MBA Class of 2011

“Ladies and gentlemen, insurance brokers and their families, please welcome the Class of September 2011. This is indeed a commencement address in its most literal sense. For the first time ever, brokers will have their professional training and experience give them access to Laurentian University’s online Masters of Business Administration (MBA) and Honours Bachelor of Commerce (HBCom) programs. [Wait for applause.]

“You know, addresses such as this one usually commemorate students for completing their academic requirements and then commencing to use this acquired knowledge in their daily lives. But this is a different kind of commencement address. This address signals the beginning of an academic program that has been at least four years in the making. It signals a long effort by Canadian insurance brokers across the country to deliver valuable, business-oriented education. By all accounts in broker circles, this Master’s program is described to be accessible, affordable, flexible and marketable. It is designed to help better-educated brokers gain an edge in their quest to perpetuate their brokerages, be they in commercial or personal lines.

This is the story of how brokers gained tailor-made access to Laurentian University’s online MBA and HBCom programs.

[Cue music: ‘Pomp and Circumstance.’] Starting in January 2011, applications will be accepted for brokers to enroll in Laurentian University’s online MBA and HBCom courses. The deadline for applications will be March 2011, and the inaugural program will begin in September 2011.

MBA PROGRAM FOR BROKERS

Laurentian University administers the program and has control over who qualifies for the online MBA and HBCom programs. Anyone can apply for the programs, not just brokers. The real coup for brokers is that, for the first time, Laurentian University is recognizing brokers’ professional experience and training designations to qualify brokers for entry into the online MBA program. Brokers wishing to enroll in the MBA program must be members in good standing with their provincial broker associations. They must have successfully completed a university degree or, alternatively, have a Canadian Accredited Insurance Broker (CAIB) or a Canadian Professional Insurance Broker (CPIB) designation with at least a 75% academic standing.

One additional wrinkle is that work experience may count towards qualification. For example, up to 25% of the online class might be accepted under the ‘mature student’ category. This would apply to managerial-level brokers who have completed their CAIB or CPIB training, but who may not have the prerequisite university degree. (Usually the percentage of students admitted under the mature student category is 10%.) Expanding the mature student category effectively gives weight to the professional experience of brokers who have 10 or more years of experience in the field. [Note they must still fulfill the CAIB/CPIB requirement.] It should be noted that for the past five years, chartered accountants have had a similar kind of arrangement with the university as brokers do now, in terms of having their professional courses recognized by the university.

For brokers, having the CAIB/CPIB designations recognized for qualification into the MBA program represents a feather in the cap for the Insurance Brokers Association of Canada (IBAC), which offers the designations. “It speaks tremendously to the quality, content and structure of the courses of the CAIB and CPIB program that a recognized Canadian university has looked at them and said, ‘Right, these are worth ‘x’ number of credits to a graduate level degree and to an undergraduate level degree,'” said John Penny, one of many IBAC committee members who have worked tirelessly to bring about the MBA program. “That speaks volumes. That’s unique.”

Laurentian’s 60-credit online MBA program is approved by the Ontario Council on Graduate Studies (OCGS). It offers courses in management science, accounting, finance, organizational behaviour, marketing, operations and strategy. In addition, it provides for advanced electives for students with an undergraduate degree in business. Each course in the program counts for six credits, so there are 10 courses in all to complete the degree. Professional designations such as CAIB/CPIB and a previous university degree may qualify applicants for advance credits, up to a maximum of 30 advance credits. A thesis option is also available.

All courses are delivered over a 13- week period. The courses will require learners to complete online group projects and to participate in weekly online discussions with their colleagues and course instructors. Most of the discussions will be ‘asynchronous.’ In other words, learners log on at different intervals in the day to post and respond to messages.

Students have a maximum of seven years to complete the online program, although most will likely be able to finish the MBA in approximately three or four years. This timeline could even be shaved down to one-and-a-half or two years, depending on whether or not the student qualifies for advance credits.

Each course is anticipated to cost somewhere in the ballpark of $2,000. Depending on how many advance credits a broker enrolled in the program might receive, the total cost of the online MBA program could cost anywhere in the range of between $10,000 and $17,000. “That is quite affordable when you think about what an MBA would [typically] cost,” says Sandra Parker, IBAC’s manager of professional development. “This is actually a really good cost.” In contrast, tuition fees for other professional schools such as law schools in Canada can run up to more than $10,000 in a single year. Parker says IBAC is committed to providing scholarship funds to help brokers overcome any financial barriers to taking the program.

As mentioned above, IBAC’s crowning achievement is gaining entry to the online MBA program through its professional designations. But Laurentian sweetened the pot by offering young brokers its HBCom program as well. HBCom does not have the special entrance arrangement for brokers as the MBA program does. To gain entry into the online HBCom program, which is likened to a university undergraduate program, a broker would need a college degree. (This would be opposed to a university degree, required for the MBA program.).The HBCom program would take about two to three years to complete. “Laurentian thought:’If you don’t have the 10 years of experience, for example, and you want to get involved, and you want to get some credits that you could use towards the MBA, you could take some of the HBCom courses online,” said Rod Hancock, CEO of Mc-Farlan Rowlands Insurance. Hancock worked on the online MBA file during his days as an executive member of the Insurance Brokers Association of Ontario (IBAO). To which Parker adds: “The nice thing about HBCom is that you don’t have to make a commitment to the HBCom upfront. You can take the HBCom courses without ever having to decide that you want to go through the [complete] HBCom [program].”

