ACORD President and CEO Bill Pieroni Discusses ACORD’s US P&C Value Creation Study

Stewart: What is Acord, and what do they do? Let's find out today with Bill Pieroni, CEO. Welcome Bill. Thanks for being on.

Bill: Oh, thanks for the invitation. We're very excited to be part of the podcast and to speak to your listeners.

Stewart: It's great. My name's Stewart Foley. This is the Insurance AUM Journal Podcast. Get the formalities out of the way. Our listeners don't know that you and I've just spent the last 15 minutes going down memory lane of all the work that you've done in Missouri. So welcome. Very warm welcome. I don't know beans about Acord. What does Acord do? Can you tell us a little bit about that at 50,000 feet?

Bill: Absolutely. So this is our 50th anniversary this year. We have 36,000 members globally, and we're the global standard setting body for the insurance industry. And we'll talk a bit about those standards, but I don't want to bore your listeners too much because I know they may be in a different part of the insurance industry. But we have on 1,200 standardized transaction types across the value chain that help to support, apply, quote, bind, claims processing. When you look to our 36,000 members, we've got all of the major brokers, all of the major P&C writers, life and annuity writers, reinsurers, and solution providers. We are in 100 plus countries. And our standards are used across about 90% of the global premiums written worldwide.

Bill: We have everything from those standards, as I spoke about, to forms. We have reference architecture components where software providers can build solutions for the industry. We conduct about 3,000 training sessions a year, 300 to 400 events and idea sharing platforms. And one of the things that we do every year is around 20 market studies. And I know we're going to talk about P&C Value Creator Study in a moment. What's a snapshot of what we do every year? About 6,000 regulatory submissions on behalf of the insurance industry, 7,000 policy admin underwriting claims systems built using the Acord standards. In London, almost 13 and a half million annual message transactions, 150 million annual forms and structured data assets in the United States. And in the US, about a quarter of a billion annual messages using Acord standards. So that gives you a snapshot. These standards are technical. They have a lot to do with IT, but they're also financially related and accounting.

Bill: Stewart, back to the studies. We do a number of studies. Some of them we do every year. Some of them we update on a regular basis. We have studies around value creation, technology, and execution. One of the interesting studies that we've been doing, that I've been doing personally for almost 30 years now, our property and casualty value creator study. And I know we're going to spend our time talking about it. And in anticipation for your questions around assets and investment portfolio, we did a deep dive just for this podcast. And it was incredibly interesting. I know we caught up before the podcast started. But some incredibly interesting insights regarding the investment portfolio of these value creators. So I'll pause right there before we get into the study and give you a chance to further focus me.

Stewart: So tell me, the name of the study is the 2021 Acord US P&C Value Creation Study. How are you defining value creation?

Bill: That is a great question. So when you look to our industry, there's a number of things you could look at regarding value creation. You can look at combined ratio, ratings, growth, market share, dividends paid, brand positioning, customer satisfaction, how attractive you are to talent, social responsibility. But for our study, we look at cash flow. And this is where I think the asset professionals would like it. We look at cash flow as a percent of capital. So cash flow versus cost of capital. And we'll talk a bit about the study, but what we do is we look at cash flow generated from underwriting and cash flow generated from investment returns.

Bill: Now to jump ahead a bit, those firms, those carriers who exceed their cost of capital through both  underwriting and investment, we call sustainable value creators. For those carriers who exceed their cost of capital solely through investment returns, but destroy value, had negative cash flow from underwriting, we call them hollow value creators. And for those carriers do not earn their cost of capital, we call them destroyers. Now backing it up again, we look at the 100 largest carriers in the United States. 48 of them are publicly traded. And I bring that up because we always like to look at total shareholder returns to see if our model is predictive. Whilst it's only 4% of all the insurers in the United States, it's 88% of the premium. And the smallest carrier in our study is 600 million and the largest is 65 billion.

