“Let me hear it, DISSS-RUPPTTT!”

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When I first read Jill Lepore’s New Yorker article last year, I was like … why does this woman dislike Clay Christensen so much?

Quote: If you saw the episode of the HBO sitcom “Silicon Valley” in which the characters attend a conference called TechCrunch Disrupt 2014 (which is a real thing), and a guy from the stage, a Paul Rudd look-alike, shouts, “Let me hear it, DISSS-RUPPTTT!,” you have heard the voice of Clay Christensen, echoing across the valley.

However, in the last twelve months, I’ve heard this word used in so many nonsensical ways that I’m beginning to relate to her negative response to it.

By definition, a disruptive innovation is one where the product is currently not good enough to satisfy the needs of most potential customers. However, as related technologies improve, the product becomes good enough for many potential customers. An idea that utilizes the cell phone to enhance client acquisition is NOT disruptive. 90% of Americans have cell phones. An idea that utilizes virtual reality to enhance client acquisition might be disruptive.

This is not to say that utilizing the cell phone to enhance client acquisition is a bad thing. In fact, it is an important thing. But it is an example of incremental innovation.

What makes The Innovator’s Dilemma such an interesting book is the fact that there is no solution to this dilemma. Most of the time, incremental innovation adds more value than disruptive innovation. It makes sense for companies to allocate more resources to incremental innovation. If you are Google or Facebook, maybe you have inside information to inform your guesses as to the next disruptive innovation so your shareholder trusts you to make venture investments on their behalf.* For everybody else, I think incremental innovation is a worthy calling.

*However, given today’s valuations, it’s not clear that anybody is actually able to buy an option that is undervalued by the market.


love ninja (count=792)

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Love Ninja
We already know Wee Ninja are more about love than hate, but Love Ninja takes it a step further, having the power to spread love without you even knowing it.

“Love is the answer…”

In 2007, I was ‘forced’ to read 7 habits. I survived the first 24 years of my life without self help books. Why should I start now? But everybody else in the book club wanted to read it. So I whined about it, sighed over it, finally read it and loved it, especially the section on the personal mission statement.

To Love Myself: Sleep, eat, exercise & read.
To Love Family & Friends: Let people know that I think of them.
To Serve Clients: Accept that we do not know everything and do my best in dealing with the unknown.
To Serve Community: Seek influence, not recognition.

Part of the reason why I wrote “do my best in dealing with the unknown” is that, on some M&A projects, I wasn’t digging as deeply as I would like. Sam’s advice was that, if something important was wrong, I can trust him and other team members to pick it up. Since I’m doing this kind of work again, I’m guessing this wasn’t a big issue for me to begin with.

In 2007, I got some coaching from Lillian and realized that I needed to work on my listening skills. At OW, I realized that it makes sense to put as much effort into communicating my work as actually doing it. Hearing things like “we need to work hard to increase the reusability of slides” still makes me roll my eyes but I agree that fitting interesting ideas into a predictable structure is key to getting people to open up. In 2010, I updated my mission statement to include “listen, structure & communicate”.

to love myself: sleep, eat, exercise & read
to love family & friends: let people know that I think of them
to serve clients: ask, listen, structure & communicate
to serve community: seek influence, not recognition

Looking at this today, I think what I most urgently need to improve is “let people know that I think of them”. Maybe love ninja can give me a hand!

help me grow

Three weeks ago, I started working on a metric to measure career success in my 30’s: “I think it means building a diverse network which increases the likelihood that I can find a person B for every person A. If I’m successful at improving my CheiRank, people will come to me with important problems even if they know that I cannot solve this particular problem because chances are I know someone who can.”

The obvious next step is to update my networking spreadsheet. Which I have not updated since 2010. Which contains some names that I do not even remember. Meh.

As I update the spreadsheet, mostly by going through my LinkedIn contact list, I remember that so many people have helped me with so many things along the way.

