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Retired Members
The Premium Years
by Arthur J. SchwartzThe AR interviewed LeRoy J. Simon, who hangs his fedora at his home in northern New Jersey. Our interviewee has written 59 papers in various insurance publications, won the Dorweiler Prize, chaired or served on numerous committees, and served as president of the CAS in 1971!
What keeps you busy in retirement?
Retirement is great. One thing I learned at Prudential Re was the value of exercise and weight control to stay in shape. They had an exercise room; anyone could use it on a lunch hour. After I left Prudential, I'd run outdoors. Now I have a treadmill in our home, and I use that for about 25 to 30 minutes, three times a week. I'm not training for the Olympics. After each session, I weigh myself and write it down. If it creeps up, I'll say to myself "C'mon kid!" It works! Another activity I enjoy is the time to read good books. During my career, even after work, I mostly read technical papers. Now I have a chance to read the good books that I should have read. My list is mostly fiction. Also, I fool around with computers. I write programs in BASIC to solve mathematical puzzles.
What do you think of the actuarial career?
The actuarial career is perfect from start to finish. You "earn as you learn." You can move around, if you're flexible, and you can go into management if you're so inclined. Upon retirement, you have a chance to do some part-time consulting. As far as my career is concerned, Hollywood could not have come up with a better scenario.
How did that scenario unfold?
Upon returning from WWII, I majored in math at the University of Minnesota. A life company, Northwestern National, was looking for someone to run a calculator in their actuarial department. It was a summer job. There I learned what an actuary was all about, and I began taking the exams. At the time, I was the only person taking the CAS exams in Minnesota. I joined INA in 1957 where I worked directly for Laurence Longley-Cook, and the technical challenges tested my abilities to the fullest. I wrote a paper in 1958, [Rate Revision Adjustment Factors, Proceedings, p. 196] and based on the favorable reception, I knew I could hold my own with other actuaries. In 1965 I became general manager of NIASA, a predecessor to ISO, which at the time was doing pioneering work in fire insurance. From there I joined Prudential as it was entering the property casualty business. I was instrumental in establishing Pru Re and spent the majority of my 17 years with Pru as Pru Re's chief operating officer. I retired at age 63 and worked part time out of my home as a consultant with Coopers and Lybrand.
What was your most challenging paper to write?
"The 1965 Table M" [1965 Proceedings, page 1]. I was responsible for the design of the project, and the formulas we'd test. At one time, I thought we'd fail. None of the formulas seemed to fit the data well, and I had taken on this aspect of the project as a personal responsibility. I was bitten by the bug and couldn't let it go. Fortunately, after some trial and error, I did discover some meaningful relationships in the data, and it worked. Even more fortunately, in spite of the hundreds of hours I had invested in Table M, my wife did not file for divorce! Other interesting articles I wrote were the "Address to New Members" in 1987 [1987 Proceedings, p. 429] and in 1999 [1999 Proceedings, p. 806]. These two speeches express some of my personal views. When you're employed, you can't always speak your mind. These speeches were fun to write and to deliver to an audience. [Editors note: These articles are articulate, funny, and as timely today as they ever were. Past Proceedings are available on the CAS Web Site.]
Are there any research topics you came across in your career that you might suggest for further exploration?
This first topic actually came from Charlie Hachemeister. His idea was on loss reserve projections. If looked at as a Markov process, one might look at other factors than only the dollar amounts. For example, the status of information, medical results, and whether there is attorney involvement. The second topic is my own. As you take a block of claims, incurred losses by accident month, draw yourself a histogram of estimated values. This will be modified as new information develops. It's going to have some distribution of losses. Instead of predicting the ultimate, try to predict the ultimate distribution of losses. You'd have to analyze individual claims; with today's computers, that's feasible.
Do you have any study tips for students?
I would give them the same advice as I give my grandchildren: Do a little bit on each subject every day. By this I mean that you should not bore in on one subject relentlessly until you knock it off. Instead, a change of subject is a welcome relief and brings all things to completion more nearly at the same time, which is exam day for the actuarial student. This advice also means that you should have a plan and stick to the plan. For example, finish the initial reading and highlighting of material nine weeks before the exam; spend five weeks reviewing all highlighting and past exam questions, and so on. The whole idea is to have a plan, continually review your progress, and keep yourself on schedule. This applies to planning your study for the exams, to planning your business activities, and to planning your life. The concept of consciously switching from one subject to another if you're a student, or from one project to another in your business life or personal life, gives you power. You may actually accomplish more by spreading your time over several priorities!
What are your thoughts on mentoring?
I believe in natural mentoring. If you're in corporate life, you do the right thing for the next person. It happens without thinking about it. If you lead by example, by your ethical and moral conduct, you naturally help others up the ladder. It's usually not overt.
You had some comments for us on international issues.
One specific area the CAS may want to look into is encouraging Hispanic U.S. students. They have pride in their origins. Over a longer time frame, they can be emissaries for the CAS in the many Spanish-speaking countries around the globe.
Do you have any more "pearls of wisdom" for us?
I'd like to give you two more axioms. First, time is one of your most valuable assets, so optimize your use. How many people let time "run," knowingly "killing time?" They let the actions of others, or the world, control the course of their lives. That's leaving things to chance, and not living your life your way. Instead, look for ways to save time and use it. It's your chief asset, so use it wisely. Second, don't procrastinate. Problems often get worse with time. If you're not going to be smarter or more capable tomorrow, or have new information tomorrow, then do it now. If you have to ask your boss or someone, fine, but if it's your decision, make it now, even if it's on the spur of the moment. This habit of making quick decisions helps others too. If they want to know whether you'll give a speech or moderate a panel, once you give them your answer, they're on the way to their next hurdle. Again, if it's your decision to make, make it now!
On that note, I'd like to thank you for sharing your wisdom and your time so generously with us all.
*****
If you're a retired actuary who would like to be interviewed for this column, or if you know a retiree whom you would like The AR to feature, please call Arthur J. Schwartz at (919) 733-3284, x259 or send him an e-mail at aschwart@ncdoi.net.
A Few Anecdotes from Simon's Illustrious Career This is about Laurence Longley-Cook, who wrote a paper on credibility that was on the syllabus for years. He hired me at INA, gave me opportunities that really challenged me. Brilliant guy. To give you an idea how brilliant, consider that prior to being the chief property/casualty actuary at INA, he had been a life actuary in England. He came to Philadelphia, and decided to take the CAS exams, to become familiar with the work. He had to deal with the differences between life and casualty actuarial methods, differences in policy forms from the English life policies to American property and casualty policies, and differences in accounting between the U.S. and the U.K. There were eight exams then, four to be an Associate, four to be a Fellow. He passed all eight in TWO sittings!
Now, to appreciate this story, you have to know that he did not observe most social amenities. If you were in his office and the phone rang, he'd pick up, putting you on "hold." He was also business-like in the extreme; no small talk. When a conversation was over he'd just walk away, or if the conversation was on the telephone, he'd simply hang up the phone.
One day while I was discussing something in his office, the phone rang. He picks up, listens for five seconds, then says, "Multiply by three and divide by two." Slams the phone down.
We finished our discussion. On my way out, I asked, "By the way, what was that call about?" "Oh," he said, "inland marine. They wanted to know how to calculate the agent's commission. It's 15 percent of the premium."
I said, "If they multiply by three, and divide by two, aren't they going to be off by a factor of ten?"
He said, "Oh, that's a minor detail."