Richard Lord

Q: You’ve been at Milliman for 22 years—your entire career. Can you tell us a little bit about that?

I started at Milliman here in the Pasadena office working part-time as a college sophomore. I showed up in the summer of 1987 and never left.

There have been times where I've been offered jobs at other firms—offered money that was quite a bit more than I was making here at the time. And there was never one offer that I saw as better than my long-term prospects at Milliman, because here I had the opportunity to become an equity principal. At Milliman I can not only manage my own consulting practice but get the returns from it, as well. People usually jump ship for some increase in position or salary to get to the next level. I’ve never felt the need to do that.

Q: A principal I spoke with last week described his overall vision of a career at Milliman as a marathon, rather than a sprint.

I think that's true. For those at Milliman who take the long view and really think about it as a career, it's hard not to come to the conclusion that this is the most rewarding place that an actuary can work.

One of the things about Milliman is that there's no ceiling. Your advancement is largely in your own hands, and so there’s no need to jump to a different position at another company. In fact, one of the key people at the office here is a really young guy who’s well on his way to being a principal here. He worked in the actuarial department at an insurance company but he switched to Milliman when he saw the chief actuary slot at his previous company filled by a very content guy in his early 40s. As soon as he saw that, he knew his career path there was limited. He saw Milliman as a place where there was unlimited potential as far as what he could do as a consultant here.

Milliman is good for people who like to take things into their own hands, as opposed to people who like to be told what to do. There are some people I've encountered who are more comfortable working in environments where they've got a 9-to-5 job with a boss telling them their responsibilities and duties. As Milliman’s become a bigger firm, I think there's more room for those types of positions, but overall I do think that it's largely a place that favors the entrepreneurial types.

Q: How would you describe Milliman’s reputation?

I believe the people who've worked in the business for a while tend to think of Milliman as a company that is staffed with consultants who are very technically proficient. I think there's a good understanding that Milliman is staffed with a lot of key professionals who largely manage their own consulting practices.

Q: You’ve worked in some diverse areas: medical professional liability, workers' compensation, and multi-peril crop insurance. Is it unusual at Milliman to have such a broad range of specialties?

I don't think so. I do think that consultants tend to be known for some things, and having some focus in specialization is a good thing. Raji Bhagavatula, for example, is a well-known, famous asbestos and environmental liability actuary and she's testified in front of the Senate, but her consulting practice is broad and the clients she serves do a lot of different things. I think that it's in the nature of our work to be exposed to a lot of different things. As a company actuary, you typically work in a department that does a specific type of estimation. You're doing a premium rate estimation or you're doing a loss reserve estimation and that's your job. At Milliman, you're generally working in an office that's got a number of consulting actuaries, and you're an analyst and you're working on projects all over the place. You have very broad exposure and you tend to become an expert in several different things. Personally, I do a lot of work in the self-insured healthcare provider side, so it’s natural to do medical malpractice and workers' compensation.

Crop insurance, on the other hand, is an entirely different thing. Crop insurance is largely run by the federal government. All the rates are handled by the federal government, so there really are not that many people out there doing this kind of work. But I was exposed to crop insurance work for one of the actuaries here who happened to do that, and then I took on that consulting role and became one of the few actuaries in the country doing that kind of work. The Federal Crop Insurance Corporation is a very large governmental entity that was put together after the Oklahoma Dust Bowl in the 1930s. They have a $10 billion a year operation, and they needed their very first Statement of Actuarial Opinion because their auditors required it last year. Even though they're a government corporation, that was something their auditors want them to start doing, so they called us at Milliman, because we have an actuary who’s one of the better-known people for doing that.

Q: Is that you?

Yeah, that was me.

Q: Just clarifying.

If you want the top expert in just about anything, you're going to find them at Milliman. It's one of the things we're known for.

Q: Are you saying that the actuarial consulting the federal program asked for a few years ago was the first such outside consulting thing they'd ever sought since the 1930s?

We've been doing consulting work for the government on their crop program for many years. One of the things that actuaries do is issue formal Statements of Actuarial Opinion—stating an opinion on the loss reserves of an insurance company. We confirm that the reserves are adequate to meet the liabilities and we sign our name to it. That's an important function we serve. But in this case, yes, it's the first time they'd asked for a Statement of Actuarial Opinion in 80 years—and they came to us.

Q: How many people work in the Pasadena office?

We have about 20 people, which makes us a medium-sized office by Milliman standards.

