Being only the fourth person in 70 years to lead Amalgamated Life of White Plains, New York, David Walsh likes to characterize the company’s latest chapter as the end of the beginning.
What lies ahead, according to Walsh, is an age of geographic growth — one that should pose few hurdles so long as Amalgamated stays true to its mission as it expands its base. Or so Walsh explains.
Yet, that mission even today has a distinctly 20th-century ring to it when you consider one of the firm’s original trademarked taglines: “We are America’s labor insurance company.” It’s perhaps no surprise that Amalgamated Insurance was first established by the Amalgamated Clothing Workers of America as a means of garnering life insurance benefits for its members.
As the percentage of America’s workforce represented by union membership has dropped to low double digits, Amalgamated has been steadily broadening its focus.
“The focus has always been to provide services to middle-income workers. It started with the unions, but we’ve moved beyond that now, and it’s about blue-collar workers, gray-collar workers, office workers — all of Middle America,” says Walsh, who joined Amalgamated as CEO 5 years ago from SBLI USA Mutual Life Insurance. As an executive vice president at SBLI, Walsh was credited with helping to lead the expansion of the firm’s geographic reach from two states to 49 states — a feat that Walsh has repeated at Amalgamated, where the firm’s geographic reach has recently expanded from about half the states to all 50.
As Amalgamated has sought to reach out to working-class families nationwide, its expansion has required the firm to meet the compliance dictums of each of the states — an often burdensome accreditation process that has brought some additional costs.
“Essentially, your company is being vetted 50 times, plus the District of Columbia,” explains Walsh.
To his credit, Walsh set about optimizing the firm’s operations shortly after his arrival. Amalgamated would continue to grow organically as it reduced its employment rolls from roughly 700 to 565. At the same time, it invested $13 million in new computer systems and sought to enhance the firm’s ability to measure performance.
“We have now developed operational matrices that we believe are first-class for any company of any size,” says Walsh, who estimates that the Amalgamated Family of Companies will end its most recent fiscal year with $159 million in revenue, up from $147 million — an 8 percent jump.
“For us, that’s a big number,” says Walsh, referring to the firm’s annual revenues. “If we have this conversation 5 years from now, the company will be twice as big as it is now — and hopefully a little more.”
Of course, life insurance — although Amalgamated’s largest business — is only one of six operating companies under their umbrella. Today, the firm’s businesses tout such varied offerings as medical management services, computer systems outsourcing, and printing services.
According to Walsh, part of Amalgamated’s next chapter has involved asking the management of each of the operating companies to determine the type of business the company will be within a short-term horizon of 1 to 3 years and a medium-term one of 3 to 8 years.
For Amalgamated Life, this has meant growing its offerings beyond its traditional group life offerings and opening up new suites of products for individual policyholders.
“The people who buy our insurance are not looking for wealth transfer or tax avoidance. They’re buying insurance for the traditional reasons people buy it. They are buying it so that if Dad dies, Mom will be able to stay in house,” explains Walsh, who says that by sticking to its middle-class customer roots, the carrier has over time remained conservatively managed.
As we advance into the second half of 2013, there are growing indications that business sentiment is improving despite nagging unemployment numbers and a shortage of merger-minded CEOs.
Cindy Crotty, middle-market business watcher and head of KeyBank’s commercial banking segment, once more shared with Middle-Market Executive the findings of a KeyBank’s middle-market business sentiment survey, which reveals that merger-minded business leaders remain a minority in 2013. Download report here.