Bill: So despite the fact that it's only 104%, we're nearly 90% of all the premiums. And we're dealing with a statistically valid sample size of carriers and premiums written. And just to let you know, it's 20 years, it's 32 lines of business across every jurisdiction in the United States. So you think about 100 carriers, 20 years. That's 2000 carrier years worth of data across 32 lines of business across every state. And we've been doing it now for decades. So you begin to get some very useful insight, not least of which is the share returns.

Bill: So when you look at those three tranches, there are some very interesting insights for the 48 publicly traded carriers.

Stewart: Yeah, it's interesting. So let's talk about strategic and tactical observations that you've made in terms of size, scope, strategies, lines of business, and so forth, some of the things that you mentioned. What did you see?

Bill:  Sure. Let me first take five seconds here. The average return for our study, out of the 48 publicly traded, 52 are mutuals. The average share return over the 20 year time period study, that's real share price appreciation plus dividends, was 529%. This is 20 year time period. The value destroyers had 72%, hollows 210%, sustainable 727%. So literally it's nearly 2X more than the study. So just to help the listeners, and to keep people from sending you notes, I did nothing more than applied Ben Graham's techniques from the 1930s, 1940s, in looking at cash flow is as a percent of capital. This is just an EDA-like model. Now of course, we need to adapt it wildly using yellow books or statutory filings to take that out. But that's what we essentially did.

Bill: So a couple of observations regarding scale and scope. When you look to size, what you find is very interesting. So when you look to any metrics, whether it's LAE, pure loss, investment return, underwriting expense ratio, general expense ratio, what you find is that the larger you become as a carrier, the more you approximate the mean. There's a mean reversion. But being smaller doesn't necessarily mean you do better. So imagine if you took a normal curve, turn it at 45 degrees, you have high levels of variation for a smaller carrier. So you could have, it looks to us, greater degrees of strategic and tactical degrees of freedom around superior performance, but you also can have inferior performance. The larger you become, it dampens the volatility around performance, but it seems to limit the strategic and tactical degrees around superior performance. So that size here, seems to help and hurt. It helps you in that you approximate kind of average performance, but the larger you become, the more difficult it is. It's not to say it's impossible because there are some large carriers out there doing it.

Bill: Now, when you look to our study, 56% of the top 100 carriers premium was personal lines, 44% was commercial. When you look to sustainable, those that generated positive cash flow in excess of their cost of capital through investment and underwriting, the mix was 57-43. So in terms of commercial versus personal, no real change there. When you dig into the commercial lines, 22% of the study was general liability, 14% worker's comp, 13% commercial multi-peril, 14% commercial auto, 4% fire, 30% other. Same. Very close for the sustainables. Where they did differ, though, is 33% of the commercial lines was other. But when you look to the sustainables, they assiduously avoided some lines, but they also wrote more heavily than others.

Bill: So where did those sustainables write? They were heavier in reinsurance. They were heavy with allied lines. They did, surprisingly, med mal was relatively attractive over the time period we studied, and it was 20 years. Product liability, boiler and machinery, mortgage and financial guarantee. And then what did they avoid? They avoided inland and ocean marine. They avoided accident and health, crop, farm owners. So it gives you some sense as to which lines.

Bill: Now, when you look to personal lines, the top 100 carriers, 74% of the personal lines premium was auto, 26% home. Of the sustainable value creators, 79% auto. A little higher in terms of auto. You got some monoline auto writers in there with home as an accommodation, with home being 21%. So that gives you some really interesting stats. And I'll give you a chance to ask questions, but I want to take the listeners through the operating ratio trees because this is where we're going to get to the investment income differences, which are very interesting among sustainable, hollow, and destroyers.

Stewart: I love the categorization of how sustainable, hollow, and destroyers. I mean, that really tells a very important story. Do you see a correlation of size to sophistication?

Bill: So when you say sophistication, do you mean sophistication of strategic intent, underwriting prowess, claims, digitization? Because we've got multiple dimensions there. So help me a little.

Stewart: Yeah, absolutely. All those. Does that help?

Bill: Okay. So what we find is that the larger you become, the more work it is to drive consistency and constancy across the enterprise. So you tend to see higher sophistication amongst the smaller carriers. My hypothesis, only because it's easier to execute, right?

