April 20--COLUMBIA, SC In 1930, Tallulah Fluker posed for a photo with the family cow. A decade later, Fluker would be the top-selling agent for Colonial Life & Accident Insurance Co. in Columbia.
Fluker's photo -- housed at the modern-day Colonial Life headquarters off Interstate 126 near Columbia -- goes a long way in conveying how the multimillion dollar company got its start.
Founded in April 1939 by a couple of unlikely candidates, the company's first sales team was an all-female sales force -- a team of Columbia-area housewives getting their start during the Great Depression.
"We're celebrating our 75 years with a reinforcement of our basic, grand message," said Randy Horn, Colonial Life president and CEO. "To help America's workers strengthen their financial safety nets and to counsel them on their benefit needs and make sure they understand what their benefit package is made up of -- where there may be gaps.
"The average worker in America doesn't have a financial counselor, a financial adviser," Horn said. "Our folks are out in the worksite, in the workforce everyday, helping them make benefit selections that will be ideal for themselves and their families."
The company was started by two men, Edwin Averyt and Clifton Judy, in 1937 as Mutual Accident Co. and became Colonial Life two years later in 1939, in the latter stages of the worst financial catastrophe in the history of the United States and just ahead of World War II.
Maybe even more remarkably, the men started the company without either of them ever having sold so much as a single insurance policy -- and grew it into a national powerhouse.
At the end of 2012, Colonial Life & Accident Insurance Co. had annual sales of more than $361 million, its corporate records show, with $1.3 billion of premiums in force.
Closer to home, Colonial Life has a $100 million annual economic impact in South Carolina and the Midlands, statistics show, and approximately 1,000 local employees combine with the corporation to produce $2 million in charitable giving each year.
Further, in 1989, Averyt, who served as Colonial Life's president and chairman of the board until he retired, was inducted into the South Carolina Business Hall of Fame. Judy, who served as Colonial Life's vice president and treasurer, had a long tenure with the company.
And in 1998, Gayle Averyt, who succeeded his father at Colonial Life, was also inducted into the South Carolina Business Hall of Fame.
"The Averyt family knows the insurance business inside out," said Ernie Csiszar, a University of South Carolina finance professor who teaches insurance at the Moore School of Business. "In terms of business acumen, very few could match them."
Judy and the elder Averyt hired that first female sales force in the '30s because they felt women could relate to the struggles of others, according to company history.
It was also important for the sales force to be able to talk to prospective customers about the need to protect their financial gains, the company said: the first product Colonial Life sold was accidental death coverage.
"We have a long history of helping America's workers protect the vitally important things they've worked so hard to build," Horn said.
Colonial Life today specializes in group and individual coverage plans for medical, which includes hospital stays and accident insurance; income protection, or disability; catastrophic illness, such as cancer insurance and critical care insurance, and survivor benefits, which includes universal life insurance coverage with long-term care benefits, and whole life and term life insurance coverage.
Despite its unlikely start, the company has constantly innovated cutting-edge changes in the insurance industry, many of which have become standard-place practices in the U.S. workforce:
--In the 1950s, Colonial Life pioneered payroll deduction as a means of paying for benefits at the worksite.
--In the 1970s, the company was among the earliest implementers of computer technology.
--In the 1980s, agents started marketing products through a flexible benefit plan and introduced electronic enrollment capabilities nationwide.
--In 2000, the company created its online enrollment system.
Colonial Life's impact on the community also has been significant. The company is completing a Habitat for Humanity home building project as part of its 75th anniversary celebration and donated $7,500 to the S.C. Center for Fathers and Families. The company has been a pioneer member of the South Carolina Chamber of Commerce since 1941, or 72 consecutive years, and in 2003 purchased the partnership naming rights in the Colonial Life Arena at USC.
Colonial Life merged with Chattanooga, Tenn.-based Unum Provident in 1993, but Csiszar, who served as South Carolina Director of Insurance for six years, said Colonial Life's brand has been so strong and profitable for so long, it has been unscathed by Unum's acquisition.
"They have had a unique set of products, for a long time," Csiszar said. "They occupied a (relatively small, but growing) market niche that really no one else was."
Because the Averyts kept Colonial Life focused on the mid-level insurance market, Csiszar said, that allowed the company to develop strong relationships with brokers, agents and companies over time.
The result, said Csiszar, who also led the Seibels Bruce Group turnaround as its president and CEO from 1993 to 1998, is tremendous loyalty. "That loyalty is absolutely priceless," he said.
One of the challenges Colonial Life may face going forward is increased competition for its market niche. Insurance industry leader Aflac, AIG and others may go more aggressively after the insurance product lineup Colonial Life relies on, some experts say.
But Horn says the pioneering spirit is still alive at Colonial Life.
Company leaders are "very proud of our history and accomplishments, but also very excited about the future," Horn said.
The company founders "put a sales force together that really is in the same form today as the way they constructed it: it was an independent-based sales force -- tremendously loyal to Colonial Life -- but they're independent in nature, which gives them unlimited opportunities out in the marketplace."
The biggest challenge Colonial Life may face though, is the very same challenge every other insurance company faces: how to demonstrate the value of insurance to those who don't have it, or think they cannot afford it.
A 2013 Colonial Life survey found people were more likely to spend extra money on a new electronic device than on insurance. The survey, completed in September asked respondents if they were given an extra $200 right then, how would they spend it? Most said they would pay off debt or save it. Just 3 percent said they would buy an insurance policy.
Insurance industry statistics show about 100 million Americans have no private disability insurance, only 49 percent have short-term disability and 44 percent have long-term disability coverage.
Life insurance coverage is missing to 41 percent of U.S. adults, or 93 million people, the figures show, while 43 percent of those who have the coverage say they don't have enough.
"And that's what really all our products are meant to do," Horn said, "is to help provide a financial safety net for those folk. What hasn't changed is that so many people don't think about it until it's too late."
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