Post summer internship thoughts

Reflecting upon my internship this summer, I’m proud of my experience. Going in, I did not know what to expect as I had never gained exposure to finance or insurance. Coming out of it, I gained insights into one of the most secretly cool industries.I also enjoyed the balance of structured work and independent work throughout the internship. While my supervisor had a few long-term projects as well as day-to-day tasks, I also had the freedom to choose what I most desired to learn. Because of that combination, I took initiative to learn VBA, conduct discounted cash flow analyses (one way of valuing the company and its segments, essentially), understand the various commercial insurance products along with their market sizes, and help create visuals for the company’s second quarter annual report. Certainly, there were other fun tasks involved (double-checking numbers with verbiage in the operating review document three times or screening about 230 resumes), but I learned something from all of them.

I’m grateful for the CFO/SVP of the US finance group, who as a Columbia alum supported me the whole way. He even scheduled a separate session at the end of my internship to go through my resume with me and give me advice on the interview process. The chance he gave me this summer is one like no other, and I hope to one day be an inspiring mentor just like he is.

Knowing the people I'd like to work with

The favorite part of my summer experience at Argo is the people I met. Their down-to-earth yet ambitious, outside-the-box mindset continue to inspire me.

Take one of our several lunch meetings, for instance. During our walk through SoHo, they would debate the merits or problems of existing insurance products merely for fun and for pure, intellectual discussion. Where will the big business of the future be in insurance, and why? How can insurance products be modified to prepare for a new influx of coverages stemming from modern issues? As opposed to bragging about the huge deal or client they were working on, I loved how my colleagues were genuinely interested in such discussions for their own enrichment.

Moreover, they showed me how important the people are to me wherever I eventually work. I may end up spending every day and all day with my colleagues - we might grab meals together, visit Starbucks together during break, potentially work weekends together, and maybe some days wind down after work together. The people I worked with this summer collectively demonstrated an environment not dissimilar to one I’d like to be in.

After my last day, I ended up visiting the office a couple times afterwards to say hi to the team and discuss non-work related items. One of them even chatted about mobile app ideas over lunch with me, with others pitching in what they’d like to see. I realize that these post-work visits really say something in terms of the kind of people I look up to, and I hope to keep in touch with them for a long time to come.

Researching is like going to the gym: highly rewarding afterwards

The last week of my internship at Argo, I was tasked with covering four insurance competitors and creating two-page summaries for each. That week turned out to be one of the busiest but best weeks of the summer for me. Throughout the past two months, I had done plenty of research on specific insurance products, market sizes, and competitive landscapes. But the last project made me apply all the techniques previously used to create my final deliverables - concise company snapshots.

The tasks appear simple - look up a company, find a list of numerical data, create graphs, and put them nicely together on one page. But I have since learned that sifting through piles of information for a single number can take hours. From combing through SEC filings to navigating databases (Capital IQ, SNL Financial, Moody’s) to searching the 59th page of Google, I now have a better idea of what research can truly entail.

The second most time-consuming component of the project was formatting the deliverable.* All four main sections - along with their separate headers, pasted charts, key financials - had to be pixel perfect, with every element formatted with official company colors. A page with five pie charts had to have exactly the same margins with the font sizes just clear enough; and all the sizes of these items would be completely different for a page with a pasted Excel sheet and just three pie charts. Anyhow, because of all of this, I now silently admit my newfound love for Powerpoint.

At the end, I felt satisfied from these accomplishments (and yes, I did feel proud of those four pages). That last week made me appreciate what being detail-oriented really meant, and I hope to continue with that mindset when working on future projects. There were certainly grueling moments, but through it all, I highly enjoyed the process.

*Have I mentioned that keyboard shortcuts in Powerpoint (and not just Excel) are amazing?

Appreciating the insurance industry

I recently had the opportunity to ask the director of corporate finance a few questions. As a Harvard graduate who worked in equity research (covering insurance companies) before joining Argo, he kindly gave me insight on how he views the field. Below is a snippet of his reply when I asked him what he thought made insurance a unique industry to work in.