Stewart: That makes sense.

Bill: So if you're a regional or a state-based carrier, it's easier to have a digital... And one of our other studies, which we're not talking about today, is digital maturity. We tend to find, guess what, carriers who are relatively smaller, it's relatively easier to manage the change journey from digital laggard to digital competitor. So we tend to see it. So not to trivialize what it is now. What is interesting, though, is strategic intent. And I know you asked about that.

Bill: Before we get in the operating ratio tree, for those who've heard me speak before, I tend to simplify our industry. There's only four strategies. That's it? You can compete on price, operational excellence, right? I don't like that because if you compete on price, you lose on price. So you're efficient. Next you can compete on customer intimacy. The experience. You compete based on the interaction. Next, product leadership. I'm selling you a solution that no one really sells. It's truly unique. I'm competing based on offer quality. And lastly, innovation. I'm competing based on discontinuous change. Something really unique.

Bill: Now this last study, Stewart, what we did was we tried to classify sustainable, hollow, and destroyers into one of those four. And we were having a difficult time. Because we were finding that the sustainables, I couldn't say that it was just... By the way, the best strategy to use historically was always product. If you're selling something else that someone else doesn't sell, well, it's much more difficult to shop for it. And you tend to have differing price elasticity of demand, and you could do well.

Bill: However, what we found is that, and this is important for the listeners, increasingly sustainable value creators, those exceeding their cost of capital through underwriting and investment returns, actually were using two or more of these strategies. So we created another category called composite. And composite means you're working on two or more of these, right? So you've got a good price, and you have a unique customer experience. Or you're selling a differentiated product, and it's priced extremely well. And what we found is that 52% of the sustainable value creators had a composite strategy. That's not something that we've ever seen before. But by the way, it's much more difficult if you're a larger carrier to operate that composite strategy. Do you know what I'm saying?

Stewart: Absolutely.

Bill: It's very, very difficult to do. Very, very difficult.

Stewart: So let's talk about operating ratios and operating metrics. Because I love these stats. Our listeners will love these stats too. So can you talk a little bit about all the operating ratios so I can geek out on those too?

Bill: If we think about the operating ratio is the combined ratio minus the investment income. And the combined ratio is the underwriting expense, plus total loss, plus [inaudible 00:13:46] dividend. And underwriting expense ratio is the sum of commission, taxes, license, fees, acquisition in general, and total loss. The sum of pure loss and LAE. So let's work from top to bottom.

Bill: The operating ratio of sustainable value creators over a 20 year time period across all lines, and by the way, we've got this broken down by state, by individual lines, by commercial personal. But for the sake of brevity today, let's just look at the total book of business. Sustainable value creators had an operating ratio of 80.6 versus a study average of 87. So wow. That's a big deal, right? Seven points better. Now hollow had a 90.9, that's 10 points higher than the sustainables. And destroyers had an operating ratio of 94.7. So again, average, 87 operating ratio. 80.6 for sustainable, 90.9 for hollow, and 94.7 for destroyers. So big deal right there.

Bill: How did they do it? Well, let's look at the combined ratio versus investment income. Because the operating ratio is the combined minus investment income. Now the combined ratio for the sustainables was 96.1. Remember they generated a cash flow from underwriting. So of course, it would had to have been under 100. But we did not use combined ratio, we'd looked at cash flow. The hollows had a combined ratio of a 104.3, destroyers at 105.7, and a study average of 109. So out of the three tranches, the sustainable, generating positive cash flow through underwriting and investment, and the hollow only through investment, and destroyers not getting it. 96.1, 104.3, 105.7, for the average of 100.9.

Bill: Now let's go to the investment income ratio. Now, given that hollow value creators relied upon investment returns in order to make up for subpar combined ratios, you would expect that their investment income ratio was highest. It was not. Guess what? But we're going to get to a very interesting insight regarding the absolute return. But the sustainable value creators had an investment income ratio of 15.5. Now remember, that is the investment income divided by net premiums earned. So I don't want any of the asset managers out there saying, "They got 15.5 on a 20 year basis." Easy, that's net investment income divided by net premiums earned. But they had an 15.5, hollow 13.4, destroyers 11.1. So interestingly, good carriers who are good at underwriting and good at claims are pretty darn good at getting investment returns too. And those that solely rely upon them, they did okay. Destroyers had 11. The industry average was a 13.9 on that 20 year basis across all lines. So sustainables were the only ones outperforming the industry average on investment income.

