Inside The Turnaround Season 1: "I Was In The Room Where It Happened "---Blog 8"The Beginning Of The End , and the End of My California Story"

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Well, I don't know how effectively it came across in the last blog, but in the end, rescuing this company was just not possible. There were too many latent liabilities that, as latent, but clearly needed, had never been recorded. In other words, there were a lot of unpaid claims costs that would eventually have to be paid but were not accounted for by the company. Especially in the reinsurance arena. In more normal circumstances the company could possibly raise the money or have the money to pay. ?But given the company’s financial condition, neither was feasible. So, so in the end, pretty much no matter what we did, we were not going to succeed. We didn't know it along the way. but we found out near the end. This was exacerbated by the fact that during the previous ownership, the previous senior management of the company had told my actual boss, his predecessor, and pretty much every actuary involved that they were not allowed to look at the reserves in the reinsurance companies. So, what we were doing was just not going to work. Period.

Now let me mention though that a couple of things were going to happen as the company progressed to insolvency. The first is that because of all the reinsurance, they needed a chief actuary for a long, long time, I don't know how many years. My actual boss was still there for maybe as much as nine years along with a certain number of the remaining actuarial staff. And, that gentleman, I'm sure served them well.

The second thing, was something I talked a little bit about this last time, but I was increasingly unhappy with Southern California. You know, the costs were high. My friends were spread out all over the place, so it was hard to kind of get together and just hang out for an evening. So, I was kind of ready to leave and started looking around.

Remember the CEO who was so impressive? He, he left at one point. The holding company that he worked for and that had been paying him was supposed to buy the company. What I was told is that the money never changed hands, which of course I'm glad for. That's totally appropriate. The sellers were the were the ones that got the company in trouble. So that was kind of the end in all but name. For much of the remaining staff the end would come soon. While everyone knew it would be an end, for the still-necessary personnel, it went on for a long number of years before it finally, finally closed out.

But the question then is, well. I was there for about two years. And I worked for the company and I did take a risk working for them.? So, what did I get out of it? Well, some parts are maybe a little personal. But let me talk about some of the things.

• ???? 1st. I became an associate of the CAS while I was there, I passed my associateship exam and began on my journey to the fellowship .
• ???????? 2nd. What turned out to be one of the most popular, if you want to call it that, actuarial articles that I ever wrote “Interpolation Along the Curve” was hatched there.
• ??? I understood commercial lines, how they worked, and a lot that wasn’t in the textbooks.
• ?? One of my co-workers at my previous job told me “You’ll never meet anyone in the film industry. Understand that one of my ex-girlfriends would eventually win multiple Grammys.? Also that in my mind the most important person I ever met was the one who pretty much invented the mathematical theory of “conditioning”.?

o?? But people in LA love their “stars”.? So, I met

§? A “B-lister” (I’m guessing at these, by the way, but they may give you perspective) tending bar.? Unfortunately, I was the only person in the place, but I was there to meet people, so I headed out fairly quickly.

§? Not a bragging item for multiple reasons, but I had an argument (no blows were exchanged and no one was hurt) as I was legally smoking a few tables way from a gentleman in the Marina del Rey Cheesecake Factory.? Actually, this gentleman is exactly the same on screen and off. Every time I see him on the screen, he plays a “difficult” character, sometimes even a “difficult” judge. This always comes to mind because it was my last lunch in LA.

§? One of my neighbors was maybe an E-List starlet.

• ???? And I also met three very distinguished actuaries that were involved with the company.? As I was about to leave, I interviewed with the firm they worked for-that helped us. Since I have nothing but positive to say about these three, I will list the names. That is. Lee Van Slyke, Dick Fallquist, and Rick Sherman. All these gentlemen, played a major role in our profession, at least in my opinion. Rather than list what each individual did, I’ll just mentioned that they, or maybe some subset of “they” invented Exhibitmaker-now around for forty years, having passed through at least three owners. More than one of these gentlemen? has been helpful to me in my career, but let me mention Rick Sherman.? Among other things we developed a reserving method ?, the Sherman-Boor method, together, working thirty years apart and in different cities. This is also the Rick Sherman of “Berquist-Sherman” and author of on a paper on curve fitting for estimating tail factors. Rick has passed. But. He and Lee over the years were more senior actuaries that weren't really mentors but were people that I would talk with and maybe get advice with from.
• ???? Lest we forget, I left L.A. with a Porsche-remember I was single then.

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My next step was to return to the Midwest where cost levels were more friendly and it was easier to meet people and, and you know, get together to do things. Again, at that time, I was still single. So that was important to me. A different type of challenge, that also involved a turnaround, was there for the next "Season".