The Historical Compendium of URMIA
August 1986
Written by Charles D. Emerson, DRM, University of Kentucky and President of URMIA in 1980-1981.
Foreword
Time flies, colors fade; sounds are lost... oft repeated phrases. The compendium which follows is a five-year effort to bring together the significant factors of growth and development of the University Risk Management and Insurance Association (URMIA) since its inception in 1966. It has the dual purpose of informing the membership and providing an update of the URMIA archives to be catalogued and kept in the special collections department of the Margaret I. King Library of the University of Kentucky. While attending the URMIA Annual Conference in Chicago in 1981, Reina Schlager agreed to serve as author and editor. Notwithstanding the availability of Board minutes and published newsletters, much of the historical background was derived from the files of personal communications between the founders.
Reina's efforts involved countless hours of sifting, sorting, and interviewing source persons identifiable as the "Amtrak Consortium." The untimely loss of George Reese from that group was a significant factor in pointing to the need for this document. William Hustedt, Don Thiel, John Howard, and Bob Beth provided information and photographs of early conferees that will be of profound interest, now and in the future.
We asked each past president to furnish a brief report for this update and for eventual filing in the Archives. Despite repeated requests, the response has been limited, though effective. It is hoped that each subsequent retiring president will provide a brief record identifying the presidential problems and actions, as well as experiences of general interest corresponding to his/her term in office.
In 1985, Lorrie Neiburg agreed to edit and complete the task which has lingered so long. Through her dedication and efforts, we submit this document which we believe the membership will find interesting and informative.
Lorrie's remarks to me on submission of the final draft deserve your consideration:
"I'm struck by the fact that the early history of URMIA closely matches what is happening now. URMIA has indeed come 'full circle,' and the problems of the 1960s, which motivated the establishment of the institution, still exist today."
Thank you, Lorrie, for that and more.
Charles D. Emerson
Date: 9/23/86
Setting the Stage: 1963-1965
It was the best of times, it was the worst of times. Woe to the insurance manager! The late 1960s were a time of social revolution, which affected all institutions of American life. Colleges and universities progressed in perspective and method, yet suffered from student protest. This protest was sometimes violent and destructive and sometimes demonstrative and constructive. In either case, protest was always costly to the university. Money was needed for policing, repairs, clean-up, and protection.
To insure themselves against damage to property, universities turned to their insurance carriers. Unfortunately, the only salve was something like half the insurance protection at twice the price. Universities suffered from extreme increases in fire and liability insurance premiums and the tripling, even quadrupling, of deductibles. The industry increased its rates on everything - from married student housing to investment properties to gift properties to mortgage properties.
Two other major factors contributed to the insurance dilemma faced by colleges and universities during this time. Conglomerates had purchased many major insurance companies and created pressure for them to make larger profits, which meant higher premiums. There was also inflation. The lack of the insurance company's capacity to handle all markets coupled with low returns or profits to members or stockholders made the insurance industry a seller's market. The insurance manager was becoming an important species in the insurance ecosystem.
In October 1963, William Hustedt of the University of Wisconsin wrote to College and University Business asking whether a risk management association on the educational level existed or if one was being organized. The editor knew of no such organization. Hustedt's request is significant in that it reflected the growing needs and awareness of college and university risk and insurance managers.
Prior to 1965, the insurance managers of Pennsylvania, Rutgers, and Brown met informally and talked about creating an organization consisting of college and university insurance managers. Then in April 1965, College and University Business published an article on a new insurance plan by the Insurance Company of North America (INA) for the University of Pennsylvania. This set off a series of letters from Hustedt to Rodney Pyfer, author of the article. In their communications regarding insurance policies and programs, they realized that they and their institutions shared common problems. In November of the same year, Pyfer sent letters to 12 Eastern universities. Enclosed was a survey regarding the status of the school's insurance manager, if they had one, and a list of tentative topics that might be discussed at a meeting to be held in the near future. In a January communication to Hustedt, Pyfer mentioned that progress was being made on the "seminar idea" for the Eastern institutions. He also suggested that Hustedt and James Gallivan of Illinois start something similar in the Midwest, with both groups perhaps merging eventually. The Western banner was taken up in January 1966. Hustedt created a letter similar to Pyfer's, though his questionnaire and suggested topics were more exhaustive. Copies of this were sent to the Big 10 schools, Notre Dame, and Marquette.
