Formerly part of the Hunt Companies, Alden Torch Financial focuses on its work as a tax credit syndicator for affordable properties and managing assets for the properties in its portfolio. CLM Fellow Lori Seidenberg gives us insights and advice on managing a program with $1.2 billion (and climbing) in replacement cost value.
Q. What was your early career like?
A. In the summer before I started college in 1989, my mother was working for Allstate in its claims department in California. At the time, Allstate was trying to create the very first call center, where instead of a policyholder calling her agent, she would call a toll-free number to report the claim, which would then get transferred to a local office for handling. As part of this pilot program, my primary role was to take first notice of loss over the telephone, input it into the computer, and transfer it to the appropriate office. So that is really how I started. Like many people in our space, I fell into it and never looked back. Insurance has been very good to me so far.
Q. When did you make the move to risk management?
A. My first official title of risk management came 10 years ago when I worked for Fannie Mae, but when I look at my career, I really think that, as early as 1998 when I started working for a startup company that developed the first end-to-end coding engine for quoting and binding insurance coverage on the Internet, I was doing work in risk management, though there was no title for it back then. I was a supervisor at the time, and I started running the call center on the customer service side while also running business operations, so risk management techniques definitely came into play.
Q. You’ve been part of some really big technological changes in the insurance industry. How has that influenced your perspective?
A. It really has been exciting. When I first started in 1989, flood could be covered under some homeowners’ insurance. Commercial policies were called “comprehensive general liability,” and the form was only five pages long. I remember in the early ’90s I worked for an entertainment insurance firm agency in Los Angeles, and we were one of the first companies to write an employment practices liability policy through Lloyds’ of London. I kind of laughed at it at the time, asking myself “Who is going to buy coverage for sexual harassment?” Now, of course, everyone buys it. So it has been interesting to see how the industry is evolving and moving into technology and cyber, as well.
Q. Where do you think the insurance industry is heading?
A. As much as we might want to move to a completely automated and technological environment, I see a move towards more customer service. For every person who never wants to talk to somebody, there is another who actually wants to talk to a human being, and I think the industry recognizes that. Additionally, I see technological advances being replaced with strategies for protecting customers’ data. I think that the challenge for insurance companies is going to be protecting all those technological advances and information from a cyberattack.
Q. With a program as large as yours, finding coverage must be a challenge.
A. I will probably hit $2 billion by renewal, so every year my constant challenge is to find markets out there that are willing to give me the best price and the best of value for insurance for these properties. Modeling helps, but it’s just a theoretical example, not an exact science. I joke that everyone makes such a big deal about catastrophe and windstorm modeling, but my largest claim happened to be a chicken grease fire in which the tenant left fried chicken on the stove. When she woke up and realized that it was on fire, she threw it out on the balcony, shut the door, and went to sleep. Ultimately, it resulted in a 35-unit apartment building burning to the ground. So until you can model common stupidity, there is a limit to a model’s usefulness.
Q. Give us a glimpse into your daily work life.
A. The best thing about my day is that I cannot really say what I do every single day because it is just so spontaneous and unpredictable. Sometimes I am analyzing the risk exposure to a specific property, sometimes I am looking at entity corporate exposure, and sometimes I am just interacting with legal and getting through some management agreements or legal situations. Every day, I come in and ask myself, “What is going to happen today?” And then before I know it, I’m going home thinking, “I had a good day.”