Bill: I know we're going to dig into investment income, but I do want to talk a bit about the other dimensions here. So underwriting expenses. Clearly the sustainables had the lowest underwriting expense and the lowest total loss. But let's get to the interesting piece. One thing I want to make clear to all the listeners here, the commission ratio was the same, nearly the same, 10.6, 10.8, 10.3 for sustainable, hollow, and destroyer respectively. The idea somehow that direct carriers have an advantage, no. Not true. They all had roughly the same commission levels. In fact, another study we did showed that two thirds of all the value created globally in the insurance industry is created by carriers using independent agents. Independent agents give you great business. Not price shoppers, loyal customers, high product density. This idea somehow that direct is an advantage. It is not. It is not borne out in the data.

Bill: Now, what's interesting is the sustainables spent less on acquisition, 6.3, versus an industry average of 7.6, and less on general expense, 5.7 versus 6.2. How do they do it? We talked about it, digitization. They had higher levels of technology. They use people to form relationships, to educate consumers. But when it came to underwriting and pricing and rating, that was automated. And you saw it. And if you think about acquisition in general being summed together, they had lower acquisition and lower general. And there it was. And lower than everybody else.

Bill: Now, total loss ratio. Now losses on average in the United States property and casualty industry averaged 73.5 over the last 20 years. So 73 and a half cents of every dollar spent went out the door in claims. Got it. Total loss for sustainables was a 70.3. Wow. Total loss for destroyers was a 79.5. Almost 80 cents of every dollar. Now I will tell you, Stewart, historically, if you overspend on LAE, you save on pure loss, right? If you spend more money adjusting, you see... Now, if you underspend on LAE, well, you'll see it bleed out in the indemnity cost because you're not really adjusting it. And if you overspend on LAE, you can alienate customers.

Bill: So there's this triumvirate here of customer sat, LAE, pure loss, where you make this trade-off. For the first time since we've been doing this study for over 20 years, we have found that sustainable value creators had the lowest LAE, 11.3 versus a 12.0 to adjust, but they had the lowest pure loss, 59.0 versus 61.5. Something has occurred over the last several years through automations, through the application of technology, through better business processes, through measures, incentives, implications. We've got sustainable value creators underspending to underspend, right?

Bill: And by the way, our sustainable value creators had the highest customer sat levels, lowest complaints amongst insurance commissioners, highest product density per household, and highest retention. So before people say, "Well, yeah, they're alienating customers." They are not. So again, before we dig into those investment income details, I at least wanted to say, guess what? Independent agents, bedrock of our industry. Forget about it. They're great. Great customers. Next, acquisition and general expense. You have to automate and digitize. And lastly, applying that same type of technology to claims allow you to underspend.

Bill: Now, interestingly enough, the destroyers had the highest LAE on average and the highest pure loss. You're overpaying to overpay. In some theory, you'd probably be better off letting customers self-adjudicate. At least you'd have a much lower LAE, and how much worse are you going to be, right? They were a full five points higher than the pure loss ratio for the industry. This so interesting to see. And by the way, we don't have time today, but as you look at lines state by state, these messages only become more profound and more reinforced.

Stewart: So kind of bridging the gap from the operating side of the investment side. Buffet refers to flow, right? And when you get into cost of capital, one minus the combined ratio is basically your cost of funds, right? So if you were underwriting-

Bill:Yeah. We're a leveraged bond. We're a leveraged bond fund. That's right. That's right.

Stewart: So if the sustainable value creators are writing at a ninety-six and a half, their cost of funds is negative three and a half, right? And now you're going to take that and you're going to invest that money. And when you talk about the gearing of the invested assets to surplus, you can generate a pretty solid ROE out of there. And the story, in at least in my simpleton way to look at it, the whole thing holds together. What did you see with regard to total return among insurers in this study?

