Insurance CEO: ‘You have to be open, honest and accessible’

Actuaries have the best job in America.

So says CareerCast, which ranked 200 occupations based on income potential, job prospects, work environment and stress. Aside from this latest study, actuaries, who predict financial risk for insurance companies, consistently place very high in such surveys.

What about the stereotype — a boring job full of anti-social number-crunchers?

Mike DeKoning, an actuary for his entire career, insists he's a people person. Born and raised in Canada, DeKoning said he has drawn on a well-rounded background — highlighted by ice hockey and singing — to ascend the actuarial ranks.

DeKoning, 48, has been CEO of Munich American Reassurance Company for five years. The Atlanta-based firm, with about $2 billion in premium revenue last year, is actually a “reinsurance” company. It provides insurance to insurers that want to spread the risk from the policies they sell. The company is a subsidiary of global insurance giant, Germany-based Munich Re. DeKoning discusses his often misunderstood profession, as well as what he’s learned from leading his company through some tough cultural change.

Q: Who influenced you early in life?

A: I was born and raised in Toronto. My parents came to Canada from Holland in the late 1950s with 50 bucks in their pocket. They were both around 27 at the time.

My parents grew up in Rotterdam during World War II. It was the most bombed city. The Germans bombed the heck out of it when they wanted to take control, because it was a major port in Europe. And the Allies bombed the heck out of it to try to get the Germans out.

The war shaped my parents’ mindset. They were very frugal. My father was an insurance broker. I was good at math in school, and actuaries are sort of applied mathematicians. My father suggested it as a career. It’s supposed to be low stress and high pay. I’d like to see some of that.

Q: What have you seen? Who should consider it as a profession, given its consistent ranking as a desirable career?

A: I actually wanted to be a veterinarian. But going to college and veterinary school would take seven years from the time I finished high school. There was no way I wanted to wait that long to start a career.

So I decided to become an actuary. In addition to being good at math, you have to be extraordinarily disciplined. When you finish college, it’s not like your education finishes. While working, you have to study for (a series of about 10) professional exams over several years. Typically, you take these exams twice a year and study 300 to 400 hours per exam. Nearly every week is spent doing 20 hours of studying after a 40-hour workweek.

While your friends are going out on Friday night to have a good time, you’re probably at home studying. You won’t survive the exams without being very, very disciplined. That discipline feeds into some of the stereotypes that actuaries are not very social.

I always try to keep a balance. Even while in high school, I worked a part-time job, I ran an ice hockey association with 200 kids and coached a hockey team. You have to balance your school life or work life with your personal life.

I had to have discipline to get involved in all the things I wanted to do. That discipline threads through my entire life.

Q: That discipline helped you become CEO of Munich American in 2008. You were brought in to change the direction of the company. How did you go about doing that?

A: Our business has become more complex from a regulatory and underwriting perspective. It's a very technical business. We take on liability risk. That's all we really do.

Our business is a very long-term business. If someone pays me for a life insurance policy today, I do not know if I’m going to make money on it for 30 or 40 years. This is not a widget business. I’m earning my profit — if there is one — over the life of a life insurance policy.

We believe that in order to be successful in our business we have to be the technical experts. If our clients have a question, we want to be No. 1 on their speed dial. We brought in staff to think about things differently. We had some turnover. It was a challenging time, a period of instability.

You have to be open, honest and accessible when you’re going through this process. I had “coffee and conversation” meetings with people throughout the organization. At least once a month, I’d sit with 10 people and say, “Go ahead and ask any questions you have.” I continue to do these.

The other thing I implemented is town hall meetings of all staff every quarter. We have anonymous question boxes for people. Every question I get I read aloud and I respond to. It’s part of creating the openness around culture change. It helps people feel part of the process.

Q: What mistake did you make?

A: The one thing I would have liked to have done differently — we didn't communicate the master plan as effectively as we should have.

We had a plan. We did it in an order. But we did not articulate the full plan as totally and openly to the organization. Instead, we articulated it one piece at a time.

One of the reasons we held off was because we didn’t know the details of the whole plan. If we would have communicated the grand vision from the start, without the details of how it would directly affect everyone, it could have created more uncertainty.

But if I had to do it again, I would have found a way to communicate the grand vision upfront. I would have taken a little more time at the beginning to fully vet the whole grand vision — and then I would have communicated it more.

Q: What’s your best advice for younger people?

A: You learn some of your life skills while growing up. I sang. I went to a choir school from grade six through high school. We went on concert tours all over North America and Europe. When you stand up in front of 2,000 people in a concert hall in downtown Toronto and you're doing a solo, it's easy to stand up in front of an employee meeting or a conference of 100 people.

I get comments now that I look so comfortable speaking. I can think on my feet. It goes back to the choir. If you’re singing and you flub something, you’ve got to recover quickly or you look foolish.

Also, when I started working as an actuary (in training) after college in 1988, I had seven job offers. The company that I liked the most gave me the second lowest (salary) offer. But I decided that company felt right to me. There was a rotation program, so you could learn different aspects of the business over time.

On my second day, they announced that their salary schedule was out of whack and they gave all the actuarial students a raise. I said to myself, “This is great. I wonder what’s going to happen on my third day.”

This taught me that the environment you work in, the people you work with, are so much more important than the compensation. Frankly, I think if you’re talented and you’re working for a good organization, the money works out over time. I was there for 20 years.