The Fight Of Their Lives

B.E. financial services firms were locked in mortal combat with tough competitors and a bruising

viable contenders in a maturing and consolidating industry, many black-owned life insurers managed to retain individual and institutional clients as they sought new revenue sources. For instance, North Carolina Mutual Life Insurance Co. (No. 1 on the BE INSURANCE COMPANIES list with $212.37 million in total assets) shifted its focus to the institutional side of its business. CEO Bert Collins says the insurer added about 200 new group accounts, bringing the total to about 800. The Durham, North Carolina-based carrier also added about $17 million in revenue from its group dental plan business, with about $13 million coming from its coverage of state employees. Premium income last year totaled roughly $100 million, up from $70 million in 2001. “We decided to shift more to group insurance because we can grow it faster than selling individual life insurance, just from the sheer size of deals we can get from employers,” Collins says. His goal: Expand North Carolina’s revenues to $200 million by 2006, making it one of the nation’s 150 largest life insurers. It now ranks 450th.

For Birmingham, Alabama-based Booker T. Washington Insurance Co. (No. 4 on the BE INSURANCE COMPANIES list with $54.86 million in assets), 2002 was a year of transition. The company’s CEO, Walter Howlett Jr., launched an aggressive five-year plan to boost assets to about $100 million. First, the company hired a new marketing officer to help increase sales. Then, it expanded into Brownsville, Tennessee, through the acquisition of Golden Circle Life Insurance Co., picking up another $8.5 million in assets and 15,000 policyholders.

Booker T. had a 5% gain in premium income — the first increase in five years — but it also experienced profit losses for two consecutive years, the loss in 2002 was 2% greater than 2001. To spur future growth, Howlett will continue to embrace a philosophy of staying focused on the basics. “A lot of insurers have expanded into investment products like mutual funds,” he says, “but those margins can be very thin unless you have huge volume.”

RAISING CAPITAL IN A BRUTAL MARKET
One of the trickiest arenas has been the equity and bond markets. For several institutions, whether an investment bank or a private equity firm, those markets posed myriad challenges — and some surprising opportunities — last year. For example, one perennial, M.R. Beal & Co. (No. 5 on the BE INVESTMENT BANKS list with $2.65 billion in senior/co-senior managed issues) was one of the firms that felt the impact of the economy’s hard canvas-kissing blows. On the other hand, despite market conditions and the recession, The Williams Capital Group (No. 2 on the BE INVESTMENT BANKS list with $78.54 billion in senior/co-senior managed issues) realized a 20% firmwide revenue growth with a 55% rise in equity business, while its fixed-income unit rose 45%.

Christopher Williams, the company’s CEO, says the firm used the additional cash flow to add two salespeople to its equity unit and three more on the fixed-income side, allowing the firm to be more flexible. It also launched a money market mutual

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