This article was written by Cori Burcham.
From understanding the cause of rising insurance costs to planning for retirement, educators are strengthening their own financial literacy, knowledge that extends far beyond the classroom. That goal is at the center of the Foundations of Financial Literacy series hosted by the University of Delaware’s Center for Economic Education and Entrepreneurship (CEEE) in the Alfred Lerner College of Business and Economics. The virtual, hourlong sessions provide Delaware K-12 educators with fundamental financial literacy skills to help guide students into adulthood.
“The Foundations of Financial Literacy workshops give educators direct access to insights from finance industry professionals,” said Laura Ahlstrom, CEEE program coordinator and moderator for both sessions held in November and January.
“These sessions empower teachers to bring real-world perspectives into their classrooms and equip students with the knowledge to make informed financial decisions.”
The first session, led by David Lyons, senior vice president at NFP, centered on commercial business insurance and its broader impact on the insurance market. Drawing on his experience as a risk manager, Lyons detailed the current challenges affecting the liability insurance market, such as social inflation, or the overall rise in the cost of claims.
Automobile and umbrella coverages have been among the most affected lines of insurance, posing issues for companies operating large fleets of vehicles. Lyons suggested the main driver of social inflation is a cultural shift in which jury attitude has become less sympathetic towards large corporations in liability cases, often leading to “nuclear verdicts” with sizable jury awards.
“Nuclear verdict is when a jury awards a plaintiff $10 million or more. Five years ago, a nuclear verdict was $1 million. That’s an insane amount of growth in the wrong direction,” said Lyons.
Another factor driving up costs is litigation funding, in whicha third-party investor funds a lawsuit for a share of the damages. The practice began as a “good Samaritan” effort to help plaintiffs afford legal representation, but has evolved into a business venture, notes Lyons, encouraging lawsuits to become prolonged and aggressive, raising costs for personal auto policyholders, including higher premiums for safe drivers.
“It’s been 14 consecutive years since the insurance industry has made a profit writing automobile insurance, so if your insurance keeps going up and you’re a good driver, that’s normal, unfortunately,” said Lyons.
Lyons also discussed how climate-related events are reshaping commercial property insurance — and, by extension, homeowners’ insurance. While insurers have absorbed losses from catastrophic wildfires, hurricanes and winter storms, compounded losses from events in both coastal and inland regions have led to higher premiums, tighter underwriting standards and reduced capacity across the industry.
The series then shifted from managing financial risk to building long-term wealth. The second session, led by Richard Jakotowicz, associate instructor of finance at UD, offered charts and other resources for educators to add to their money management lessons.
Jakotowicz encouraged saving early and demonstrated the value of compounded growth, especially for young adults entering the workforce. He presented a chart depicting students saving $10,000 annually over 40 years. The most substantial growth occurred during years 35 through 40, highlighting the value of time. With an interest rate of 8 percent, the investment yielded nearly $3 million, which would have been half that had savings begun at age 40. Jakotowicz also demonstrated the calculations in Microsoft Excel for educators to use as an activity.
Diversification was another key theme. Jakotowicz cautioned against putting “all your eggs in one basket,” such as investing solely in U.S. stocks.
Instead of actively trying to predict the market, Jakotowicz suggested splitting money into different asset types, such as international and domestic stocks and bonds — a process known as asset allocation. He compared the payoff of this investment strategy to being a “C” average student, never experiencing the highest rewards or most detrimental losses. As an example for the classroom, Jakotowicz shared portfolios from firms like Vanguard and State Street that investors can emulate.
In addition to cultivating financially confident students, the workshop series — sponsored by Robinhood, via the Delaware Council on Economic Education, and YourMoney101 — also empowered educators to become more proactive with their own financial decisions. Inspired to attend the workshop to gain teaching resources, Gail Morris, a computer science teacher at Gauger-Cobbs Middle School, left the insurance session with a new perspective on her coverage.
“It made me want to research my insurance policies a bit more before I choose [one] just to get it done. I need to know what I’m getting before I sign the insurance papers and realize down the line that I’m not covered,” said Morris.
Delaware educators can continue exploring new avenues of financial education with the final workshop on cryptocurrency and takes place March 10 at 7 p.m. For more information, visit the CEEE’s events calendar.