INTRODUCTION AND BACKGROUND
The Chartered Property and Casualty Underwriters (CPCU) society is a non-profit organization and primarily consists of CPCU designees. The CPCU examinations and designation is the most recognized certification system in the area of property and casualty insurance. This Society is a community of property and casualty insurance professionals who promote excellence through continuing education and knowledge. The Society's more than 25,000 members from every region in the United States, and also other parts of world, such as, Europe, Japan, Korea, and Bermuda hold the Chartered Property Casualty Underwriter (CPCU) designation. This designation requires taking and passing rigorous college level courses, meeting experience requirements, and also agreeing to be bound by a strict code of professional conduct.
In general, the CPCU designation is attained by completing eight college-level equivalent courses. Once a professional has earned the CPCU designation, they are automatically enrolled in the CPCU Society for a brief introductory period. Following that, usually within six months, new designees are then invoiced membership dues. The primary function of the Society is to facilitate networking among industry professionals and provide continuing education venue. The CPCU Society offers tremendous opportunities to its members that help them to excel in their career. The Society also promotes the value of the CPCU designation to the insurance industry and to the community. A few of the benefits of being CPCU society member:
Continuing educational opportunities through seminars, workshops, and symposia help to improve member's skills and knowledge.
Professional development programs such as, leadership training, public speaking and other courses to help enrich career objectives.
Global Networking helps to interact on a global level by joining one of 148 chapters in the United States, Bermuda, Europe, Japan, and Korea.
The CPCU Society's job network to post resume and review job openings. This is also a critical resource for insurance industry employers.
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In recent years, the CPCU Society membership numbers has been in a declining phase (see, Graph 1). Therefore, the objective of this study is to understand the cause of this decline of membership and to understand the possible factors affecting this attrition. The decline of the society membership may be the result of both internal and external factors. It may also be a direct consequence of declining CPCU designees. In general, trade associations, membership societies, and other similar not-for-profit groups are no different than any for-profit organizations during economic downturn. In tough economic condition, all these organizations are trying to implement necessary steps to sustain and maintain their current business level. However, for both the members and the organizations there are some cost associated with the process. Those members who are committed to these organizations usually find the capital needed to spend for the membership dues. However, when economic conditions get tough, membership dues payments may become difficult because of financial constraints of members and their employers. Therefore, we expect an opposite relationship between membership fees and society members' count even after adjusted for inflation.
H1: There is a negative relationship between membership fee (inflation adjusted) and society members' count.
At the external level, we would like to explore what aspects of economic buoyancy were most important in influencing the trend of membership's growth or decline. Here we study factors responsible for the decline such as growing interest in other insurance areas. There may be salary differences between job categories within the insurance industry, which may provide insights into the causality of higher attrition rate. Increased opportunities in these other fields collectively, could reduce the likelihood of people taking CPCU exams and ultimately affect the attrition rate. Understanding these relationships and their directional effect can prove valuable for strategic management of the organization in increasing memberships. We will explore the impact and significance of CPCU exam takers on the society membership count. This will provide us some hierarchical relations between external factors and the membership trend itself. This study explores ideas and identifies factors that are associated with the CPCU society membership trend. Understanding these factors is helpful in the managerial decision making process for long-term strategic planning.
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Factors internal to the CPCU Society, such as, the privileges of being a part of the Society might not be viewed as valuable enough for members (or their employers) to continue paying for their memberships in the Society, or possibly similar privileges are provided by other associations. A company environment and its policy that supports and encourages society membership will influence the decision to become or remain a member. Other factors such as salary level, tenure level with the company they work, job category, age, and gender may also...