A LESSON IN PERPETUATION

Students are often called upon to defend the application of their studies in the so-called ‘real world.’ For brokers, the push for an online MBA program came from IBAC’s strategic plan, as well as executive-level discussions among IBAC committee members working on broker perpetuation. “If we remember where this came from, it was the gestation of an idea from a perpetuation strategies workforce,” says IBAC’s immediate past president Justin MacGregor. “And one of the things we talk about around the executive table is: Where are the new brokers going to come from? Where are the new start-up brokerages going to come from? And if you’ve got small, regional brokers that don’t necessarily have a clear succession plan, who are going to be the people that are going to step up to buy those brokerages and continue them in the future?”

Hancock adds the MBA program will be “a huge benefit to brokers,” especi ally in terms of perpetuating their brokerages. “That’s a big issue for brokers,” he said. “We’ve had succession planning events all over the place. And one of the best ways to plan for succession is to do [the MBA program] because it gives you enhanced capacity to run your business better. What you are going to learn there is really not about insurance, but it’s about operating your business. And as brokerages get larger and larger, which they are doing, you need more of a skill set to be able to handle problems you’re going to face, whether that’s in HR, finance, accounting or just operating a place that has 150 people.”

Perhaps not surprisingly, large commercial brokerages are particularly supportive of the online MBA program. “Younger guys, maybe with 16 years of experience, might be able to climb the ladder more quickly with an MBA,” observes Brian Wilcox, past president of the Toronto Insurance Conference [TIC], a commercial brokers association. “The MBA would open more doors to move up within the organization.”

The program would also help smaller, perhaps family-owned brokerages as well, MacGregor says. “If we’re going to look at our younger employees and our younger brokers in the community, they are going to need financing, they are going to need to be able to raise funds, to maybe make a partial acquisition or enter into an agreement over a number of years to acquire a brokerage from an existing owner. There are different sources of finance for that, whether it’s the banks or insurance companies. If we’re realistic, the professional moneymen are going to be a lot more comfortable supporting and lending money to brokers who have got these sorts of degree programs behind them. They will say: ‘They’ve got an MBA. They can clearly show they have the professional business skills to be able to put together the business plan and follow it through successfully,’ rather than ‘They are just successful insurance salespeople.'”

FULL SUITE OF EDUCATION

The MBA program now rounds out a full suite of IBAC education courses for brokers. IBAC’s CAIB and CPIB courses are designed to give brokers specific technical training in insurance. IBAC also offers brokers professional development training in the so-called ‘soft skills,’ including building relationships with consumers and effective sales techniques. Examples include the Professional Selling for Insurance Brokers program and the Elite Force-Best Practices Producer Academy. But up until now, there hasn’t been a program teaching general skills in running and managing a business. “Running a business has its huge challenges,” says Penney. “Having now allied with Laurentian to produce this MBA provides the business skills that we were lacking. I think that’s a tremendous asset for this profession. It’s one that’s unique because not every profession has this full complement, this full suite of products.”

How big a demand exists for learning how to run a business? “Certainly the interest level is something that we’ve been monitoring and have been kind of interested in ourselves for a number of years, because the IBABC originally pursued an MBA option as well,” says Insurance Brokers Association of B.C. (IBABC) executive director Chuck Byrne. “We considered it five or six years ago. There certainly was indication of interest then. I think it’s a growing segment — particularly when you consider the people who are most likely to benefit from it are the young and/ or senior people looking to move into ownership and management. Certainly, there’s a demographic shift in their favour. The best candidates are going to get the best opportunities. And clearly MBA programs like this are going to generate some very, very top candidates. This type of industry-specific MBA really does turns heads and it opens all kinds of opportunities for, say, junior partnerships and within some of the larger brokerage operations in B.C.”

Parker points to a nation-wide study IBAC conducted in 2008 to gauge interest in the possibility of an online MBA program. “Two thousand and sixty-nine brokers replied to the cross-country survey we did,” she says. “Ninety-six per cent of the respondents felt this was a worthwhile endeavor and that we should go forward with this, an overwhelmingly positive response.” The same survey provided some insight into how many potential candidates already had the prerequisite requirements for the MBA program. Sixty-two per cent of the survey respondents, for example, had 10 or more years of experience in the insurance brokerage business. Sixty per cent had a post-secondary education.

Anecdotally at least, people have been asking IBAC executives about the program. MacGregor has been crisscrossing the country on IBAC business throughout his one-year term as IBAC president. “Lot’s of people have asked me: ‘What’s happening with the MBA? When is it going to be ready?'” Now that the launch is finally official, “we’re really looking forward to it,” he says. “My prediction is we’re going to be very pleasantly surprised by the take-up.”

