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A Discussion with Donald Solow, President of Vista Life & Casualty Reinsurance Company

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Donald Solow

Donald Solow is President of Vista Life & Casualty Reinsurance Company, a Vermont-domiciled sponsored captive insurer focused on the securitization of insurance risks, including closed or run-off blocks of business, with particular emphasis on seasoned portfolios of disability claims, annuities, certain classes of life insurance, workers’ compensation business and long term care insurance.

Prior to this, Don was a Director at Wells Fargo Securities (formerly Wachovia Securities) from 2006 to 2011. At Wells, he was responsible for heading the insurance solutions team, with a focus on redundant reserve financing and life settlements, originating over $500 million of transactions in insurance-related business.

Before joining Wachovia, he held senior positions within the reinsurance industry, including serving as Senior Vice President of ACE Financial Solutions in New York. In this capacity, Mr. Solow managed the life, health, and annuity reinsurance division, and was responsible for sourcing, structuring, and pricing financial and hybrid reinsurance and risk financing transactions.

He became a Member of the American Academy of Actuaries in 1992, and a Fellow of the Society of Actuaries in 1993.

Mr. Solow earned a Bachelor of Science degree in Mathematics from New York University’s School of Engineering in 1988. He now works and resides in Madison, New Jersey.

 

How did you get started in your industry?

I was a math major in college, and a number of my family members were working in the insurance industry.  They had heard about actuaries and advised me to look into the profession.  So, I decided to sit for the first actuarial exam (there were ten at the time), which covered calculus and passed it.  That allowed me to get a summer job in 1986 at a large NYC insurer.  It was a bit unusual because I had only completed my sophomore year, but having this summer job in ’86 allowed me to get a similar job in ’87, with another large NYC insurer.  This company invited me back full time when I graduated in 1988.  So that’s how it all started.

 

What do you do in your spare time? What problem are you currently grappling with?

In my spare time, I like to go for a long run.  It’s an opportunity to focus the mind on the issues at hand, without distractions of texts, emails, phone calls, and so on.  It’s an opportunity to shift the problem around, see it from all sides.  By the end of the run, I’ve often decided on a way forward, or at least I’ve figured out the next steps, which might be to get more data.  In terms of current problems, recently we’ve been working on a highly technical transaction.  We found that the tax accounting produced problems (as tax often does).  So, we’ve had to figure out some ways to reorganize the transaction to make it work for all parties.  We’re not quite done dealing with this issue, but we’ve made good headway.  The key is to keep thinking about and to use the human resources you have, including those with deep knowledge of the subject matter.

 

What is the toughest decision you’ve had to make in the last few months?

In the age of Covid-19, it’s tough to figure out how to reconfigure your business.  Is now the time to introduce a new product?  If so, how do we reach our customers and potential customers, to tell them about it.  Face to face is best, but probably not possible.    Maybe it can be done with a videoconference or a simple telephone call.  These are tough decisions to make.  You don’t want to botch the roll-out of a new product because of Covid-19 lockdowns.  On the other hand, you may not want to delay the new product.  These decisions will be tough for all businesses, and our business was no exception.

 

What is your most satisfying moment?

Generally, in work, the most satisfying moment is when the client says “yes.”  This means you have created something that meets their needs, perhaps after many months, or even years, of discussions.  “Yes” means they are willing to commit the resources, both human and financial, to bring the deal to life.  And it means they have determined that the value to them exceeds what they have to pay to get it done.

 

What business books, articles, journals, people have inspired you?

One of the best business books is Fooled by Randomness by Nassim Taleb.  It teaches you that it’s hard to distinguish skill from luck.  For example, out of thousands of mutual funds, a few will have stellar results for years in a row.  Does this mean they have a winning formula?  Taleb might argue that the probability of outperformance over a long period is very low, but if you take that low probability and multiply it by thousands of funds, a few show good long-term results just through dumb luck.  Taleb also has great insights into risk management, in some sense echoing the idea that you don’t know what you don’t know.

 

What did you learn from your biggest failure?

Don’t underestimate how hard it is to find customers.  Everyone is busy, but perhaps you’ve come along with a better value proposition or more innovative product.  Potential customers don’t drop what they’re doing and buy your product or service right away.  And most of them won’t want to be first in line; they want to know that you’ve made sales to others, as a form of validation.  It’s too easy to say, “well, the market is this big, and if I just sell to 0.1% of the market, I’ll generate a great sales figure.”  That line of reasoning assumes you can reach the whole market!  But how are you doing that?  It’s a problem that needs to be reckoned with early on in your business development.

 

What are some red flags to watch out for in daily life?

Don’t let the tyranny of the urgent cause you to forget about strategic planning.  There are always things that need to get done right at this moment.  But try to set aside a few hours a day to think strategically about your business.  Who are your customers, and who should they be?  Where should your business be in five years?  What resources do you need to get there?  You’re doing things right, but are you doing the right things?  If you spend all day fighting fires, you never have an opportunity to think about the long run.

Also, recognize that there will be days when you’re just not motivated.  Maybe the project you’re working on has reached a less-interesting phase.  I’ve found that putting it aside for a few hours, and working on something developmental, such as a new business idea, can restore energy.  The developmental idea might be one I had been thinking about for some time, but not worked on.  Spending a few hours on it, followed by a short break, often is enough to get me back to the less interesting project.

Stay motivated by making a call to a client or prospect.  Find out what they’re up to, what their current concerns are.  That can get you back on track.  After all, you’re in business to take care of your customers.

 

What advice can you share with others?

I was recently asked to give some advice to a new college graduate.  I told them, when starting a first job, be humble and understand that, although you may have a lot of book knowledge, you probably have little experience in the business.  Therefore, make every effort to understand why the business operates the way it does before you make comments.  Don’t tear down a fence until you understand why it’s been put up.  Remember also that while your parents may think you’re special, no one at the office does.  Try to benefit from the wisdom of the older workers; they may not be experts in the latest technology, but, as a certain commercial says, “they’ve seen a thing or two.”  What you think is a great idea may have been tried years ago, with bad results.

And I would tell them to ignore certain advice, too, especially the idea that they need to do something they love, that has to be a “passion.”  If that happens, great, but for most people, they should be looking for something that they can do really well, and that they like.  It doesn’t have to be an all-consuming passion.  You may master something to the point that you’re bored with it; maybe that means you’ve become such an expert; you can sell your services as a consultant.  So, I’d ignore anyone telling you that you have to love what I do.  Just do it really well.

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