The Baltimore Life Insurance Co.'s new president and chief operating officer has a plan and a goal.
L. John Pearson, 45, who joined the small Owings Mills insurer last month, expects to be chief executive officer next year. "That's the game plan, if all works well," he said yesterday.
The goal is to raise profits at the 113-year-old company through targeting small, overlooked segments of the industry, and through increased efficiency. "We're not as productive as we'd like to be," he said. "That is, per dollar of expense, we don't have as much business as we'd like to have."
But business has been picking up lately.
Since 1989, when Joseph E. Blair Jr. was promoted to take over for longtime chairman George Radcliffe, Baltimore Life has pursued a strategy of chasing small -- even tiny, in some cases -- niche life insurance markets, such as pre-need funeral plans, and single-premium universal life policies to help older people transfer assets to their heirs without going through the probate courts.
With Mr. Pearson's arrival, which was announced yesterday, Mr. Blair gave up the president's title, kept the CEO position and took on the formal title of chairman. He's had that role unofficially since 1989.
"The real intention here is that John Pearson would become my successor," said Mr. Blair, 63. He plans to give up the CEO role in June 1996 and remain chairman for an additional year or two.
"I view my job over the next year and a half as preparing him for my job," Mr. Blair said.
Mr. Pearson came to Baltimore from the Utica National Life Insurance Co., where he was president since 1986, and vice president for marketing since 1979, when the company was founded. He graduated from Dickinson College in Carlisle, Pa., in 1971, and has been in the life insurance business his entire 24-year career.
The challenge at Baltimore Life, he said, is to take a "small, growing, conservative life insurance company," and continue its growth with greater cost efficiencies.
Baltimore Life's revenues since 1991 are up only 3.5 percent, to $96.8 million last year. But pretax profits rose 127 percent, to $7.5 million last year.
Part of that is because of a two-year restructuring that has reduced the work force by about a third, all through attrition, Mr. Pearson said. The company now employs more than 600 people, including about 200 at its Owings Mills headquarters.
The mutual insurer, owned by its policyholders, employs 250 agents in Maryland and Pennsylvania, and sells its products in 42 states, mostly through independent agents and marketing organizations.
A major project for this year involves combining two big data processing systems that are currently used by the company, Mr. Pearson said.
Beyond that, the company hopes to continue pursuing the nooks and crannies of the life insurance business, where larger companies can't afford to follow, Mr. Blair said.
"The life insurance business is a mature industry, but we think there are pockets and gaps," he said.