Atlantic American Corporation

Atlantic American Corporation

4370 Peachtree Road N.E.
Atlanta, Georgia 30319-3000
U.S.A.
Telephone: (404) 266-5500
Fax: (404) 266-5702
Web site: http://www.atlam.com

Public Company
Incorporated: 1968
Employees: 249
Total Assets: $351.14 million (1999)
Stock Exchanges: NASDAQ
Ticker Symbol: AAME
NAIC: 524113 Direct Life Insurance Carriers; 524114 Direct Health and Medical Insurance Carriers; 551112 Offices of Other Holding Companies

Georgia-based Atlantic American Corporation is a holding company that conducts its large insurance business through its principal subsidiaries: American Southern Insurance Company, American Safety Insurance Company, Association Casualty Insurance Company, Association Risk Management General Agency, Georgia Casualty & Surety Company, and Bankers Fidelity Life Insurance Company. American Southern Insurance and American Safety Insurance, collectively known as American Southern, have historically underwritten automobile and truck liability and physical damage for large commercial policy holders. Association Casualty Insurance Company, originally formed to provide the energy industry’s insurance needs, has specialized in workers’ compensation insurance, but it has also served the insurance needs of other businesses, primarily in Texas and New Mexico. Association Risk Management General Agency provides workers’ compensation insurance coverage through independent agencies. Georgia Casualty provides a wide range of commercial insurance products in the Southeast, including general liability, commercial property, automobile, workers’ compensation, and umbrella liability insurance policies. Lastly, Bankers Fidelity, through a nationwide network of independent agents, markets senior-oriented life and health insurance products, including Medicare supplements. Although it is a public entity, Atlantic American remains under the control of its chairman, J. Mack Robinson, and his family, who hold more than a 60 percent interest in the company.

1937-67: Disparate Insurance Companies Merge as Atlantic American

Atlantic American was not incorporated as a holding company until 1968, but it emerged from the gradual accretion of insurance business ventures, two of which can be traced back to 1937. It was in that year that Austin Dilbeck and Dan Dominey pooled their meager resources to found the Dilbeck & Dominey Insurance Company. Between them, they had just $250, but the industrious pair proved able enough to parlay that sum into a going concern. In just a few years, they built their company into one of Georgia’s largest writers of workers’ compensation insurance. It was also in 1937 that Southern Fire and Marine Insurance Company had its start. Southern, after its transmutation into American Southern Insurance Company, would also play a role in Atlantic American’s history.

In 1946, General Casualty & Surety Company, which would later become Atlantic American Life Insurance Company, was chartered in Georgia as a multiple line insurance company. In the next year, Dilbeck, Dominey, and five of their employees formed Georgia Casualty & Surety Company, a firm that began specializing in commercial insurance writing. Meanwhile, on its separate path, General Casualty & Surety grew apace. In 1951, it got its charter amended, allowing it to write life, accident, health, and hospitalization insurance. It also changed its name, becoming General Assurance Corporation. Then, two years later, Dilbeck and Dominey acquired the company. It thus became the first of the many acquisitions that would finally makeup and define Atlantic American Corporation.

Banker Fidelity Life insurance Company, yet another firm to play a vital role in Atlantic American’s history, entered the insurance industry in 1955. Also based in Georgia, it began as a legal reserve life insurance company, specializing in marketing life insurance and tax-sheltered annuities to teachers; however, it would eventually focus on providing the insurance needs of senior citizens.

Dilbeck and Dominey also expanded their holdings over the next few years. In 1959, they purchased Royal Life, which was formerly named Whitfield Life of Georgia. During the next year, the Dilbeck and Dominey-owned General Assurance Company purchased Universal American, then changed the acquired company’s name to Universal American Insurance Company. It was in 1960, too, that Banker’s Fidelity Life paid its first stock dividend and received recognition from Forbes as a strong competitor in the insurance field.