Bill: Now remember, let me remind everybody, net investment income is net investment income divided by net premiums earned. So those ratios of 15.5 for the sustainable versus 13.9, again, that's the ratio. But when you look to the absolute return, the absolute return for the industry over a twenty year basis year after year was 4.2 on a weighted basis. 4.2% was the average return. The sustainables had an average return of 4.2. The hollows had an average return of 4.4. They did have a better return, but their premium to surplus ratio, they actually kept more. They were leaner from a premium to surplus standpoint, right? So when you took that net investment income guide and net premiums earned, even though they had a superior absolute return at 4.4, it brought their investment income ratio down to 13.4 Because of their premium surplus ratio, because they had a smaller surplus base, right?

Bill:  And that's always the trade-off, how much surplus and reserve are you going to keep, right? So they did by themselves two tenths of a percent better. The destroyers had a net investment income return of 3.7%. So they had the lowest, the destroyers, right? So to remind the listeners again, sustainables investment income ratio, 15.5. Net investment income, a 4.2% average. 13.4 investment income ratio. Their return was 4.4. And the destroyers had an 11% investment income ratio on 11.0. And they had a return of 3.7. So what we did though, Stewart, was we dug down into where they put their investments across real estate, cash, stocks, bonds to see and to look at the return. And that was interesting. And we did that for this podcast in particular. And then we also tore the bonds apart to see how many were single A through AAA, how many were BBB, and how many were below investment grade. And again, we're going to see some very interesting stuff here, right? Very interesting stuff. But let me see if you've got any questions before we get into the details.

Stewart: The investment portfolios, you've got three value segments, sustainable, hollows, and destroyers. Were there any material differences in the mix of assets, and what those portfolios look like?

Bill: Absolutely, Stewart. So interesting to look through it. So when you look to the mix, 20 year basis weighted average for the investment portfolio. 62% were bonds. And we'll talk about those bonds. We've got the mix of A through AAA, A, and then below investment grade. So 62% were bonds. 23% were equities. Nine were other. And other includes private equity, hedge funds, mineral rights, aircraft leases, loans, real estate mortgages. So we know what other... And then 6% was cash.

Bill: Now to give you a sense, let's get the absolute return. So the gross yield on average for the 100 carriers was 4.2%, as we talked about, right? The premium to policy surplus was 0.86. So we got that. So the net investment income, the net premiums earned was 13.9. So good. So when we look to the bonds, the bonds returned, on average, 4.4% annually over the time period. We looked over the 20 years. The sustainers had a return in bonds of 4.3. And instead of 62% of their portfolio, bonds only represented 54%, right? And you can guess at where they made them, they had a higher [inaudible 00:25:03]. And so you have 54% of the sustainables were in bonds. The hollow, though, 73%, 73 cents of every dollar in their investment portfolio over a 20 year basis was sitting in bonds. And their return was 4.5 versus 4.4 of an average. So they did better, but they had nearly three quarters set in bonds. And the destroyer had 60% in bonds. And they had an average return of 4.1%. You can imagine why. All AAA, but we'll get to that in a second.

Bill: Stocks. The average was 23% of the investable portfolio was stocks. And on average, it had an average return of 2.9%. The sustainables had 20% of their portfolio in stock, but they had a 2.8%. So marginally less than the average. The hollows, though, only 13% of their investment portfolio were stocks. But their return was 4% CAGR. Much more aggressive, much more high levels of volatility, right? They got alpha, but they got beta too for it. And when you look to the destroyers, 34%. 34% of the destroyers were invested in stock, right? And they only had a 2.3%. So a very conservative stock portfolio. Remember their premium to policy surplus ratio is 0.78. So got a lot of surplus. So the buy and hold, never sell.

