By Jeremy Engdahl-Johnson
Jake Mitchell decided it was time to take the claim upstairs to management. He’d only been on the Ample Hills Insurance executive floor a handful of times in his long career, so he was surprised when he was granted immediate entrance, and even more surprised when he saw the CEO, chairman, and corporate counsel huddled like wary cats in an alley. He decided to cut to the chase.
“I’m not sure how or why, but it appears we have a claim on the Coney Island Elephant Hotel, which burned down in 1896.”
They stared at him like he was crazy—and then the CEO opened his mouth and Jake realized he was the only sane one there.
“We believe that Blue Marble has mounted some kind of … attack against us. This claimant … this … Ms. Page … is their agent.”
“She seemed perfectly lovely and sincere.”
The corporate counsel stepped forward.
“We need your help, Mr. Mitchell. But we need you to sign this first.”
Jake leafed through five pages of nondisclosure, noting the prominence of “The Elephant Hotel Claim” throughout the document.
“I signed a confidentiality agreement when I joined the company 25 years ago,” he said. “My discretion has never been in question before.”
“This is exclusive to this claim,” said the corporate counsel.
Jake had long believed in the adage agree to everything, sign nothing. But he was too curious not to move forward. So he signed.
“What’s so secret about this claim?”
The three executives shared knowing glances.
“We believe that Blue Marble has developed a time machine,” said the CEO.
The actuary-turned-claims-ninja didn’t know what to say.
“This is the third—and certainly most audacious—such attack.”
“Excuse me, sir. Backing up. Did you say ‘time machine’?”
“It boggles the mind, but yes. They are bringing back claimants from the past to file against us in the present.”
“It’s kind of like in Terminator,” said the chairman.
Jake chewed on this for a minute and eventually had to say something.
“In Terminator, the agents are from the future,” Jake said.
“It’s the opposite of Terminator,” said the CEO. “But it’s no less vicious.”
Jake was very good at keeping a straight face, even when thinking of Arnold Schwarzenegger traveling from the future to file fire insurance claims.
“I didn’t realize time travel was possible,” Jake said.
“We didn’t either. You can be sure that, going forward, we’ll have exclusions for time travel in all of our policies.”
“Too bad we didn’t invent time travel,” Jake said. “We could go back and add the exclusions retrospectively.”
“This is not a time for jokes, Mr. Mitchell,” said the corporate counsel. “This Page woman is potentially dangerous.”
“With all due respect, sir. Molly Page didn’t seem dangerous. Quite nice, actually.”
“She may be without menace, but her claim is a big problem for this company. And that’s why we need your help. We want the present value of this one to be small.”
And here it was. The rub.
“I’ll need to make any number actuarially sound, sir.”
“Make it as sound as you can, but be realistic about the assumptions.”
“Certain things I can moderate,” Jake said. “I don’t see why she should get an inflationary adjustment if she’s from the 1880s. But the market value—”
“That’s the kind of thinking we can’t have,” said the chairman. “You don’t negotiate with the T-1000.”
Jake saw it was time to go.
“Rest assured I will do my best work, sir.”
* * *
Jake was 17 days from retirement when Molly Page first walked into his office. He knew he was in trouble from the moment he first saw her. It wasn’t that she portended anything for him in particular—beautiful women seldom had anything to do with him—but she was the kind of girl who wouldn’t be seen in a place like this unless it was important. And Jake was on the glide path away from important things.
“May I help you, ma’am?” He’d always been courteous. He had the kind of pseudo-private office, deep inside an insurance company, that was seldom visited, and gave him more time to himself than one could want. Courtesy came easy when presented with the rare guest.
“I understand you deal in the long tail.” She said it quickly, as if used to saying such a thing, when in fact Jake was sure it had been rehearsed/planted. Regardless, he liked her. She seemed unusually polite, but somehow out of place. He had the impression everything she wore had been bought off the racks of Target within the past hour.
“I work on complicated claims. How might I help you?”
“Well, I was the owner of the Coney Elephant Company, and my hotel burned down. Fortunately I have a policy.” She handed him an anachronism of a document. It looked to be from long ago, but the paper was crisp and felt new to the touch.
“That fire was more than a hundred years ago.”
“I don’t believe the policy has an expiry as long as I’m the claimant. I paid quite a bit for the best insurance I could get.”
“You said you were the owner? You’ve … actually been inside the hotel?”
“I lived there until the night it burned down.”
Jake took his glasses off and looked at her for a while. Despite her new attire, her face had an antiquity to it. But clearly this woman wasn’t born in the 1800s.
“Can you prove you’re the Molly Page? I don’t doubt it, but the company will need proof.”
She presented Jake with a yellowed birth certificate.
“There’s my identification.”
Jake read it, read it again. Molly Page. Born in 1867.
“Is Bonaventure Page your father?”
