Derek Valdo believes a dynamic understanding of tribal sovereignty is what sets apart the company he’s led for nine years from other insurance businesses.
“AMERIND is unique in the sense that we were created by tribes for tribes,” the CEO of the 35-year-old mutual insurance company says.
Established in 1986 during a crisis in the insurance marketplace, Santa Ana Pueblo-based AMERIND now serves over 430 tribes insuring more than 40,000 single family dwelling units, $17 billion in property and 200 tribal governments, according to Valdo. Some 54% of the company’s staff are tribal members.
Valdo, an Acoma Pueblo member who became the company’s first Native CEO in 2012, says AMERIND insures some of the most vulnerable communities in the United States. Because they often lack infrastructure like nearby fire departments or city-controlled water, many tribal communities are considered high risk by the insurance industry.
“I’d say in 70% of our communities, we’re the market of last resort,” Valdo says. “… Sometimes the only game in town for many communities.”
Yet economies of scale, tax-exempt status and a focus on protection over profit enables AMERIND to offer policies that cost less, on average, than their competitors, he says.
As a Section 17 corporation, AMERIND has tax-exempt status and so does not have that cost to pass onto clients.
In addition, the board stipulates that products cannot be priced more than 5% over what they cost AMERIND. While that makes growing the company’s surplus tough, Valdo says, the low-profit margin does keep product costs down.
“It’s not pure capitalism in the sense of making money for a family or for an individual,” Valdo says. “But it’s really building sustainability, being accountable, providing a product and service that our tribal communities need at an affordable price.”
What are some of the challenges that AMERIND has faced in its history?
“I think our initial challenges were insuring tribal communities that don’t have infrastructure: paved roads, running water, fire hydrants. Those really were our challenges in the early years. The most recent challenge was our AM Best rating. As tribes really become bigger and have loans and borrow money — we couldn’t insure tribes that had a loan with the bank, because we weren’t rated by AM Best ratings agency. … Thankfully, with the strength of our financial statements and operating performance, we’re able to achieve an A- rating (in 2020) which is pretty good. … And the challenge is just growing fast enough to meet the needs and wants of our tribal communities.”
Why do you think AMERIND’s been able to overcome those challenges? What’s allowed the company to do that?
“We’ve been operating in Indian Country for 35 years. We have economies of scale, where we have 35 years experience, and we know where the losses occur. We know which communities have a higher or lower probability of experiencing a loss. So I think that’s been one of the opportunities for us. And, you know, we’re able to group over 400 tribes that are standing together. There’s strength in numbers, and we are succeeding because of that common vision and that common purpose. And I think that’s rare in today’s world in the sense of getting people from vast cultural backgrounds to really stick together and continue to work together. Then again, when I think about Indian Country, you know, tribal people are still here, despite a few hundred years of different ways to be incorporated into the greater society of American culture. We’ve been able to persevere and thrive and prosper.”
Why are people going to want to work at AMERIND?
“I think our culture of family and togetherness is one of the biggest keys there. Once you’re in the family it’s just that family culture. We invest in our employees. They’re our greatest resources and our biggest asset. So people that want to come work in community, in an entity that looks to provide service, customer service, effective products and do the right thing in many cases. You know, we would want people and we hope that appeals to people wanting to start careers and shake the mantra of insurance companies being bad entities. I think, at least at AMERIND, we look for ways to pay for claims versus deny claims, because again, when your owners are your policyholders it’s a little bit different. … I think that appeals to a lot of people.”
Tell me more about professional development at AMERIND.
“Basically, we’re looking at trying to improve their knowledge, skills and abilities for the positions that people perform at AMERIND. We also have a higher educational support that we’ll pay up to $5,000 per year for a bachelor’s degree, $7,500 for a master’s or higher degree for employees. We created an endowment at (University of New Mexico) for any child or spouse of an AMERIND employee so that if they want to go to UNM, we have some support for them there.”
Has the vision and the mission of AMERIND changed since its inception 35 years ago?
“Tribes have evolved since 1986 and we’ve expanded our service model. Again, in the beginning our target was primarily low income housing for tribal communities. And we’ve expanded to pretty much cover every facet of the tribe. But I don’t believe the vision or the mission has changed. Again, we’re created for tribes. Our tagline is ‘tribes protecting tribes’ and ‘protecting our people.’”
When you consider AMERIND’s 35-year history, what are you proud of?
“I’m proud that AMERIND is able to provide an affordable, effective, sustainable and efficient insurance product for some of the most vulnerable communities in the United States and do it responsibly and ethically. And it wouldn’t have been possible without the makeup of AMERIND — really aligning the board, aligning the staff, aligning with our clients and our customers.”
Business Outlook’s In-Depth item features interviews with leaders of well-established New Mexico businesses about the practices that have allowed them to weather ups and downs. Send suggestions of locally owned businesses that have been in existence for at least a decade and that employ at least 20 people to firstname.lastname@example.org for consideration.