Newspapers / The Charlotte Post (Charlotte, … / Nov. 21, 1985, edition 1 / Page 26
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By David Smallwood Special T* The Past There is a law of nature L; that says, “If you do something good for some one, not for selfish motives, but just for the sake of doing good, you will be amply rewiurded.” The North Carolina Mutual Life Insurance Company in Durham, North GaroHnn, is proof of that. Now in its ssth year. North Carolina Mutual 5-j (NCM) is the nation’s largest black-owned finan cial institution ahd self proclaimed largest biaqfr owned business jn the world. Attesting to its posi tion, the company does not compete with other black insurance companies, but rather with white compan ies in its size range and, in fact, occasionally steers some of its business to other black insurance firms. In terms of sire, at year end 1982. NCM reported $80.5 million in income, $7 billion worth of insurance in force and more than $800 million in assets. By com parison, the second largest black imnnw company, Atlanta Life, had 1983 ’ assets of $114 million and $1.7 billion of insurance in force and the nation’s largest insurance com pany, Prudential, had $86.7 billion in assets and $4B billion of insurance in force in 1981 North Caro lina Mutual ranks among the top 10 percent of the estimated 1,900 insurance companies in America, roughly in the 139th spot. Staffed by 285 employees in its hilly nompidorisod home office in Durham and an additional 1,300 em ployees in its 40 district and 32 brand) offices in 13 states, mostly throughout the South and the District of Columbia <thoi«h NCM is licensed to seO insur ance in a total of 33 states), me company has nearly 960,000 policyhold ers. Since its founding the company has paid policy holders more than $400 million, including more than $40 billion in divi dends in the last « years, even though the company almost vent out of busi ness trying to pay its vary first claim of only $40.— )yr North Carolina Mutual today has two Washington, D C-based insurance sub sidiaries, American Capital Life Insurance 'Com pany and American Citi zens life, and a third subsidiary, NCM Life Communication!, that handles its growing invest ment portfolio in the communications field. The current star of the company was prooaoiy not even dreamed of by the original founders. Or ganized in October lM as a benevolent aid associa tion for blacks, the com pany began operations in 1889 under the name The North Carolina Ifutnakand Provident Association, a ization. •••n The company was found ed by a group of seven men -Dr. James E. Shepard, W. G. Pearson, P.W. Dawgtns, T.D. Watson, E_A. Jofanaon and the two primary founders, Dr. Aaron McDuffie Moore and John Merrick, who were the guiding lights./Moore was Durham’s first Mack physician and Merrick was an entrepreneur - he ope rated a barber Maptior whites - with a very close relationship to the Wash ington Duke family *ho were in control at the American Tobacco tym pany. Both Moore and Merrick were very weal thy and steeped in the tradition at racial seif help and uplift, a philoso phy espoused by the black leader of the day, Booker In the ltfes. it was common among Durham’s black community to eoltoct money at funerals to help the surviving family through the following period of adjustment. Moore and Merrick were especially Instnawital in -J4,^ . t ' these efforts and soon realized that there ought to be a mare systematic way of helping these people pro vide for themselves. Thus, the seed of the idea for an insurance company was spawned. Very simply, Moore and Merrick founded NCM for altruistic reasons; they were, not after seif-gain. According to current North Carolina Mutual Board Chairman William J. Kennedy III. "They were particularly interested in helping black people in the Durham community. They tried to provide a service for black people that was unarilabie to them when the company started. It spreaa uirougnout Nortgv Carolina into Virginia and Georgia and I guess they never really had an idea that the company weald grow ae large ae It hae." VOMMOlIu ivcnneay explains mat the philosophy at NCM tea % i l % M rich in the growth at the com pany through their stock. But we are a mutual, owned by the policyhold ers. and management has always felt that fiduciary responsibility to do the job to build the company for the benefit of the policy holders. We’re at the point now where we can compete salary wise for personnel and that’s good enough. We’re not too rwn—rwfi about making a whole let of money for the manage ment of the company. That has been pervasive in our organization and we have followed the lead of our founders." Kennedy says the com pany has made efforts to recruit white agents, tad they stay for a short while and leave. Currently, r.. ..■■■■•■ '. . LJ - ■■ - . ."n '■ tibitrod l j fNow h ' -Sherry', Speciak CURLS <40 PERMS 199 fcw*adf A FREE CUT! Call Sherry or Just Stop In HHEESr, * _ 1 ° A Uwe Affair With Your Hair" 1 whites in the borne office, there is only one white manager among the field employees. In addi ■ ' tion, only ooa percent of the company's Individual poli cy business is white, and that, Kennedy is due more to the mentality of the company's agents Miy the faet that whites don’t want Is be for a dif ficult time trying to en courage them to go after that bueinees and think of it as normal, but we ara try ing to expand their minds to that point* - : In addition to concentrat ing on those areas for future growth, NCM will also continue to heavily ' ..invest in the commuxdca ■ boos field, Kennedy, says. The company owns two cable tdevtadod installa tions in Sooth Carolina worth $1.5 million and has licenses pending for two additional one*. Kennedy -says NCM will continue to expand in cable as rapidly as it can acquire desir able franchises. The com pany also owns an AM and FM radio station in Wil liamsburg, Virginia, which Kennedy expects to pro vide the company with a 30 percent return an its in vestment as opposed to the roughly 12 percent NCM gets on its bond portfolios. The ultimate goal is for NCM to diversify its invest ments for a better return. - *. ; •* /• Traditionally the company has Invested heavily in go vernment and industrial hoods, some stocks (par ticularly utilities), a bit of real estate mortgages, and some CD’s and commercial shortterm investments that have yielded as high as 21 percent interest, but generally NCM’s return on . its investments has been below the industry average of seven percent; hence, the move towards more variety in investments such as the communica tions properties and pen sion Amds. Last year the company had a net invest ment income of $12.7 mil lion and a net yield be fore taxes of 7.5 percent meaning the new invest ment direction is begin ning to pay off. In fact, under the total course that Kennedy has charted for North Carolina Mutual, the (beam of two wealthy blacks to help their less wefl off brethren seems destined to grow longer and stronger into perpetuity And that’s a nice return on investment. We Keep You , POSTed < [Call 376-0496 I! ’ For Four Subseriptio I Today! ;; }»>«>»»»♦"
The Charlotte Post (Charlotte, N.C.)
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Nov. 21, 1985, edition 1
26
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