“Correct. He built the Elephantine Colossus and willed it to me in 1886.”
“That’s … incredible.”
Jake wasn’t really sure what else to say at this point.
“How long have you been a claims adjuster?” she said.
Jake took off his glasses.
“I’m an actuary.”
“What are you doing down here, then?”
“How do you even know what an actuary is?”
“Because I was married to one. Until I almost died of boredom.”
“That’s better than most actuary jokes. If you must know, I’m here for two reasons. One, they no longer knew what to do with me and I wasn’t ready to retire. And two, I’m the best at figuring out what things are worth long after they stopped being worth anything.”
“Does that mean you do the math to show my claim on the Elephant Hotel is worthless?” She slumped down in the extra chair he had on hand for the rare visitor.
“If you actually have a claim to the Elephant Hotel, then it’s probably worth a pretty penny. But that’s a tricky ‘if.’ Wasn’t it arson?”
“The policy included a provision for arson. Fear of arson was the whole reason I bought insurance. Once it became a brothel it was a target of all kinds of anger. I’m glad my father never had to see the end of it. He was so thrilled by its completion.”
“When did he die?”
“Not long after it became a wonder of the world. Long enough to see his elephant looming over the skyline as you entered New York Harbor. It was a beacon to all.”
“Why would someone want to burn such a thing down?”
“Why does anyone destroy something beautiful?”
* * *
Throughout his career Jake was best known as an expert in present value. He understood the value of future liabilities better than anyone. But as he got older, he became less enthusiastic about making projections decades into the future. There was something depressing about looking over a horizon to a time you’ll never know yourself. When it came time to be put out to pasture, he chose claims, turning his expertise upside down and looking backward.
He tried to research the Elephant Hotel online but soon realized he needed original sources. He found himself camped out at the New York Public Library’s microfilm room, poring over old copies of the Times and other local rags.
The Elephant Hotel had a short but colorful history. A cousin to Lucy the Elephant. A novelty hotel where guests could stay in the elephant’s belly or head or behind. A museum within the elephant’s left lung. The Howdah on the elephant’s back, with a view for 50 miles. Later, after various financial difficulties, the elephant would become a freak show brothel. The concept was cursed with financial problems, so it was hard to say it was a valuable business. But it had cost $200,000 to build in 1880s money and clearly would have appreciated through the years. In present value, the Elephant Hotel would probably be one of the most famous structures in New York if it still stood.
* * *
The day after meeting with the Ample Hills executives, Jake took the Q train to Coney Island. It was a long ride, so he had time to do some calculations. He’d originally priced the Elephant Hotel Claim at $250,000 at the time of the fire, with a 5 percent interest rate, which led to an $87 million (before taxes) in present value when you included both 120 years’ worth of interest and similar inflation. In revising his estimate, he removed inflationary adjustments, as he’d promised the executives he would do. But that still left him at $75 million. And the value of the Elephant today would be an order of magnitude higher, had it still existed. The Elephant was a unique tourist attraction that could generate significant revenue, and even though Coney Island was decrepit, there had been various $90 million real estate deals on adjacent properties. A development conglomerate was now talking about building Bellagio-style properties in Coney—call it the Vegasification of Coney Island. And then there was the fact that the Elephant Hotel would, in present times, have been the oldest attraction at Coney Island.
The train pulled into the Coney Island subway station—the end of the line. He didn’t have far to go. The station exits onto Surf Avenue, diagonal from the Nathan’s Famous where they host the hot-dog eating competition. It was only a block from there to the former site of the Elephant Hotel, and the lot was still a decrepit corner after 120 years. But it was in the middle of the whole Coney Island experience, a few hundred yards from the Wonder Wheel and the boardwalk. Jake wondered if he’d underpriced the claim. Had it endured, the Elephant Hotel would have been more Coney Island than the famed Wonder Wheel. In this alternate present, maybe the end of the cult classic “Warriors” plays out under the Elephant instead of under the boardwalk. As he walked down toward the beach, he decided to hold to his number. He couldn’t give Molly Page the full present value of the Elephant as if it existed today, but he also couldn’t lower his number any further and call it sound. His employer was getting a good deal given its obligations and the realities of the claim.
As he stood on the corner contemplating all this, Molly Page materialized out of the Coney Island funk.
She wore pink leggings and a fairly terrible dress. Still shopping at Target.
“What a surprise. Are you staying near here?”
“There’s a miserable hotel down the street. But I wanted to be close to here.”
“Well, I never come here. Just today. So this is quite the coincidence.”
“What are you going to do with my claim?”
“I’m going to do my best.”
She seemed satisfied. She believed in him for some reason.
“Are you really a time traveler?”
She smiled: Knowing. Not knowing.
“I only learned that phrase the other day.”
“You seem like you’re from another era. Or maybe from Long Island.”
“Is that a compliment?”
