N.C. Mutual president announces new vision [The Herald-Sun, Durham, N.C.]

March 29--DURHAM -- After trimming expenses and landing two consecutive years of profitability, Durham-based N.C. Mutual Life Insurance Co. is now looking to grow its profits, with a goal of earning $5 million in net income by 2015.

The president and CEO of N.C. Mutual, James H. Speed Jr., detailed a strategic plan for the company during its annual meeting on Wednesday that includes a proposal to offer debit cards for the unbanked, and the pursuit of further acquisitions.

The meeting was held at the company's headquarters on West Chapel Hill Street and drew more than 80 people, including descendents of the business' founders. The company was founded in 1888, and is billed as the nation's oldest and largest insurance company in the nation with roots in the black community.

In laying out the "Vision 2015" plan, Speed said N.C. Mutual is working toward earning a net income of $5 million, toward growing the company's assets to $500 million, and reaching a capital and surplus total of $30 million.

Last year, the company earned a net income of $626,534. That was down from the $789,560 in earnings the company saw in 2010, the first year the company had reported a profit since 2006, when the company sold its headquarters building to Greenfire Development.

Speed attributed the return to profitability to multiple initiatives, from acquisitions of a profitable business, to cost-cutting efforts. He said the company cut its general and administrative expenses by about $690,000 in 2011 from 2010 levels.

"I think 2010 and 2011 were great years -- they allowed us to stabilize the business, and get it to the point that it was profitable, and our focus is still to keep it at a profitable level, but also so we can grow it, grow it strategically in accordance with our 2015 (vision) that will allow us to increase our net income," Speed said.

The new profit target is "realistic," Speed said, because part the plan is creating new revenue sources. In addition to pursuing acquisitions, the company is also looking to grow the distribution channels through which it can sell its products, Speed said.

Last year in November, N.C. Mutual launched an independent agency of sales agents that can sell the company's policies, as well as the products of other companies.

"We don't have to incur the costs; we basically use our brand, and our people," Speed said. "That allows us to basically get fees, if you will, for selling those products."

The company is also looking to expand its reach into funeral home funding, providing money to those businesses to ensure they have a steady operating cash flow, Speed said. N.C. Mutual can then be assigned to collect from the insurance company covering the funeral expenses that it provides that funding to, he said.

"A lot of people who need insurance today, a lot of that is sold after the death of a loved one, and then they realize, 'what if that happens to me?' " Speed added. "The funeral (home) will have an (insurance) representative there that could sell that."

Another initiative Speed announced on Wednesday was one he said the company is "working on right now" -- a proposal to launch N.C. Mutual debit cards for people without checking or savings accounts as part of an effort to boost its financial service offerings. Speed said there is a "significant number" of minorities that are unbanked.

"(This would) allow those unbanked to have a vehicle so as to not use predatory lending, (they'd) have access where monies can be loaded onto their cards," Speed said, adding that the company could earn fees through the cards, and would also have an avenue through which to do automatic drafts for policy holders.

"It'll make it more efficient for our customers, current customers, that don't have (checking) accounts," he said.

Richard Moore, a member of N.C. Mutual's Board of Directors, a former candidate for governor and the state's former treasurer, said the company has regained "extremely sound footing in the marketplace."

"We're making money -- the company is back to profitability again," Moore said, adding that he believes the main driver of the company's return to profitability in recent years has been cost cutting efforts.

Willie T. Closs Jr., another member of the board and the former chief marketing officer for N.C. Mutual, commented that the company's new strategy is about diversifying its offerings in addition to insurance.

"There's other financial needs that can be met too," Closs said.

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