And how many thank you cards have I sent this year? Six. Meh.

My short term goal is to send thirty thank you cards between now and American Thanksgiving.


William and I had lunch last week. It has been six years since we caught up. Meh.

I could argue that, until last year, he lived in New York. But I visit New York at least once a year so it’s a pretty bad reason.

My medium term goal (to be achieved by August 9, 2015) is to come up with a process so that I catch up with people more often than once every six years.

to coop or not to coop

Here is a picture I took for the yearbook. However, the most frightening experience at Waterloo was not exams, but Needles Hall (also know as Needless Hell). I’m reminded of this fact this week as I did some mock interviews with current students. Whereas most people pass most exams, most people do not get most jobs they apply to. Hence, coop contributes to Buoyancy, the B in Daniel Pink’s ABC. (I haven’t read the book. Personally, I prefer resilience to buoyancy but ABC sounds so much better than ARC.)

    Here’s what Pink recommends

  • Attunement refers to listening to and understanding the other person—seeing through another person’s eyes
  • Buoyancy refers to being optimistic and resilient, especially given how many times people will say no
  • Clarity is especially important because of the increasing amount of information that may overwhelm people

How does attunement apply to the coop interview process? It used to be that, unless you were lucky enough to know someone in the industry, you have no idea what your interviewer did. Now you can look up everyone on linkedin. So look them up and figure out how similar your previous coop experience is to their career experience. Then use that knowledge to refine your pitch.

How does clarity apply to the coop interview process? Figure out how to explain each of your past coop terms in one or two summary sentences followed by one or two examples. The whole pitch should take 30 seconds. Rehearse the story until you can tell it without thinking but don’t memorize it word for word.

If I were interviewed by a life actuary, I would probably go with this.

I lead pricing and due diligence activities as part of RGA’s Global Acquisition team. Our objective is to deploy capital in inforce opportunities that are consistent with RGA’s risk philosophies. For example, some life insurance businesses are realigning strategy and capital. By transferring existing liabilities to RGA, these companies can invest more in Asia or in asset management. Other examples would include companies that are looking for risk or capital relief. RGA provides this solution in the form of stock acquisition as well as reinsurance.

If I were interviewed by someone whose job is less similar to mine, I would probably go with this. But if I know more about that person, I would try my best to customize and improvise.

I am part of RGA’s Global Acquisition team. We find opportunities that are consistent with RGA’s risk philosophies by working with life insurance businesses that are realigning strategy and capital. For example, some life insurance companies are focusing on asset management. To invest more capital into asset management business, they would like to free up some capital from life insurance business by transferring existing policy liabilities to RGA. Another example would be companies that want to free up capital in North America or Europe to invest more in Asia.

The most important thing I learnt in coop is that, one way or another, I will get through it. I remember this one interview where the HR person from E&Y kept asking me to name someone I worked with that I disliked. I told her that I disliked the fact that one of my coop managers micromanaged me but I did not dislike that manager. The HR person insisted that I must have disliked at least one person from the three coop terms that I’ve done so far. If someone were to do this to me now, I would probably say: “If I really had to work with someone that I regard with antipathy, I would probably have to kill them. Since I haven’t killed anyone yet, I don’t think I regard anyone with antipathy. Ha ha ha.”

A small minority are confident to go it alone

Perhaps more significantly for the longer term, the data shows that a small minority of customers, 11% on average, no longer consider personal interaction important. People in this category have become more familiar with insurance products and have a good understanding of their needs and how their needs change over time. They are increasingly confident about taking greater control over the buying process. These customers, who prefer not to have any personal interaction, want complete control over the buying process and don’t want to be subjected to sales pressure.

Top reasons why Americas customers don’t want personal interaction
55% I want to avoid pushy salespeople
31% I think I can get a better deal myself by shopping around online

Many customers (24%) change providers because their needs have changed, indicating that insurers are missing a key opportunity to anticipate and address these changing needs through proactive communications and flexible offerings.