Q: Could you talk about what it’s like to work in the Pasadena office?

Our office has a relaxed and friendly atmosphere. The type of people that I know throughout Milliman tend to be very nice, easygoing people, but I would also characterize the atmosphere in the office here as one where people work very hard. People tend to put in pretty long hours here. They tend to like what they do and to work very hard at it. They're very smart people, very interesting people.

Q: Do you know any actuary jokes?

An actuary goes duck hunting with a couple of other guys. A duck flies by, and the first pulls up his shotgun and he shoots a foot in front of the duck, and the second guy picks up his shotgun and shoots a foot behind the duck. And then the actuary puts down his shotgun and says, "See, I knew we'd hit it." (laughs)

Q: Whoa.

I think that's a joke only an actuary can love. (laughs)

Q: Or maybe even understand. (laughs)

Q: What's the most significant outcome of the work that you do?

It’s a little hard to say, because there are many different types of things we do and the uses and outcomes of those are very different. In some cases, what we do is help people make decisions. One way in which we help our clients, for example, is in the realm of insurance-related liabilities. Many of our clients have very complicated and large liabilities to manage, and we are very successful at helping them manage these risk exposures. We do that in a couple of different ways. One is to simply help them determine the right amount of risk that they, as a company, can assume. Often, these companies will self-insure, meaning they retain all of their liabilities under some sort of commercial umbrella policy. And quite often, companies form what they call a captive insurance company, in which they form their own insurance company that has no purpose other than to write them a single insurance policy. So, in many cases, it makes more sense for them to have the expertise to manage these risks internally, rather than to go out and buy insurance. In some cases, there really isn't a market big enough to handle their exposure. So a lot of what we do involves working with corporations to help them manage their liability risk exposures, which entails providing them with a very full range of actuarial service and providing them with people who understand not only the risk exposure itself, but people who understand their business, as well.

A lot of our clients are insurance companies themselves. Virtually all insurance companies have an actuarial department but we still do a lot of work for them, simply because they like to have an independent, outside actuary doing that opinion.

Q: Could you talk about work/life balance at your office?

At Milliman, we tend to have professionals who are very career oriented, people who invest a lot of time and energy into their careers. Then you pick up an issue of Newsbreak and you've got Milliman consultants digging up fossils in Mongolia, or running marathons, or whatever they do. For a company that is full of people who work extremely hard, put in a lot of hours, travel, and are very career oriented, at the same time it seems to be a staff of people who have these very diverse and interesting interests outside of their profession. I don't know exactly what it is about Milliman that makes that happen, but people at Milliman do tend to lead very active lives outside of their career.

It could be that the type of person who likes the challenge of working here—taking on all the different client challenges and the variety of consulting assignments—is probably the type of person who has a lot of different interests. One example would be the actuary who was my boss for many years, and whose business I ultimately took over. He was a baseball nut. He decided that he wanted to start buying minor league baseball teams, so he became an investor in a few. Then he decided he wanted to start managing minor league teams and he ultimately retired from Milliman at age 48 or 49 to do it. He's now the owner and general manager of the Yakima Bears in Washington, and he is a part owner in a number of different minor league baseball teams. But he was pretty involved with baseball even while working full-time at Milliman.

Q: What's your outside passion?  

I have three children five and under at home, so I would describe them as my passion. I am a licensed pilot, even though I don’t practice that hobby quite as much as I used to.

A couple of months ago I rode a dirt bike 350 miles across Baja, California. Chris Haines, who's one of the famous Baja 1000 riders, takes small groups of riders and it's fantastic. You're going with professional Baja racers, and you're riding these heavily modified dirt bikes that are designed to handle the terrain. We stopped for lunch in front of this shipwreck. It's one of these weird things that you only see in Baja, but apparently someone had been sailing up the coast on one of these large fishing boats, and eventually they ran aground. They just left the ship there, so this thing has slowly started to decompose. And one of my favorite pictures was taken on a motorcycle in front of this shipwreck down in Baja. That would be a little out of the ordinary, I suppose.

Work/life balance is important to me. I'm in the office early in the morning and I'll probably work late into the evening, but I only work two miles from home, so at 11:00 today I’ll go home and go on a four-mile run and feed two of my little kids lunch, eat lunch myself and then go back to work. That type of thing is not uncommon among Milliman consultants. They are not slaves to the office. Despite the fact that we're people who tend to work very hard and be very committed to our careers, I think we are all also people who have lives outside of our work.