges and Employers.
Robert Drennan, professor and chairman of the risk insurance and healthcare management department at Temple University, said there's room for the insurance industry to improve.
“There are companies that only hire seniors; they don't have an internship program. Quite frankly, I think they have a tougher time attracting full-time students than those companies who make the investments in internship programs,” Drennan said.
Temple emphasizes the importance of students having a summer internship, for good reason: In a typical summer, about 60% of students come back with a job offer in hand, he said.
If insurers, brokers and insurance consultants lack an internship program “in terms of our total talent pool, they're not seeing it all because many students have already been locked up by someone else,” Drennan said.
At an October 2018 job fair in Philadelphia for Temple's December 2018 and June 2019 graduating risk management and insurance students, 46 companies came to recruit about 125 students. Of the entire senior class, an additional 75 students had already accepted job offers following a summer internship and didn't attend the job fair.
“There's a lot of employers here who know there's a big talent gap. We're here to find students interested in our particular area of the industry,” Sharon Gallagher, campus recruiting and talent development manager at independent wholesale broker All Risks Ltd., said during an interview at the job fair.
She said All Risks launched an internship program in 2006.
“Internships are a great way for students to learn about the industry,” Gallagher said. “We use it as a job interview, and we want them to use it as a job interview, too.”
Reliance Standard also offers its student interns the opportunity to work for the company part-time during the school year if their schedules allow.
We can’t attract students into this major unless we know there are internships and jobs waiting for them.
Not Making Copies
Internships should offer students a genuine work opportunity, not just scutwork, said Noelle Codispoti, executive director of Gamma Iota Sigma, the international collegiate fraternity for students pursuing careers in risk management, insurance and actuarial science.
“These are paid internships. Students are expecting to do real work, and provide a value to companies, and to get a fruitful experience out of it,” Codispoti said.
During her summer internship at Munich Re, Avery Fink, a double major in risk management/insurance and finance/banking from Appalachian State University, said her projects included helping to develop pricing benchmarks for specialty markets.
”I had learned a little bit about reinsurance in my classes, but it's a little different coming from a textbook than it is having real, hands-on experience,” Fink said.
At his summer internship at AM Best, Robert Lippert III, a risk management student at St. Joseph's University, said he “hit the ground running.” During his internship, Lippert completed a report comparing the insurance vs. reinsurance books of 25 insurers.
“I felt I was more a part of the team rather than just an intern,” Lippert said. “Reading textbooks and going to class can only help you so much.”
Those are the types of responses from interns that recruiters want to hear.
“We don't want them to walk away thinking, 'Oh, I spent eight weeks or 10 weeks or 12 weeks getting coffee, scanning and copying,” said Genevieve Glenn-Shipmon, resourcing and recruitment manager for AM Best.
As baby boomers hit retirement age, it's estimated the insurance industry will have nearly 400,000 open positions by 2020 according to the Insurance Careers Movement, a group of 850 industry organizations that promote insurance careers.
With record low unemployment rates and less than 5% of millennials interested in working in insurance, the industry needs to do more.
For recruiters, it's difficult to go to a college without a risk management program and get much traction.
“The general public outside of a risk management program doesn't understand the unique opportunity in insurance,” Brown &Brown's Youngman said. “The industry needs to do more to get the message out, and really invest in schools, not just show up at career fairs.”
Drennan said Temple is fortunate because of the industry support it receives. “We can't attract students into this major unless we know there are internships and jobs waiting for them,” he said.
Return on Investment
As competition for internships grows more intense, companies have raised the average hourly wage for interns to $18.73, according to NACE.
Over the years, it has become more and more common for employers to offer their interns an array of benefits. “This may be due to a more intense focus on converting these students into full-time employees,” NACE said in the study, The 2018 Internship &Co-Op Survey Report.
The most commonly offered benefits to interns and co-ops in 2018 were planned social activities and paid holidays, which typically are the least expensive for employers to offer. Conversely, other benefits, such as medical benefits and 401(k) matches, dropped in 2018 vs. 2017. According to the survey's 309 respondents, in 2018, 17.9% of employers offered medical insurance to interns down from 48.1% in 2017, and 26.0% of employers offered company-matched 401(k) plans, down from 50%.
Jessica Pruiti, talent acquisition partner for Munich Reinsurance America, said internships are worth the expense.
“It's an investment…but certainly a much cheaper investment than hiring the wrong person at a starting salary, and then having to replace that person after they leave,” Pruiti said.
Like dropping a pebble in a pond, an internship can cause bigger ripples for the company.
“If more companies hired students as interns, gave them really good experiences, then their reputation is enhanced among future leaders in the insurance industry. It's really a payback,” Temple's Drennan said. Some smaller companies without a national reputation have lines of students waiting to speak to them at job fairs “because they know from their peers that they have great internship programs,” Drennan said. “It's an investment for companies. It's a lot of legwork. But the payoff is tremendous.”