EY Global Consumer Insurance Survey 2012 – The Americas

2020: a life insurance odyssey

Grabbed dinner with Stephen on Friday to talk about my thoughts on the life insurance industry and get his thoughts on things to learn to stay relevant.

I think there will be two primary models.

1. Self Directed x Commodity Product
> Better version of today’s aggregation services
> Illustration system to show how simple products can meet insurance needs
> Potential buyer given the option to share more information to get a discount (e.g. share health records stored on a cloud to get underwriting discount)
> Insurers compete on pricing (e.g. identify potential buyers with lower lapse risk and offer lower premium)
> Insurers that are currently investing in bancassurance models are likely to pursue this (i.e. whatever algorithm they use to identify good risks in the bancassurance channel can be applied to the digital channel)

2. Assisted Advice x Customized Product
> Customized product makes sense because different people have somewhat different combinations of needs and combo products can provide better value (e.g. buying Manulife Synergy can result in 30% savings relative to separate term, disability and critical illness products)
> More importantly, different people have different preferences (e.g. some people would not buy insurance without return of premium rider because they want to get something back even if the insurable event does not occur)
> A good adviser does not show the client twenty different combinations and cause confusion; they can quickly figure out what the client is likely to be interested in; a good assisted advice digital channel should be able to do the same thing for the middle income market (the affluent market will probably always want multi channel service)
> It’s not clear to me who will pursue this (e.g. insurers playing in the affluent market can do product customization but may not understand the needs of the middle income market)
> This is what I’m really interested in

Stephen took the machine learning course on Coursera and really enjoyed it, so I signed up for the 10 week session starting on April 22. Looking forward to doing a bit of programming again!

LOMA Conference 1984

iii: Recognizing the growing importance of such life insurance financial management issues as asset/liability management, cash flow forecasting, and managing liquidity, LOMA’s Treasury Operations Committee sponsored a conference, Liquidity, Investments, and Solvency, on October 1-3, 1984 in Chicago.

1: (R. Fred Richardson, President & COO, Hartford Life) These dramatic changes come as a result of the changes in products and services in response to the changed economic environment. It was, in fact, a liquidity matter which first signaled the revolution. This occurred in April 1980, when for the first time in life insurance management experience, our industry had to borrow money from the banks to meet the cash requirements.

As an aside, I subsequently heard a bank speaker gloat that life insurance management would, in the future, have to take advice on management from their bankers. In view of the management record or bankers, we can only hope that this was an inaccurate forecast.

When I joined the insurance industry many years ago, it was a maxim of the business that cash flow would always be positive. Even actuaries who dared to profess that they did not believe in eternal life, did believe in eternal positive cash flow.

2: The investment anti-selection of, and market resistance to the cost of guaranteed cash value insurance are inescapable facts of our time. The investment profits which gave us our gloriously profitable 50’s and 60’s, and saved our bottom line in the inflation of the 70’s, are a thing of the past! We will be working for a fee! Our marketing organization will be marketing our investment management. Our investment performance becomes the product.

3: The most critical areas of treasury and investment operations, with respect to both old and new products, is the matching of assets and liabilities. This is the great weakness of financial institutional structure in the U.S. Our financial institutions are almost all seriously mismatched (Banks, S&L’s, Mortgage Companies, Life Insurance).

The principal cause of this serious problem was our amazing economic stability over almost a century. In a country where interest rates on Manhattan Mortgages did not vary by more than 2% for 86 years (ending in 1962), it was natural that we developed our accounting principles, our financial regulation, our products, and our management policies on the assumption of economic stability.

4: The next mental set that threatens our health is that, “Guaranteed cash values are a fundamental aspect of individual life insurance.” There is no amount of reserve that would make these risks safe, and provide a saleable product!

5: In the future, we must only guarantee that which we can invest properly to do with safety, on a cash matching basis, and at a risk premium which the policyholder will be willing to pay!