“From a finance standpoint, insurance is a very difficult industry to understand. If you think of other industries, you have revenues and expenses, both of which are pretty easy to quantify, keep track of, and budget for. When you look at the insurance industry, you collect premium, which is a known quantity, but you don’t have a costs of good sold (COGS). Because if you think, 30 years ago everybody who worked in commercial policy had no idea that there was going to be asbestos. They never expected that they would be paying a multiple of what they collected in premium for a risk that never could have been foreseen. So it is a very difficult industry in that regard, difficult for people to make money. Therefore, I think it’s the most unique industry, and understanding it means seeing things through a different lens.

Every time a company reports its earnings, those aren’t real earnings. They could have reported earnings for five, six years and then realized they didn’t make a penny. So how do you invest in a company like that? I think it requires a much more macro view of the environment. On top of that, insurance is a very cyclical industry. If you look at the history, the whole market has made money for a number of years and has lost money for a number of years. So there are a lot of lags in the industry.

Also, insurance is an industry that’s primed for a lot of change. The people who are in it typically are not risk takers, are not the people who are incentivized to innovate. So now we’re in an interesting time in history where technology is being introduced into all aspects of a lot of different industries - namely, disruptive technology. Everybody in the insurance industry realizes that they need to incorporate it, but nobody really knows how. And so far that reason, it’s an interesting industry to be in.”

Meeting people for the conversations

‘Network within your company for future opportunities, both for you and the person you meet.’ A great piece of advice, although I see it a different way. When I ask the finance team for one-on-one lunches, I look forward to hearing about their personal stories and why they chose their unique paths. My favorite part about these casual conversations are ideas, passions, and how the two come together. Equally interesting is hearing each person’s ambitions as well as the spontaneous advice I’m given from time to time.

One of the conversations I will remember for a long while actually stemmed from these latter subjects. That afternoon, a director in the finance team began telling me about the many possibilities open to our generation upon graduation. He observed how various technologies (including enterprise software) already revolutionized several industries and how it would only be a matter of time before others like insurance would evolve as well.

Further, he brought this up to show me how I could leverage the power of disrupting technology in my career endeavors, even if I wasn’t a developer or engineer. He mentioned those who, years into their career, have gained a deep understanding of their respective industries. They are the ones who can see the flaws, the ruts, the inconveniences of the system they work with. Oftentimes, they have the knowledge but not the technical skills or access to skills necessary to make needed improvements. Meanwhile, many of us millennials come out of college bold, fresh-faced, and ready to put in long hours as we enter the workforce. We, however, lack experience and industry knowledge compared to the rest of the professionals.

Thus, my colleague encouraged me to work with those who did understand the big picture and could point out the cracks before others see them. Even if we lack field experience to identify problems, we have the resources to solve them through technology, the confidence of youth, or otherwise. But for all of our smarts, we can only create beneficial solutions if we manage to find out the actual issues.

Want to learn it? Rebuild it.

“Here’s an income statement. Rebuild it in Excel.”

On the first day of my internship at Argo Group, my fellow intern and I were given what first seemed a straightforward task. However, little did I realize by doing so how much we would learn about the meaning of every line on the profit and loss (P&L) statement of an insurance company.

While figuring out formulas by trial and error consumed a significant portion of the morning, such formulas became rather ingrained in us when we finally found them.* This makes sense - we are not being lectured to; we are not learning in a passive state. Instead, we actively re-created the income statement and through the process learned the function of the included elements for the first time. Admittedly not the smoothest ride but certainly an efficient way to gain a strong grasp of the concepts.

The same applies for learning about other industries or software. Take Adobe Creative Suite, for example. As I walk through the subway tunnel or sit in a train car, I’m often fascinated with the advertisements that plaster the walls. What if I sat down one day and recreated a Svedka subway ad with all its vibrant color, abstract brushes, and splashing water? One could learn Photoshop pretty quickly simply by doing so, simply by forcing herself to Google countless times on how to create this effect or use that tool.

My personal favorite is the set of ads by Jet Blue. Colorful and minimalistic, yet clear in their depictions. Might not be difficult to recreate in Illustrator, but the team or person who originally came up with the concept is brilliant.

Returning from my tangent, my summer internship thus far has made me realize the full value of learning through rebuilding. Subsequent projects here include rebuilding and applying various analysis models for the company's US finance department. Lots of learning!

*For instance, the Other Reinsurance Related Expenses number is not figured into Underwriting Expenses, but it is for Underwriting Income, Loss Ratio, and Expense Ratio. Just saying.