In 1962, Atlantic American Life Insurance Company was born from the merger of Universal American and an Alabama-based company, Atlantic National Life. Three years later, in 1965, that surviving company acquired two South Carolina companies: The Sureway Life Insurance Company and The Empire Life Insurance Company. The purchase also brought Atlantic American the charters of two other South Carolina companies: Standard Mutual Life and Life of South Carolina. In addition, Atlantic American acquired Trans South Life, which merged with and into Atlantic.

1968-95: Company Changes Ownership, Expands, and Diversifies

It was in 1968 that Atlantic American Corporation (AAC) was first formed. It was a publicly traded entity created to hold and manage the stock of four Georgia insurance companies: Georgia Casualty & Surety Company; Dilbeck & Dominey Insurance Agency, Inc.; Southeastern Insurance Underwriters, Inc.; and Mortgage Services Company, Inc. Two years later, Atlantic American Life Insurance Company became AAC’s wholly owned subsidiary.

Ownership of AAC passed to J. Mack Robinson in 1974, at which time R. Craig Murray was named president and CEO. The corporate headquarters were also relocated that year, moving to The Peachtree Insurance Center in Atlanta. The company’s growth continued, starting in 1975, when AAC purchased a controlling interest in Bankers Fidelity Life. By 1984, because of its continued growth, AAC put in motion plans to build a new annex attached to its offices at The Peachtree Insurance Center.

During the 1980s and into the 1990s, Bankers Fidelity Life grew considerably both in its size and services. In 1983, it became one of the first insurance companies to offer a Medicare supplement plan to cover excess Part B charges in Medicare coverage. Then, in 1992, it introduced its Senior Security Service plans, which, in addition to a Medicare supplement, included final (funerary) expense and short-term nursing care coverage. The following year it introduced its proprietary lead generation program which zeroed in on final expense needs and resulted in a double-digit growth in BFLIC’s sales in each succeeding year. In 1998, in recognition of its solid performance, Bankers Fidelity Life was selected as one of only 155 companies to receive charter membership in the Insurance Marketplace Standards Association (IMSA).

Robinson, AAC owner and chairman, had, in 1988, taken on the additional responsibility of serving as its president, and he remained in that post until 1995, when he was succeeded by Hilton H. Howell, Jr. Before that change of guard, AAC had, in 1991, acquired substantially all the stock of Leath Furniture, an Atlanta-based retailer. At the time, that company owned and operated a string of full-line and full-service furniture stores in Florida and the Midwest. However, in 1995, desiring to restrict its focus to insurance, the company sold its 88 percent share in Leath to Mr. Robinson, who continued to operate that company under the Leath name in the Midwest and the Modernage name in Florida. There were other changes at about the same time, including, in 1995, AAC’s acquisition of American Southern Insurance Company and its subsidiary, American Safety Insurance Company. The additions to AAC brought the corporation’s assets to a hefty $245 million.

1996-99: Company’s Growth Leads to Banner Year

In the next year, 1996, Bankers Fidelity Life Insurance Company merged with Atlantic American Life Insurance Company, leaving Bankers Fidelity as the surviving corporate entity. In turn, Bankers Fidelity, in a combination $3.6 million cash and promissory note deal, acquired and consolidated with American Independent Life Insurance Company, a King of Prussia, Pennsylvania-based firm. At the same time, AAC acquired Self-Insurance Administrators, Inc., an Atlantic third-party administrator of public organizations and companies that insure themselves.

In 1998, the performance of the insurance companies making up the AAC group garnered the consortium an AA – rating from Standard & Poor’s. By that date, AAC’s assets had reached $272.8 million, and the company, through its ongoing acquisitions and restructuring, was approaching a banner year, 1999, when its assets rose to $351.1 million and it undertook further restructuring. In that year, American Independent Life merged with and into Bankers Fidelity, and parent AAC continued its pattern of expansion through major acquisitions and mergers by purchasing Texas-based Association Casualty Insurance Company (ACIC), a firm originally formed in 1978 to fill the unique insurance demands of energy marketers, and its affiliate agency, Association Risk Management General Agency, Inc. In Texas, ACIC had continuously underwritten workers’ compensation insurance since its founding, but it had also expanded into other insurance markets. In 1998, it had also begun making its products and services available in New Mexico. As part of the $33.0 million purchase agreement, Association Casualty’s founder and president, Harold Fischer, was named to ACC’s board.