ACCESSIBILITY AND FLEXIBILITY

Flexibility and accessibility are two central features recommending the online MBA program. Geography is no object with online distance learning, an accepted part of contemporary education.

The online MBA program is modeled after Laurentian University’s campus program that has been offered for more than 20 years. However, the online MBA has no on-campus requirements. Brokers from across the country can take the courses from anywhere, since the courses are delivered online. There is no need to make a run on IKEA furniture and seek accommodations in Sudbury, Ontario, where Laurentian University is physically located. The online courses will often involve working on case studies. Interactions between students and faculty are ‘asynchronous,’ which the dictionary defines as: ‘Not occurring at the same time.’ In other words, students can log into a chat room or post messages on message boards at one point in the day, log off, and then can log in later to see if there has been a response.

“One thing the brokers on the team [pursuing the MBA] were very concerned about when they looked at the post-secondary educational experience for brokers is that brokers can only find little bits of time to do education because of the way their schedules are,” says IBAC CEO Dan Danyluk. “And one of the unique things about [the MBA] discussion groups is that they are asynchronous, which basically means it’s online and you can do it anytime. If the best time for you is 2 am, because you have a little one at home who has kept you up, and you can’t fall back asleep and you want to go online and participate, you can do that. That’s pretty amazing to me.”

One IBAC committee member working on the MBA file is considering becoming one its first students. Stephen Halsall, vice president of IBAC, said the program is attractive to him because it will allow him to learn without having to relocate or take significant time away from his brokerage. “I’ve always thought of taking the MBA,” said Halsall, a broker in Saint John, New Brunswick. “My biggest problem is that I’m running a small business and involved in the provincial and national associations. Whenever I looked at some of the programs the universities had to offer, I didn’t have the time to go away for weeks or months. You don’t have the time to go on a course for one year at a time like some employers can do to nurture their employees. This provides me with the opportunity to work towards my MBA on my time.”

Time away is often anathema to a broker running a small or family business, says Penney. “Most of us cannot put our businesses on hold, because if we put our businesses on hold for a year or two years, it’s not going to be there,” he said. “It [the MBA program] had to have the characteristic that it can be done simultaneously with normal day-to- day life — raising a family, running a business and doing those other activities that ma ke up everybody’s lives.”

The problem of taking time away from the business is also a factor in large, corporate commercial insurance operations. “In terms of the larger commercial brokerages, this is extremely exciting for them,” MacGregor says. “Larger brokers very often will recruit employees from different walks of life and straight from school. In many ways, ours is a career where you don’t go away to school to learn to become an insurance broker: it’s something you learn inside an insurance brokerage. Up until now, the only choice for commercial brokerages wanting to fast-track people into management positions or into leadership positions was probably very expensive courses. People would be taken out of their professional environment, out of their work environment, and have to go away for weeks or months at a time. There is nothing wrong with that, but this creates for them a very exciting and cost-effective alternative. Commercial brokerages can probably fast-track a lot more people with business skills than they’ve ever been able to before.”

Commercial and personal lines brokers alike say the opportunity to take an MBA may in fact provide an incentive for brokers to go back and complete unfinished CAIB and CPIB courses. “In order to enter the [MBA] program, brokers need their CAIB or CPIB and some people have left it with one course left, or they didn’t finish it because they had families or businesses or something else — they had no time,” observes Halsall. “But this will drive some of those people who want to take [the MBA] to finish that course to move on towards the future.” Danyluk said applications to the online MBA program are scheduled for January 2011 in part to allow brokers some time to brush up on their CAIB/CPIB training in preparation for the MBA.

In the meantime, brokers are toasting the arrival of the MBA after many years of determined effort working with Laurentian. “It’s been four years, which shows you can’t create these things overnight,” says MacGregor. “It’s been through numerous pairs of eyes of IBAC committee chairs. John [Penney] has worked on it pretty solidly for the past two years. That’s allowed us to bring it to conclusion now. I think we now have a full and complete suite of both professional/technical training and also the business training that future brokers need. It’s really exciting.”

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It speaks tremendously to the quality, content and structure of the courses of the CAIB and CPIB program that a recognized Canadian university has looked at them and said, “Right, these are worth ‘x’ number of credits to a graduate level degree and to an undergraduate level degree.”

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We’ve had succession planning events all over the place. And one of the best ways to plan for succession is to do [the MBA program] because it gives you enhanced capacity to run your business better. What you are going to learn there is really not about insurance, but it’s about operating your business.

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If we’re realistic, the professional moneymen are going to be a lot more comfortable supporting and lending money to brokers who have got these sorts of degree programs behind them. They will say: ‘They’ve got an MBA. They can clearly show they have the professional business skills to be able to put together the business plan and follow it through successfully.’

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Most of us cannot put our businesses on hold, because if we put our businesses on hold for a year or two years, it’s not going to be there. The MBA program had to have the characteristic that it can be done simultaneously with normal day-to-day life — raising a family, running a business and doing those other activities that make up everybody’s lives.