The Tippie College of Business at the University of Iowa will offer a new undergraduate major in risk management and insurance starting in the fall of 2023, a move aimed at helping to strengthen the state’s prominence as an insurance hub. University officials believe the new major will grow to be comparable to other leading nationally ranked programs.

The new major, which will be offered in addition to UI’s existing insurance and risk management certificate program, was approved Wednesday by the Iowa Board of Regents. The major will be housed in Tippie’s Department of Finance and award a Bachelor of Business Administration (BBA) degree.

“The insurance industry is a major economic force in Iowa, and the university has a deep history in risk management and insurance education,” said Terri Vaughan, a prominent leader in the insurance profession and director of the college’s Vaughan Institute of Risk Management and Insurance, named for her father, Emmett Vaughan. “This is a great opportunity to build on that history while supporting the future of Iowa’s industry and providing students with outstanding educational and career opportunities.”

More than 60,000 Iowans work in the insurance and risk management profession, which makes up 11% of the state’s economy. Several major insurance companies are based in Iowa or have a significant presence in the state, including Principal Financial Group, EMC Insurance Cos., United Fire Group, Transamerica, Athene USA, W. R. Berkley and Farm Bureau.

Thomas Berry-Stoelzle, associate professor of finance, Nationwide faculty fellow, and faculty director of the Vaughan Institute, said Tippie has long worked closely with those companies. The college has for many years offered an insurance certificate for students interested in pursuing insurance careers, and the Vaughan Institute educates students for careers in the field and oversees faculty research.

UI officials said that no university in the state currently offers a full-scale risk management and insurance major, but Drake University currently offers a minor in RMI.

Programs in the related field of actuarial science have grown in prominence in Iowa in recent years. The Ivy College of Business at Iowa State University launched an undergraduate degree program in actuarial science in 2019. Also, Drake University’s School of Actuarial Science and Risk Management in December 2020 received a five-year renewal of its Center of Actuarial Excellence accreditation by the Society of Actuaries.  

David Spalding, Raisbeck endowed dean of the Ivy College of Business, said that starting an insurance undergraduate program is a possibility for his college. “We are definitely looking at ways to better serve the insurance industry,” he said. “We have certainly thought of a major in this area, or maybe a minor or an undergraduate certificate. … It’s a strong industry for the state of Iowa. We’ve got very good partnerships with companies like Nationwide, EMC, Principal and others. We are constantly in discussion with them about how we can meet their needs for talent.”

The Ivy College’s actuarial science program, now in its third year, has “performed well for us,” he said. “I would say there is strong demand out there for actuarial graduates. Since we just launched it three years ago, there are just a handful of graduates, but strong interest from employers in hiring graduates from our program.”

Tippie’s Berry-Stoelzle expects the new risk management and insurance major will eventually enroll up to 80 students annually. He said the college will also continue to offer the insurance and risk management certificate. Among universities with top-ranked risk management and insurance programs, the average and median enrollments each exceed 400 students, and UI anticipates reaching that enrollment level for its program within the next 15 years.

Michael Gould, business development manager with the Iowa Economic Development Authority, said insurers are looking forward to the new program, because there is an urgent need for more people with an insurance education.

“Companies tell me they want to grow in Iowa, but we just don’t have the labor market,” Gould said. “We hope this new major will open the pipeline and we can get more flow of human capital going back and forth between the industry and the University of Iowa.”