Company Perspectives:

Atlantic American Corporation continues to position itself for aggressive growth as an underwriter of niche insurance products in specialty markets. We continue to look for potential acquisition candidates that will complement our existing entities while maximizing shareholder value.

2000-01: Atlantic American Positions Itself for Further Growth

By 2000, AAC was well positioned to pursue its strategy of aggressive growth through additional acquisitions and the underwriting of special insurance products. Its total assets over a decade had almost doubled, climbing to $375.8 from $191.3 million in 1991. During that period, through mergers, acquisitions, and restructuring, AAC had developed its panoply of subsidiaries serving the special, well delineated life, health, casualty, and property insurance needs of its customers. Furthermore, its performance had repeatedly won it an AA – rating from Standard & Poor’s. According to its own analysis, presented in its historical outline on its Web site, AAC continued to position itself for aggressive growth as an underwriter of niche insurance products in specialty markets. Its strategy called for new acquisitions to complement the services already offered under its corporate umbrella.

Principal Subsidiaries

American Southern Insurance Company & American Safety Insurance Company; Association Casualty Insurance Company & Association Risk Management General Agency; Georgia Casualty & Surety Company; Self-Insurance Administrators, Inc.; Bankers Fidelity Life Insurance Company.

Principal Competitors

Blue Cross and Blue Shield Association; The Prudential Insurance Company of America; The Travelers Corporation.

Key Dates:

1937:

Austin Dilbeck and Dan Dominey found Dominey Insurance Agency; Southern Fire and Marine Insurance Company is also established.

1946:

General Casualty & Surety Company is granted charter as a multi-line insurance carrier.

1947:

Dilbeck, Dominey, and five others form Georgia Casualty & Surety Company.

1951:

Company charter amendments permit General Casualty, renamed General Assurance Corporation, to write life, accident, health, and hospitalization policies.

1953:

Dilbeck and Dominey purchase General Assurance; Southern Fire and Marine Insurance changes its name to American Southern Insurance Company.

1955:

Bankers Fidelity Life Insurance Company starts out as a legal reserve life company.

1959:

Dilbeck and Dominey acquire Royal Life.

1968:

Atlantic American Corporation (AAC), publicly traded, is organized and incorporated as a stock holding company for four allied Georgia insurance companies.

1970:

Atlantic American Life Insurance Company becomes a subsidiary of AAC.

1974:

J. Mack Robinson purchases AAC; R. Craig Murray is named AAC’s president and CEO, and the company’s home office moves to The Peachtree Insurance Center in Atlanta.

1978:

Association Casualty Insurance Company is established.

1993:

Bankers Fidelity Life Insurance introduces it proprietary lead generation program.

1995:

Hilton H. Howell, Jr. is appointed president of AAC, and the company also acquires American Southern Insurance Company.

1996:

Atlantic American Life Insurance Company merges into Bankers Fidelity Life Insurance Company; Bankers Fidelity also acquires American Independent Life Insurance Company, and AAC acquires Self-Insurance Administrators, Inc.

1998:

Standard & Poor’s assigns the AAC group an AA-rating.

1999:

American Independent Life merges into Bankers Fidelity; AAC acquires Association Casualty Life and Association Risk Management General Agency.

Further Reading

“Atlantic American Acquires Two Companies,” A.M. Best Newswire, July 7, 1999.

“Atlantic American Corporation Announces Merger of Its Two Life Insurance Subsidiaries, Bankers Fidelity Life Insurance Co. and American Independent Life Insurance Co.,” PR Newswire, May 24, 1999.

“Atlantic American Corporation Shows Continued Improved Operations,” PR Newswire, October 25, 2000.

“Atlantic American Corporation Subsidiary, Georgia Casualty and Surety Company, Appoints New President,” PR Newswire, May 17, 1999.

—John W. Fiero