It should be noted that both the Eastern Group and the Western Group felt that the idea of an insurance managers' meeting would work best with only a few larger institutions with some natural division. The hope was to accomplish a close personal friendship among the managers, and to avoid unwieldiness.
The First Meetings: 1966
One must also remember those pre-riot years. Administrators and business managers were tight with money and highly suspicious of these new insurance or "risk" managers. Any kind of gathering or conference for such new "professionals" appeared unnecessary, unimportant, and, therefore, frivolous. Managers traveling from the Atlantic Seaboard to the Great Lakes would risk paying travel expenses out of their own pockets. Thus, in the formative years, there existed a common interest and a desire to be close but a lack of solid organization in both groups. Distance and shortage of funds kept the groups separate.
The first formal meeting of insurance and risk managers took place at the University of Wisconsin at Madison on Tuesday, April 12, 1966. Those who attended constituted what is referred to as the Western Group. Though this meeting may have been spurred by Pyfer, Hustedt's vision of some kind of meeting and organization had formed well before any contact between the two men. Seeing that it was indeed possible to set up and have such a seminar among Eastern universities (the first of which was still in the works), the Big 10 universities could do no less than have a "get-together" for their region. Topics for discussion were determined by a survey of the Western Group's managers as to what their greatest interests were at the time. Topics for the first meeting included risk management; fire insurance; manuscripts, packages, and standard policies; general liability; Medicare; and future meetings. Six topics were discussed in a period of seven hours, which included lunch. There were no "outside expert" speakers, only discussion among themselves. While they could not get into anything very deeply, they found the interchange definitely worthwhile. As was hoped, a lot of personal exchange took place during breaks and meal periods.
Finding the first conference a success, those in attendance saw that more of such gatherings would be beneficial. In fact, they had so many things to discuss that they decided they should meet twice a year. The Western Group saw that they needed additional expertise to discuss new topics and solve new problems and desired more structure and procedure at the meetings. Interest or pressure from administrative officers regarding the proceedings and value of the first meeting and possible future meetings was one factor influencing the group's introspection and need for more structure.
Another factor which influenced the Western Group's future organization (and the University Insurance Manager's Association) was the first meeting of the Eastern Group. This meeting was held at the University of Pennsylvania in June 1966, two months after the Western Group's conference. Those invited were major universities of the mid-Atlantic and New England states and were referred to as the Eastern Group. Pyfer had been planning and organizing for this "seminar" since November 1965 when he had had various communications with Hustedt. Topics for discussion were determined by a survey of interests of the managers. Among the areas presented was "The Growth of the Risk Management Concept and Its Implications," which ranged from informal talks to an open panel discussion with members of the university's insurance faculty. There were no outside speakers, and presentations and remarks came from the insurance and risk managers, university officers, and faculty. All seemed to feel that there was great value in this type of association, particularly when one or two schools could privately discuss a mutual problem or concern. The next Eastern meeting was set for some time in the fall of 1966, and the composition of the group, at least for the time being, would remain as originally conceived.
Establishing UIMA: 1966
To some degree, the outcome of the Eastern Group's seminar combined with the outcome of the Western Group's conference influenced the second and following meetings of both groups. Each group's knowledge of the other's needs, interests, and success affected each group's perspective and future plans. In the not-too-distance future was union, but the immediate needs of each group differed. Both groups' immediate needs pointed to future meetings that followed an informal, simple format; neither group was ready to develop an official combined organization and a corresponding constitution or guidance documents. The second meeting of the Western Group was set for October 17 and 18, 1966, at the University of Minnesota. It was recognized that more time for discussion was needed, especially on the evening before formal discussions and talks. The attempt was made to delve into all ramifications of a few topics, rather than to go through a general overview again. The first true "outside expert" speakers were presented at this meeting. These included a presentation on "Electronic Data Processing Coverage" and a panel discussion led by three insurance industry people on "Malpractice Liability Coverage." Though the addition of outside speakers was considered beneficial, it by no means overshadowed the meeting in importance. At that meeting, as at the first, it was the personal exchange between managers which was of most benefit. This feeling was corroborated by the outcome of the Eastern meeting the following month.
