Five Minutes with Mary Harlee of Baltimore Equitable Insurance

April 08--Baltimore Equitable Insurance had surely proven itself, despite its unusual niche, Mary B. Harlee believed.

Harlee, Baltimore Equitable's president since 2014, wondered why a firm that had been writing homeowners insurance policies in the city since 1794 didn't have more customers lining up for its "perpetual" policies.

The policies require large up-front deposits, instead of annual premiums, that are paid back when a holder moves or sells a house. The company, one of the nation's oldest financial services firms, pays claims out of the interest it earns on the deposits.

"It's a no-brainer," Harlee said, especially for people who are savers, can afford to make a lump-sum payment, typically about $10,000 on a $250,000 house, and who would otherwise earn relatively low interest on that money.

What Harlee found, after hiring a research firm, was that despite Baltimore Equitable's more than two-century track record, "no one knew who we were."

Or if they recognized the name, they assumed it had long ago disappeared.

Harlee, who has worked for the firm since graduating from what was then Towson State University in 1983, intends to change those perceptions. The company recently started advertising on the radio.

"Part of my goal ... is to let people know that, yes, we're still here, still in business and still as strong as we were," she said.

Baltimore Equitable started as Baltimore Equitable Society, modeled after Benjamin Franklin's Philadelphia insurance business. It covered policyholders for fire losses.

From 1889 to 2003, the firm was based out of a brownstone building at Eutaw and Fayette streets on downtown's west side. It has operated out of One Charles Center downtown since 2004 and now has 12 employees and 4,000 policyholders.

Harlee started as the firm's sole accountant after college, thinking she likely would move on to a bigger firm. At the time, employees kept records in ledger books and would update policies on the original copies provided by customers. Harlee kept moving up, to comptroller and vice president, before becoming its second woman president in 2014.

The firm has succeeded, she said, by taking a conservative approach to investing policyholders' deposits.

"We have to take that $10,000 deposit over time and make enough money to support our expenses and losses for all policy holders," she said.

As of Dec. 31, the company had $50 million in policyholder deposits, but a total of $150 million in investable assets. Even if every customer canceled a policy, Baltimore Equitable could pay them back with $100 million to spare.

Harlee said policyholders who became customers in the early 1990s are beginning to leave. She hopes to attract new policyholders at a rate of about 100 per year. As in the past, all policyholders receive a gold-leaf plaque showing clasped hands and the founding date of 1794, which is displayed on the property.

"We're not really trying to grow," Harlee said. "We're trying to replace the policyholders leaving us with new policyholders."

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