Drake Management Review

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Now showing 1 - 5 of 52
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    Weathering the Storm: Evaluating Captive Insurance for Iowa Cooperatives in Crisis
    (Drake Management Review, 2023-04) Bujakowski, Douglas; Kievits, Rick
    Iowa agricultural cooperatives are facing a crisis in obtaining affordable and comprehensive property and casualty insurance due to the withdrawal of major carriers and significant increases in premiums and deductibles. The regulatory requirements for property and casualty insurance and its importance for securing commercial loans make this crisis particularly concerning. This paper examines captive insurance as an alternative for Iowa cooperatives, outlining the benefits and challenges of a self-insurance model. While captive insurance offers customization, potential cost savings, tax incentives, and risk management benefits, cooperatives must consider high start-up costs, limited risk pooling, and selective admission. The paper also discusses strategies for overcoming these challenges, such as purchasing reinsurance and diversifying captive membership. The issue will be further explored at an upcoming cooperative CFO conference in June 2023.
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    Career Opportunities in the Iowa Insurance Industry
    (Drake Management Review, 2023-04) Croft, Kevin
    The Iowa insurance industry is an economic powerhouse, creating an $8.9 billion impact in the Des Moines – West Des Moines MSA alone. The industry’s scale has spawned two start-up accelerators focused on insurtech, each with a global reach. The Iowa workforce has experienced twenty-five percent growth since 2000. Insurance carriers are attractive employers exhibited through a high level of compensation, wage growth at a rate above the national average, and a suite of employee benefits that are generous, flexible, and well-aligned with the desires of generation Z. Over the next decade, nearly twenty percent of the workforce will reach retirement age. This retirement wave will create rapid advancement opportunities for younger employees, especially those with skills in technology, data analytics, distribution, and product development. The demand for actuaries is expected to grow at a rate three times greater than the average occupation while actuarial compensation exceeds the median annual salary of other mathematical science occupations. Actuarial careers are consistently ranked among the best in both business and STEM fields and have above-average upward mobility.
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    Suggestions for Solving Cheating Scandals at Public Accounting Firms
    (Drake Management Review, 2023-04) Simms, Kathryn; Li, Yiwen
    The purpose of this paper is to provide suggestions that may help to resolve problems that public accounting firms have experienced with employees cheating on the AICPA’s ethics exam and on training exams, including Continuing Professional Education (CPE) exams. To form these suggestions, we analyzed the recent cheating scandal at Ernst & Young (EY) that was widely publicized in June 2022. Our suggestions include: (1) impose more effective penalties and deterrents; (2) redesign the ethics exam; (3) implement mandatory time for CPE and provide confidential outplacement services, and (4) rethink CPE requirements for the profession as a whole.
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    Food Stamps: The Impact on Consumer Expenditure Behavior
    (Drake Management Review, 2022-10) Schlotterbeck, Bryan
    The Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, is one of the largest and most important federal assistance programs provided by the United States government. The purpose of the program is to promote proper nutrition for low-income consumers. This paper analyzes the effect of SNAP benefits on consumer spending behavior. Using survey data on food expenditures from 2012-2014, regressions were run on how receiving SNAP benefits impacted average weekly expenditures for different categories of food. The results indicate that SNAP-receiving households spend less on total food per week compared to non-recipients. In addition, SNAP benefits correlated with higher expenditures on unhealthy food, with inconclusive evidence on how the benefits impacted spending on healthy foods. This indicates that the purpose of SNAP is not being fulfilled as intended.
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    Investing in Innovation: An Insurance Carrier’s Guide to Insurtech Engagement
    (Drake Management Review, 2022-10) Ekholm, Jack; Ching, Paul; Thompson, Michael; Veeraphan, Dew
    In a heavily digitized world of speed and convenience - where anyone can purchase groceries, hail a driver, and file their taxes from the comfort of home with just a few clicks or taps - consumers demand ease in everything they do. These expectations do not stop short of the insurance experience, and companies that fail to modernize and accommodate them will surely be left behind. Insurers need not fear, however, as substantial opportunity and assistance exists in the growing landscape of insurance technology (“insurtech”). This report aims to provide a comprehensive guide to properly navigating and taking advantage of insurtech for insurance carriers. Despite its overarching theme, insurtech comes in infinite forms, with a variety of specific objectives, for use by every party in the insurance industry. Therefore, the first section of this report breaks down the complexities of insurtech to define it broadly, explain its origins, and analyze leading technologies in the space. In addition, the first section further explores why insurtech relationships are almost always necessary for survival as a carrier, regardless of the difficulties they present. Broken into the five main stages of insurtech engagement, the second section draws heavily from our interviews with insurance innovation leaders to emphasize the most crucial action points for maximizing success in each step. This includes assessing resources such as budgetary capacity and human capital to determine whether external innovation is optimal, utilizing a variety of sources - most importantly insurtech accelerators - to stay informed of insurtech trends and offerings, and creating a standardized process for testing and evaluating potential solutions. Assuming a desired and compatible insurtech is discovered, we discuss how a carrier’s needs and capabilities dictate its form of engagement (i.e., partnership, acquisition, or other) and provide essential considerations for fostering a fruitful insurtech relationship of any structure. The third and final section of the report summarizes our findings and highlights prominent technologies such as blockchain that are predicted to drive the future of insurtech. Lastly, we encourage carriers of all sizes to prioritize their technological advancement by devoting resources to insurtech learning, testing, and investment.