“Of course. So how did it happen? The night you … came here.”
“Is there somewhere we can go to talk?”
“Would you like to go get a hot dog?”
“I suppose. You know they started selling those things around here right before we built the Elephant.”
“Right. They’ve only gotten better since then.” Jake offered the crook of his elbow and Molly Page took it. He led her back toward Nathan’s Famous, where he found himself ordering for her. He had to show her how to use the ketchup and mustard. As they sat down at a picnic table outside she examined the bright yellow garnish with great skepticism.
“Why do you put this on it?”
“It’s good. Try it.”
He hefted his hot dog and showed her how it was done. She still wasn’t quite buying it but finally took a small bite. He watched her chew.
She swallowed before responding.
“Not bad. Maybe I should have tried them back in 1896.”
“They have a contest here. People eat a bunch of these as fast as they can.”
She didn’t seem impressed so he changed the subject.
“So … tell me about your last night at the Elephant Hotel.”
She took the opportunity for a big bite, seeking a delay in answering.
“Did you know that the Elephant became a brothel?”
“I … heard. So you were there for that?”
“I was the owner. Nothing happened there that I don’t know about.”
“Except for the fire?”
“I knew about the fire. Eventually it was going to happen.”
“So what happened that night?”
“A man in a gray suit came to see me.”
“A … client?”
“I don’t know his name. He said he was from the insurance company.”
“Well, he may have been. Or, more accurately, he was from another insurance company. Not mine.”
“I didn’t know that then.”
“So what did he say?”
“He said I was in danger and I needed to come with him if I wanted to maintain my policy.”
“What was happening at the hotel that night?”
“It was the same as ever. I’d rented out a few rooms to actual guests. A few more to … clients, as you put it.”
“Did you hire the girls?”
She bowed her head. This wasn’t a conversation she wanted to have.
“I felt guilty. I … let it happen. My father would have been so disappointed.”
Jake regretted his question. He didn’t need to know the brothel details to process her claim.
“How did the fire start?”
“I’m not sure. I only found out about it when I got here. But I saw the pictures.”
She started to tear up. Jake didn’t really know what to do so he improvised, which wasn’t his specialty.
“Do you know what a corndog is?” Her face registered confusion. But he was already in motion. “I’ll be right back with two corndogs.”
* * *
On Monday, Jake emailed the revised report and asked when the executives would like to meet. They set up something for early that afternoon. This time they made him wait outside the corner office for a few minutes. It felt like a tactic. Jake had a pretty good idea how this was going to go. But he had to see it through.
The CEO led the meeting and did all the talking.
“We’ve reviewed your analysis and we simply can’t accept it. There is no way we are paying Molly Page $75 million.”
“With all due respect, it’s a bargain for us. If the Elephant Hotel had burned down yesterday we’d owe hundreds of millions.”
“But it didn’t burn down yesterday.”
“No, it burned down in 1896, so we owe on that claim plus interest.”
“We’re inclined to not honor the claim.”
“Well, that’s up to you guys. I just work here.”
The executives conferred and then the CEO spelled out Jake’s fate: “We appreciate your integrity on this. We’re ready to give you five years of your current salary on top of your retirement benefits if you agree to retire today. We hope you will give it some thought.”
He did. He agreed. He knew a losing hand when he saw it.
* * *
Jake focused on packing up his office. He wasn’t exactly surprised when Molly Page came by: He’d been both waiting for her and, at the same time, hoping she didn’t bother. But here she was.
“Are you moving?”
“Retiring,” he said, gesturing to the HR-supplied cardboard box.
“I’m sorry you won’t see the end of my claim.”
She seemed to mean it. She was wearing the same pink leggings he’d seen her in at Coney Island.
“That makes two of us.”
His report on the Elephant Hotel Claim lay flat as the top item of his box. Jake curled it into a scroll and held it in his left hand. With his right hand he hoisted the cardboard box.
“Walk me out?” he said.
She went first and he followed, waiving the scroll like a baton as they boarded the elevator.
“Do you know who burned it down?” he said.
“That’s what you want to talk about?”
She pondered it for a bit.
“The Elephant fell into disrepute. There were so many who meant us ill. I have my suspicions.”
“Angry neighbors. They thought we were bringing the neighborhood down.”
“If only they could see it these days. They would have built a second elephant.”
Molly seemed to like this. The elevator opened on the ground floor. Jake and Molly proceeded out into the daylight.
“What are you going to do now?” he said.
“I’d like to go someplace brand-new.”
“I’m probably the wrong guy for that.”
“Whatever is new to you will surely be new for me.”
“Well let’s go, then.”
Jake deposited the scrolled report into his cardboard box. With his other arm he looped Molly Page by the elbow and set out for retirement.
Jeremy Engdahl-Johnson is director of media relations for Milliman Inc. He is based in New York.