Bill: Now cash. Interestingly enough, normally you'd say, well, who cares about cash? Here's what we found. 6% on average for the industry was held in cash over the 20 year basis. 8% for sustainables. They keep their powder dry. They've got it there to deploy that. 8%. Only 5% for the hollow was cash, and only 3% of the destroyer. But remember, they had a premium to surplus ratio 0.78. The hollow premium to surplus ratio was a 1.08, right? So a bit leaner. So you can begin to see unique mixes.

Bill: Now, when you get to that bond portfolio, to remind everyone again, 62% was the average held in bonds, 54 for sustainable, 73 for hollow, and 60 for destroyer. Now when you looked to sustainables, 84.6% of that bond portfolio of their 54% of their investments held in bonds, were single A or better, right? So almost 85%. 11.3% BBB, and below investment grade, below BB, 4.1%. Now, when you go to hollows, these are the ones that were geared a little more for return, had combined ratios north of 100, only 83% of their portfolio versus 85 for the average was A or better. 13.1% BBB versus 11. So a little higher. And then they were below investment grade, 4.4 versus 3.7.

Bill: Now the destroyers, who had the lowest investment income ratio, 11.0, and the lowest gross yield of 3.7 over the 20 year period, they had 93% of their bond portfolio sat in A or better. 5.8% in BBB versus 11.3. And 0.6% below investment grade versus 3.7. So you begin to see the destroyers. A lot of surplus, very conservative. 34% were stocks, but they have the lowest equity return, and a high skew towards A or better, right? 93% of their bond portfolio. And that bond portfolio represented 60% of the destroyer's entire portfolio. So this was incredibly interesting to us to see this mix.

Stewart: It is really interesting. The work that you've done, it's amazing. And over a very long period of time. So compare and contrast, you did a life study as well. Can you give me some high level differences of the P&C study versus the life study?

Bill: Yes. And we serve the life insurance industry, and property and casually, as I said. One hundred  plus countries, 36,000 members globally. Property and casualty is difficult, complex and hard. But I tell you, the life insurance industry, really trying to look at a cash flow model is so, so difficult. Much more difficult, right? I'm showing my age here, yellow books, blue books. They tell me they don't publish them anymore, but you still can get your hands on them. In going through the blue book, when you look at these life products, there is such high levels of diversity from life carrier to life carrier, from product to product. Term, whole, variable, unit, fixed annuities, deferred annuities. Much, much more difficult to apply a free cash flow type model to it.

Bill: What we're finding is that free cash flow, when you looked at the property and casualty industry, has an incredibly strong correlation to total shareholder returns, right? Sustainable value creators, if you used our free cash flow model where you take that asset base and adjust it for current assets and PP&E. Pull out that non-interest bearing liabilities, and unrealized gains and losses, and then apply the cost of capital, you can do it. For life, so much more difficult to do it.

Bill: You also tend to see a decoupling of cash flow return versus share price. Where you see a very high R-squared between our cash flow model and total shareholder returns. You see a much weaker correlation. In fact, I would argue not statistically significant. So we have the life study. I like embedded value as a proxy. But we don't use embedded value in the United States. It's only used in other parts of the world. So we are still struggling here to come up with a model. So I guess I'm saying the screaming uncle a little bit. Very, very difficult within the life space. A lot more complex. Not to diminish how hard our business in P&C is, but life is a world unto itself. Extremely, extremely difficult. Non-trivial to do this analysis.

Stewart: You  saw it most recently, there's been a couple of big transactions in the private equity space. Allstate's selling their book to Blackstone in basically what is tantamount to a regulatory arbitrage. Do you see more of that sort of transaction happening, given the difficulties that you've just outlined?

Bill: Well, when I look to some of the forces facing the life insurance industry, we could have a period of very low returns. Unique, special central bank intervention. Not just looking at the United States, but globally. Perhaps the Japanification, right? This somewhat stagnant growth, relatively low interest rates. You've got emerging consumer segments, young people. Not necessarily the same type of buyers that we've had historically heretofore. You've got a paucity of demand for some of these products.

