Derek Valdo, Acoma Pueblo, appointed CEO of AMERIND Risk Management Corporation just a year ago, says the not-for-profit, tribally owned insurance company is not only a business but has a higher mission—to improve housing across Indian country.
"We're not just an insurance company that wants to sell insurance policies, pay claims, operate the company and make some profits to pay our shareholders. Our shareholders are the tribes, so there's a constant effort and diligence to keep rates stable but also to improve housing conditions," says Valdo.
An example of how AMERIND Risk does business, Valdo explains that if a home has an obsolete roof, AMERIND Risk does not refuse to pay for the damaged roof because it's obsolete, but instead pays a portion of the claim to help replace the roof with a high-quality material and thus improve living conditions for the family by providing better protection from the elements and increased fire safety.
Valdo, 38, grew up in a HUD-assisted home in Acoma. His first job was for the Pueblo of Acoma Housing Authority where he spent two years reviewing the eligibility of applicants and three as development specialist. By the time he left he had brought in $6 million in new construction funding, enough to build 64 homes for his community. "That was my defining moment at Acoma and set my job pattern. My entire experience revolves around helping Indian people."
Valdo says that his father was a traditional person and his mother more Western. His mother encouraged him to go out and get an education; his father urged him to come back home and help his people. Valdo says he was able to go back home and help and then expand his activities to improve conditions for Indian people on a national scale at AMERIND Risk, where he started as director of safety services in 2000.
AMERIND Risk was created by the U.S. Housing and Urban Development Office in 1986 out of hard market conditions, says Valdo. HUD had saved $4 million to pay for three years of insurance for properties in Indian country. Commercial insurers said that because of the high risks on Indian reservations the insurance would cost $12 million for one year. HUD went to the National American Indian Housing Council and recommended the tribes self-insure. The more than 420 tribes with HUD-assisted housing agreed and thus AMERIND Risk was born, with the commitment to insure all HUD-assisted housing in Indian country.
"We cover fire, wind, hail, tornado, hurricane, falling aircraft, theft, vandalism, frozen pipes, gap flood, gap earthquake coverage, commercial liability, all of the typical commercial insurance coverages you'll see for a public housing entity," says Valdo. In order for an insurance company to succeed, he explains, it adds up what it needs to pay claims, operational costs, fees and profits to shareholders and uses that information to set rates. AMERIND Risk works on exactly the same principle, with the exception of the need to pay profits to shareholders.
"We have 26 years of data that show every year we're going to have $10 to $12 million to in fire claims, $5 to $6 million in wind and hail claims, about $1 million in liability and other smaller amounts," says Valdo. The company allocates how much each of its 420 member tribes needs to pay in premiums based on how much property each insures and on the replacement costs for housing in different parts of the country. By the end of 2013, AMERIND Risk will cover $9 billion worth of property (55,000 single-family homes and about 7,000 commercial structures) for a total in premiums of only $19 million, despite the risks that pertain because much of Indian country, which, says Valdo, is like a third-world nation, with very limited services and infrastructure.
AMERIND Risk insures houses at an average cost of $300 per $100,000 of value. The commercial rate for a home in Albuquerque would be almost twice that, says Valdo. Today, the company has business revenue and net assets in excess of $100 million and offers other products, including workman's compensation and homeowners and renters insurance.
AMERIND Risk exemplifies how tribes can collaborate to foster economic development in Indian country. "AMERIND Risk is a great model of tribes working together. We are the only multi-jurisdictional Section 17 corporation organized under the Indian Reorganization Act. What that means is that AMERIND Risk has over 420 tribes all agreeing that we're going to go into business together…. We're all pooling our money together to provide in times of need and accidents…. AMERIND Risk is that successful model of tribes pooling together, believing in themselves, insuring themselves," says Valdo.
"It's part of the empowerment and self-determination era that tribes are getting into these days, trusting themselves and putting Indian people in charge of their companies to take us on to the next level," he adds.
AMERIND Risk will hold its 27th Annual Conference & Trade Fair, September 24-26, in Anchorage, Alaska. Gary "Litefoot" Davis, president and CEO of the National Center for American Indian Enterprise Development, is the keynote speaker. Valdo says the conference is an opportunity for member tribes to review the company's annual report and to provide education to clients about insurance and risk. Register by August 30 for a discounted rate and a chance to win an iPad mini. More information: http://www.amerind-corp.org/index.php/2012-11-20-23-01-16/2013conference.