Unbeatable Combination

By merging a venerable insurer, a thriving asset manager, and a revitalized investment bank, Atlanta Life Financial Group has become the industry's latest powerhouse

Group this year’s Financial Services Company of the Year.

A RICH HISTORY

The roots of Atlanta Life stretch back to the antebellum South. Alonzo Franklin Herndon, who was born into slavery in 1858 on a Georgia plantation, founded Atlanta Mutual (which later became Atlanta Life) in 1905 with $140. Over the years, Atlanta Life, with a business model consisting of selling insurance policies primarily to African Americans door-to-door, would grow and make Herndon one of the richest men in the city. By 1915, the company Herndon founded had more than $1 million of insurance in force.

The company would continue to show phenomenal growth through much of the 20th century. In fact, legendary businessman Jesse Hill Jr. ran the company in the 1970s and 1980s, growing the firm’s assets, in part, through the acquisition of smaller African American-owned insurers. Because of Hill’s prowess and the institution’s continued success, Atlanta Life was named BE Insurance Company of the Year in 1982 and 1988.

However, by the turn of the 21st century, black insurers that used the door-to-door retail business model couldn’t effectively compete in the rapidly changing financial services industry. “The distribution system and the products were such that once large majority companies introduced group policies where they were giving them the benefits [at the workplace], there wasn’t a need to buy [individual policies],” says Leonard P. Grimes, vice president of group and reinsurance for Atlanta Life. “What happened to the African American insurance industry is simply this: They never progressed.”

Atlanta Life needed to get into a new line of business, and what made sense was transitioning away from retail sales to becoming a corporate institutional player. “What we were able to do was reinvent ourselves to get as quickly as we could into that space. Acting as a reinsurer versus a marketer of the product, we’ve been able to capture that space,” says Grimes. “So we remained one of the viable insurance companies in the corporate space.” Today, Atlanta Life is the nation’s third-largest black-owned insurer with assets of $75.6 million.

The move helped keep the company viable, but in order to really grow, it needed new lines of business. When Brown became the company’s president and CEO in 2004, Atlanta Life got an executive that could bring the company into the next century and who understood the ever-shifting business landscape. After all, he not only had international businesses experience but he had a track record of building strong executive teams and increasing profitability. The Morehouse graduate even made a lot of money taking Synavant Inc., a provider of customer-relationship management solutions and interactive marketing programs, public.

At that time, Atlanta Life had two businesses: group reinsurance and asset management. Within four years, Brown would add a third. However, he first had to strengthen the core businesses.

THE PUSH TO DIVERSIFY
Because of the shifting dynamics of the insurance business, the senior management team realized that if the company was going to thrive, it needed to diversify. Why not plant a flag in the asset management arena?

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