Bill: So you've got this perfect storm of somewhat muted demand, perhaps reduced investment income ratios. Obviously all insurance is sold, not bought. That's doubly true for the life insurance industry. I think there's a lot of life writers out there saying, gosh, I could use this capital to innovate, invest, modernize, transform. I would think that it's more likely than not that we will see more of it. How much of it to the extent I think will be driven by macroeconomic factors, especially interest rate, yield curves, and consumer demand. But I don't think any of your listeners would be surprised to see that trend continue.

Stewart: Man, what a fire hose of information. Fantastic. This is this part of the podcast called get to know Bill Pieroni. So we have two questions in this segment.

Bill: Stewart, you didn't warn me about this.

Stewart: No, no, no. This is-

Bill: So for the listeners, whatever I say here now, I had no time to even think about it.

Stewart: That's right. No, this is straight cold. Don't feel bad, Bill. Nobody gets to hear any prep on these. It's a three-day weekend. And I can assure you with certainty that nothing is going to catch on fire at the office. What's on your agenda?

Bill: Oh, that's easy. So I work out a lot. So I'll work out. I'm Italian American. So one of those nights will be homemade pizza dough, which I'll make in the morning, and let it rise slow and cold, which is a real good trick. Everybody wants to put it in the oven, keep it warm, hot. No, no. Let it rise slow so that it has time to ferment and develop real flavor. So that'll be one of those nights. The next one will be, I like going out. I'm fortunate. I live the New York area, but not New York City where I can go for long walks in the forest. We have mountains here. So that definitely would involve that.

Bill: And then being Italian, in addition to the carbohydrate that I got from pizza, it would involve a homemade pasta or lasagna, right? And I don't know that I need a three-day weekend. That's probably every one of my weekends. But I'm kind of easy to predict what I'll be doing Friday. In fact, if I don't make pizza on Fridays, the family's like, "What's wrong?" I didn't have time. I had phone calls. They're like, "Well, what?" There's withdrawal for it. So that's a fairly constant thing. And working out. But I have to work out because I'm eating all those carbohydrates. Which I don't want to do-

Stewart: You're eating all the pizza.

Bill: ... but I have to. I have to.

Stewart: This is perfect. You got me. I'm hooked. I want a Bill Pieroni pizza as well. So, second question, here it is. It's your college graduation day from your undergraduate institution. And despite what may have happened the night before, you are bright eyed and bushy tailed, and looking very spiffy in your cap and gown. You wait patiently, and you wait for your name to be called. You climb the steps, walk across the stage. The crowd goes crazy. You go up. You get a handshake from the president. You get a quick photo op as they hand you your diploma. You walk down the stairs, and you run into Bill Pieroni today. What do you tell your 21 year old self?

Bill: Let me think hard about that one. I would say be more patient. It's going to work out. So the same kind of energy and enthusiasm you saw, at a younger age, it looks impetuous and you're rushing things, and you want it to happen very quickly. The advice would be it's going to work out. Relax, right? Stay aggressive, try hard, but you don't need to be so enthusiastic perhaps. It will just work out for you. Don't worry about it, right? So that's probably the advice I would give myself is it'll work out. So relax, take a deep breath, enjoy yourself a little bit. It's going to happen for you, right? So I think that would be the advice I would give myself.

Stewart: That is fantastic.

Bill: But you can only give that advice after it works out, right? It's always easy to look back on it. And then you say to yourself now, would it have worked out if I didn't try as hard along the way? Would you have gotten everything? So it's a bit of a conundrum here. If I went back in time and gave myself that advice, perhaps it wouldn't have worked out the way I wanted it to. But that's what I would have said.

Stewart: That is fantastic. Bill Pieroni, CEO of Acord. Thanks for being on.

Bill: Stewart, thank you for hosting us, and thank you for your listenership. It compelled us to do some analysis regarding that investment proposal that we had not done heretofore. And I learned a lot, and I hope your listeners did as well. And you can have us back anytime. Thank you for hosting Acord and for inviting me to speak today.

Stewart: My pleasure. Absolutely. You can find us on all the major podcast platforms. If you have ideas for podcasts, please email us at podcast@insuranceaum.com. My name is Stewart Foley, and this is the Insurance AUM Journal Podcast.