Managing Risk

New Business Concentration Meets Broad Industry Needs

February 23, 2010

By Pamela McLaren

Jim Gutmann Lecture Series

In addition to the coursework, students can learn more about the field by attending a lecture series named after alumnus and insurance industry professional James E. Gutmann.

The lecture series was created to broaden the perspective of how the field can be used in a wide range of industry, said Lu. “It can introduce students to how risk management principles are applied in both long-term planning and in the daily operations of both large and small businesses across the entire spectrum of all industries. It also introduces them to some of those who have worked for many years in this area including people like Jim.”

A principal in Tustin-based Wood Gutmann & Bogart Insurance Brokers, Gutmann (M.B.A. ’80) entered the insurance industry after a 15-year career as a nuclear engineer. He kicked off the lecture series that bears his name last August, discussing the careers available in insurance and risk management.

“This very unique program has successfully introduced students to the many opportunities for rewarding careers that the insurance industry has to offer” said Gutmann, a member of the dean’s advisory board and a long-time supporter of his alma mater. “ It has established a critical pool of talented candidates who will surely dominate the future leadership of the insurance industry in Orange County and in the greater Los Angeles area.”

This spring, students will have the opportunity to hear from:

Grace M. Crickette, chief risk officer, UC Office of the President — March 16
Don Martin, author of “The Risk Takers” — April 13
David L. Ruhm, chief actuary, First American Corp. — April 27
Steve Wilder, vice president of risk management, Disney — May 11

For more information, call the Center for Insurance Studies at 657-278-2045.

Vanessa L. Goulet, who works for Travelers Bond and Financial Products, and Jill Chi, an underwriter for ACE USA, are working to strengthen their skills and marketability in their field.

Goulet and Chi are just two of the 28 students working toward a Cal State Fullerton MBA with the new concentration in risk management and insurance. Broad industry interest and support helped facilitate the new program, which is the only one of its kind in California.

“I became very involved with the insurance program during my junior year,” said Goulet (B.A. business administration-finance ’07). “I think the best part about the program was its connection to the industry. I felt going through the program at CSUF would help me improve my insurance ‘lingo’ and help me better understand the industry.

“I also was attracted to all the opportunities,” Goulet added. “The program really succeeds in connecting the industry professionals to the students. The largest (insurance) carriers have training programs for their new recruits. However, it is very difficult to get hired at some of these companies.”

This program “makes it a little bit easier to get connected.”

Jill Chi was so interested in the program that she started taking courses while still an undergraduate last fall. “There’s a definite need for this type of program,” she explained. While her prior experience has been as an insurance agent, “this is really different experience for me. I have enjoyed the classes because it’s a new perspective for me and I see this as a future trend.”

“Risk management is a broad academic field, which can include traditional insurance related risk management — earthquake, hurricanes, fire, life, health and retirement planning — as well as financial risk, such as interest, exchange rates and credit,” said Weili Lu, director of the Center for Insurance Studies and associate professor of finance.

“The most cutting-edge theory or practice in the field is called enterprise risk management, which can be defined as a framework for managing credit, market, operational risk, as well as economic capital and risk transfer in order to maximize firm value,” she added. “Insurance as a discipline is only part of risk management — it has now become a comprehensive field that includes actuary, finance, accounting and management.”

New Concentration, New Courses

“Our risk management concentrations in both undergraduate and graduate levels are aiming at staying on the frontier of this discipline,” explains Lu. As part of the new 12-unit concentration, Lu is team teaching “Enterprise Risk Management Seminar” this semester, with Stephen P. D’Arcy, professor of finance and the John C. Brogan Faculty Scholar in Risk Management and Insurance at the University of Illinois, Urbana-Champaign.

“The course is heavy on current events and issues related to risk management,” said Lu, who had D’Arcy as a mentor while earning a master’s degree and doctorate at Urbana-Champaign. “We’re one of the few universities, worldwide, offering this course, which provides MBA students an eye-opening opportunity to get into this new field.

“As part of the class, we are bringing in scientists and risk management experts, insurance industry leaders and authors who can discuss the full range of risk management — not only insurance, but management and accounting fields dealing with disaster planning and recovery, fraud and forgery, theft and terrorism.”

Introduced last fall was “Corporate Risk Management and Insurance Seminar,” which focuses on the management of risk with diversification, capital structure, loss control and corporate governance. The course, which also will cover how to analyze and minimize risk, will be offered during the fall semesters.

Other courses in the program are: • Professional Ethics, Compliance and Insurance Regulation • Business Property/Liability Risk Management • Life and Health Insurance • Theory and Practice of Personal Financial Planning • Retirement and Estate Planning

Business Sense

“I was attracted to the risk management and insurance program because it offered a highly applicable and employable set of skills needed for a great career as an actuary,” said David Pane, an actuarial analyst with Pacific Life, who completed his studies in January.

“My background in insurance through CSUF helped me get my job at Travelers,” said Goulet. “When I applied, they already had two trainees and were not anticipating hiring anyone else. However, then they saw my resume with some background in insurance, they hired me on the spot. These classes are being taught by the best professors and really provide some insight into the industry.”

Considering the new program is senior accounting major Anthony Kress. “I thought about it and it makes sense. Every individual and almost every company pays for insurance in one way or another and a lot of money usually ends up there.”