The state of future meetings between these Western managers was of issue. One member suggested, after the April meeting, that an extra half-day be taken to discuss and establish the scope, size, and general requirements of the organization. First, it was suggested that, for the time being, the representative of the host university also be the program chairman, rather than have a separate person serve as such. The host chairman could expedite arrangements as he would be familiar with his university's procedures. Second, some type of constitution for this group of insurance managers was desired, and even thought of as necessary, if the group was to exist as an official forum. Just who would constitute this group was the major point. Some managers thought the group should be limited to the Big 10; the Big 10 and Big 8; only 20 - 40 Midwestern schools; and a couple who felt membership should be unlimited. Though all institutions suffered the circumstances of the times, it appeared that those Western managers believed they had more common problems and solutions among each other rather than collectively with the Eastern universities. For the ease of transportation, the group would remain focused in the Midwest.
A constitution was drafted and approved by the Western Group together with the name, University Insurance Manager's Association (UIMA). The term "midwest" was discussed as a prefix to the name but lost on a vote of seven to five. Indeed, there was a feeling that the organization would soon be a national group. The constitution they adopted was a pretty wide open document, and there was nothing in it to confine the members to a regional membership. The purpose, objectives, and function of UIMA as set in the Constitution came from Thurman J. Brown of Purdue University. The Western Group also decided to use Robert's Rules of Order. At the meeting, Ray Archer, Minnesota's representative, wanted the vote to be taken and called for the Question. The first president, William Hustedt, being unfamiliar with the Rules, responded with, "What is it you want to ask?" The response from Archer was, "The question." The same sequence was repeated with Hustedt not understanding the request. Therefore, the president called on two or three other people to make comments. Again, Archer called for the Question. Archer, noting the president still did not understand and being the gentleman he was, very politely said to Hustedt, "Please call for the vote and tally the results." The light immediately lit in Hustedt's mind, and the situation never occurred again.
The First Combined Meeting: Late 1960s
Thus, the second meeting of the Western Group extended to about one and a third days, compared to the seven hours of its first meeting at Wisconsin. Monday and Tuesday were chosen for formal discussion days, giving Tuesday afternoon to those individuals who needed or wanted time to contact other departments on campus. This allowed for travel time and the handling of business affairs on Sunday.
The second meeting of the Eastern Group was held on Thursday and Friday, November 17 and 18, 1966. This took place at the University of Massachusetts. This meeting was similar to the first Eastern meeting. No outside speakers were present. Discussion was among the managers and university faculty. Topics included "Factory Mutuals vs. F.I.A.," "Competitive Bidding and the Allocation of Cost Among Departments," "Consultant and Insurance Audits," and "Replacement Value vs. Replacement Less Depreciation." Two professors conducted a colloquium on the various aspects and problems of faculty fringe benefits and pension plans. As a result of the first meeting's interest in captive insurers, information was collected for a study on the subject. The balance of Friday morning was spent in taking a guided bus tour of the campus - the first tour in URMIA tradition. It was quite a difference from the boat trip and dinner aboard the Trinidad at Chicago's 1980 Annual Conference!
It was felt that six months was too short a time to digest such meetings, and the consensus was that an annual meeting would be more suitable. By this time, Pyfer had received a copy of the Western Group's October agenda and a draft of their constitution. It is likely that he had presented or at least mentioned this to the Eastern Group.
Noticeable differences between both groups surfaced at their third meetings during Spring 1967. The Western Group had outside speakers for every topic covered, whereas the Eastern Group kept its discussions linked to its managers. The Western Group increased its meeting time to two and a half days from Sunday to Tuesday, while the Eastern Group kept to its two-day meeting time from Thursday to Friday. The Western Group formalized its requirements of membership in a Constitution, while the Eastern Group did not. The original purpose of an enrollment limit and other requirements was to ensure that representatives would have enough position responsibility and knowledge to contribute, as well as learn. The concern of the charter members was that if large and small universities were together, the small would generally be learning rather than contributing. The Eastern Group left expansion of membership up to the host institution with the general agreement that only larger institutions would be invited as they would share the problems of general interest and applications discussed. Both groups discussed the number of times that their groups should meet - semiannually or once a year. Also, each group invited a representative from the other group to attend its meeting. Hustedt attended the Eastern meeting at Rutgers in May 1967.
