The Butler University College of Business in Indiana is creating a student-run captive and aims to have it fully operational by the 2019-2020 academic year.
The insurance company will open using a $250,000 gift from MJ Insurance and its CEO, Michael Bill. The money will cover the minimum amount of capital that’s needed to fund the captive, and the college of business also will be soliciting gifts to fund operating costs.
The Butler captive will insure certain programmes, including the live mascot, Butler Blue III, and any physical damage to university vehicles.
The aim of the captive is to give students hands-on experience and prepare them for an industry that expects to need tens of thousands of new employees over the next seven years, according to Butler University College of Business dean Steve Standifird.
Zach Finn, clinical professor and director of the Davey Risk Management and Insurance Programme, who will supervise the students, commented: “This captive insurance company builds on Butler’s model of experiential learning.”
“We have students who manage a $2 million financial endowment, and many universities around the country do that. There’s no reason students with the proper setup couldn’t manage an insurance company.”
Finn added that the programme will give students the opportunity to look at risks faced by the university, assess the financial impacts, and determine whether the risks would be best retained and paid for with university assets as they occur, through traditional insurance markets, or through a captive insurance company.
Students will learn how to write insurance policy, what the coverage terms will be, how to finance the company, and more. They will also be able to apply their risk management expertise in accounting, investments and numerous other areas.
