Why I Love Insurance: Nick’s Story

This article originally published on InsNerds.

Like many of you, my path into the insurance field was not a contemplated career decision. I didn’t even really know what insurance was when I was in school. For better or worse, I fell into it. And by “fell”, I mean I fell for the ‘hey, everyone needs to buy this stuff, and you will make a pile of money’ line thrown at me by a friend who happened to be a personal lines agent. Hook, line and sinker I swallowed it!

Fast forward to the present: While I don’t invite that particular friend to cookouts anymore, and while I haven’t quite fallen into that pile of money he pitched on me (not yet, anyways), I am still in insurance. It’s actually a very exciting place to be, and I’d like to expound on the many different aspects of the insurance business that make it one of the most stimulating industries out there and why I get so excited about the difference we are making in society.

At one point or another in my insurance career, I have played the role of gambler, scientist, economist, statistician, software developer, detective and/or salesperson. I don’t wish to exaggerate, James Bond, I am not, but you have to admit, doesn’t that sound interesting? You know that guy at the party who is giving advice on whether your claim was settled fairly? That would be me.

Or the guy telling you that red cars are not more expensive to insure than other colors? Me.

Or that Debbie Downer type telling you that, sorry, you don’t have flood or earthquake coverage on your current policy? Still me.

Or that hurricane insurance in Florida is not really “expensive”, it’s just that homeowners there have economic biases? Again, life of the party me.

I am a big fan of what our industry offers. At the end of the day though, insurance is nothing but a promise. A promise to make you whole again. That promise and our legacy to fulfill that promise was really brought to my attention on a trip I took to London. London is the insurance capital of the world. As part of the trip, I got a personal tour of Lloyd’s of London. Now, most people have heard of Lloyd’s at one time or another but those same people probably do not know what Lloyd’s is.

Lloyd’s is not an insurance company. It is a marketplace, for lack of a better word. It is a center of insurance commerce where underwriters from various insurance firms meet with brokers and get insurance coverages into place. These are not your run of the mill insurance coverages. This is generally either the most complicated insurance coverages or the newest and most unique coverages. And while insurance was bought and sold well before Lloyd’s was established, it was that coffeehouse in London, that brought together mariners in need of minimizing the high costs of potential losses with investors who had the capital to back those shipping routes against losses.

At Lloyd’s, I was introduced to the Loss Book. The Loss Book at Lloyd’s was the official book that summarizes all losses to Lloyd’s underwriting from Marine mishaps. The entries are written with a feather quill pen. On the main underwriting floor there is a sealed case that contains an open Loss Book for the exact year representing 100 years prior. In 2012, the year that I visited, the Loss Book was open to the most famous maritime disaster in recorded history, which by my luck happened to occur 100 years prior to my visit: the Titanic disaster in 1912.

Lloyd’s underwriters were the insurers of record for the Titanic. My tour leader stated that all claims from that disaster were settled within 30 days. He went on to inform me that in the history of Lloyd’s some very large claims were paid over agreements written over drinks on napkins and drink coasters. The entire facility is a testament to the promise that has existed from centuries ago to this day. From the Lutine Bell to the Rostrum, to the external architecture,

It was hard for me to not have a renewed appreciation for what it is that we do. That promise and the trust of that promise makes the business world tick. The cathedral that is Lloyd’s could not be built on a sham, deceit or manipulation. It was built on centuries of delivering on their promises. Not just stories of the Titanic, but the 1906 San Francisco earthquake, 9/11, the Joplin tornadoes, and many, many more.

I left knowing that we are in an honorable profession. I stopped listening to those that deem “big insurance” as some greedy money making scheme. Those people have not looked into the details to see how deeply our industry allows business to function and thrive and how we are there to get families, business, and society back on its feet.

As often as I can, I let people know how proud I am to be in this industry. While high tech and high finance get much of the glory, there are few industries that will give an ambitious worker as many opportunities to touch so many different aspects of the business world. My day to day work now revolves around natural catastrophes. I spend much of my time thinking about how to identify, quantify and finance this one area that seems to have our industry in such a bind recently. It is critical that we solve these problems, not only for my employer, but for the stakeholders we are making promises to and for society in general. Our solutions have allowed the world to advance forward for hundreds of years, and without a doubt, we will continue to make new promises and keep the world advancing for at least the next few hundred.

About Nicholas Lamparelli

Nick Lamparelli is a 20+ year veteran of the insurance wars. He has a unique vantage point on the insurance industry. From selling home & auto insurance, helping companies with commercial insurance, to being an underwriter with an excess & surplus lines wholesaler to catastrophe modeling Nick has wide experience in the industry. Over past 10 years, Nick has been focused on the insurance analytics of natural catastrophes and big data. Nick serves as our Chief Evangelist.