We now skip over a few meetings to the first joint meeting of Eastern and Western insurance managers held at Pennsylvania State University in May 1969. By this time, both groups had seen the benefits and success of their meetings and had established some sort of constitution, method, or structure for their group. Both were growing in representation at each of their meetings. Insurance managers on the Pacific Coast heard about these fabulous soirees and, never missing a celebrity event, also began coming to these meetings. In fact, Pyfer had contacted M.J. Bowman of Cal Tech and suggested that he "develop an interest in a similar group on the West Coast so we (Eastern, Midwestern, and West Coast) will be national in scope."
The most important aspect of the Penn State meeting was not so much the discussion topics - though, of course, these were significant - but, rather, the matter of joining the two groups into one organization. At this point, the West Coast region, with Bob Beth representing Stanford, was considered part of the Western Group. This subject was considered jointly and then discussed separately. The general feeling was that merging into one organization should be further considered by each group. In other words, it was still too soon for union.
Vietnam War Era: Early 1970s
It was the peak of student unrest. Underwriters would open their newspapers and see one story after another about a campus building somewhere being burned. From the news coverage, it probably seemed that all buildings would be hit. James Gallivan, the president of UIMA, attended the meeting of the Eastern Group at Princeton on May 1, 1970. The Eastern Group felt that universities had not received good press notices from an insurance standpoint. It was their feeling that more could be accomplished by a national UIMA than by individuals or members of several small groups attacking the insurance industry on their own. Fresh from the East, Gallivan attended the Western Group's meeting at Notre Dame the following Monday. He reported that he shared their feeling and recommended that a single national group should be formed.
Alan Weber motioned that UIMA invite the Eastern Group to join in a merger of both groups. Furthermore, he suggested that "a person or persons from each group arrange for another joint meeting to be held in the fall of 1970."
The turbulent times hastened the need for exchange of information and know-how and for speaking to the insurance industry with a single strong voice. The Western Group decided to change its annual meeting to the fall; usually, they were held in the spring. This left open the spring for Eastern regional meetings and left the option to those who were members of the American Society of Insurance Managers (ASIM) to attend its national conference, hopefully in large enough numbers so as to form some sort of loose "industrial group."
The joint meeting was set for October 19 - 20, 1970, at Purdue University. This meeting would accomplish three main objectives:
- to unite all interested groups into one national group;
- to scourge the insurance industry representatives and complain against their increases in rates ~ large mandatory deductibles; and
- to seek some satisfactory compromise between the industry and universities.
The Eastern Group of universities merged with UIMA. There were now 65 representatives from 60 universities and approximately 90 campuses in total.
The setting for the Purdue Conference is best seen in a letter from UIMA President Bob Beth to the presidents of various insurance companies:
. . . In the area of property coverage, universities are now faced with the following: 1) large deductibles of $100,000 or more; 2) substantial increases in rates; 3) limited markets; and 4) restrictions in existing coverage's. We are now concerned that the insurance companies have been misled by the sensationalism in the news media. Will you permit us to present our information, outline possible solutions or alternatives to the existing market problems, and let us know what you can propose to develop viable insurance programs acceptable to all?
Representatives from the Hartford Group, Employers Insurance of Wausau, American States Insurance Company, Royal Globe, Continental Insurance Company, and the Insurance Company of North America participated in a panel discussion. The Insurance Managers felt that the meeting helped to open up communications but they were also left with the impression that the companies were not willing to make any changes at the time unless all violence, arsons, etc. on the campuses stopped or unless considerable political pressure was put on the insurance industry. The companies said they had no statistical data available on such losses at universities and gave the matter a low priority. It was a rather elucidating discussion. John Howard, then of Northern Illinois University, relates the following:
. . . At the conclusion of the conference one of the discussion leaders commented that we should be applauded for our efforts in arranging the meeting. In return we responded that the industry should be applauded for attending our meeting at which time Jim Gallivan got off one of his famous one-liners, "Let the record show we gave each other the clap." Thanks to him, the conference ended on a hilarious note.
The Early Days of a National Group: 1970s-1980s
Also presented at Purdue was the former pooling captive insurer idea, which was first discussed at the Eastern meeting of 1966. This had evolved into a study by Felix Kloman and others, which recommended the formation of a University Property Pool and a Risk Control Board. While some members had reservations that universities could collectively do any better in the purchase of re-insurance than commercial carriers, there was some indication that prospects were favorable. A steering committee was appointed to coordinate UIMA's efforts and determine whether the program was feasible. This idea of university captives ground on through 1977, receiving technical assistance from NACUBO and Johnson & Higgins and finally led to the creation in 1980 of an off-shore association captive insurance company comprised exclusively of universities.
Alas, detailed information on conference proceedings ends here, as there is not enough primary documentation to substantiate those juicy stories, only spotty correspondence and newsletters. Nevertheless, some URMIA history and observations can be constructed.
Now that the Eastern, Western, and West Coast Groups were united into one national group, goals could be set and achieved collectively. Risk management had come into being as a respectable profession at most universities. General growth in universities increased the need for insurance and risk management. The introduction of the Occupational Safety and Health Act of 1970 imposed liability on all institutions. Provisions of the Act had to be carried out by the managers. Increasing attention was given to fire and life safety codes, particularly in dormitories. The mid-1970s brought forth the national medical malpractice crisis. Malpractice discussions were scheduled for URMIA meetings and were naturally mentioned in the newsletter.
Groundwork, in terms of emphasizing risk management rather than only insurance functions, was being constructed in the early 1970s by Bill Ryan of the University of Michigan. A few years later at Baton Rouge in 1976, the Association's name was changed to reflect this new position. The name change was enacted in order to "more accurately reflect greater involvement of University Insurance and Benefit Managers with Risk Management concepts." According to Beth, "URIMA was a strong second choice but some felt the pronunciation sounded as if it were a kidney ailment, thus URMIA won." Along with the change in name came a new logo for the Association - a circle representing the total circumference of risk management with the light and dark sections representing known and unknown risk.
URMIA has many accomplishments and persons to its credit - no one more universally recognized than Dr. John Adams of Georgia State University. In the forward to Risk Management and Insurance - Guidelines for Higher Education, Dave Baldwin (1972 Chairman of the NACUBO Insurance Committee, Temple University) lauds the author a ". . . Special acknowledgement of the prodigious and selfless work performed by Dr. John F. Adams. . ." In addition to this volume, Adams' Annual Liability Survey culminated in the volume, Legal Liabilities in Higher Education: Their: Scope and Management.
Conclusion
URMIA has grown in members and experience. In September 1980, membership increased to 130 institutions. The continual breaking of attendance records reflects not only the importance of the conferences, but it also reveals that the members have both an excellent view of their positions and know how to keep up and improve their knowledge in a profession that is forever changing. The inter-school communication, experience, and problem sharing, which was once primarily organized on a regional basis, has become organized nationally. The disciplines of risk management and employee benefits have been brought together into a cohesive association. And just in time, for the floundering economy and looming federal and state cutbacks to institutions create much concern over expenditures of monies. Colleges will suffer from cutbacks, making group insurance purchases or captives a favorable option. At the Chicago Conference (1980), Walter Smith from Rollins, Burdick, and Hunter suggested that risk managers place more emphasis on the management of risk and on loss control. The risk manager has become an important asset in ensuring a safe and secure university.
In closing, the inclusion of excerpts from two letters of members can best summarize the personal benefits received from this association. In the first newsletter (1968), Bob Marriott of the University of Missouri wrote:
We are a new organization, but I think we are blessed with having institutional representatives with common problems and common solutions. It seems to me that, if each of us is to benefit from our membership, we must not only share our problems and solutions, but we must also share our other data and information that might make our individual tasks easier and more productive. As I see it, our first major goal is for each of us to become more aware of the coverages and procedures that each have and then see if it is possible to share this information and to develop common concepts useful to all of us.
Finally, Bob Mullen, recalling his first meeting at Princeton, wrote:
. . . It turned out to be extremely beneficial for me in terms of the wealth of college assistance and know-how and the assurance that, when one needed help, it was readily available. That essential benefit has grown and expanded considerably since the national development of URMIA and its constantly increasing effort to promote the professional development of risk management and the awareness of its important contribution within the educational community.
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