Columbia is bigger in insurance and insurance technology than people know
Gayle Averyt began his career in insurance in 1958 with Colonial Life & Accident Insurance Company.
Photography by Bob Lancaster
“Columbia is the center of the universe for insurance technology in the United States,” says Deb Smallwood, founder of Strategy Meets Action, a Boston-based insurance advisory firm. “I’ve been in the insurance industry a long time, and I remember when the technology hub of the industry was Hartford, Conn. But all of a sudden you look up and here in the 21st century, it’s Columbia.
“Columbia has a healthy, flourishing community of insurance professionals who may compete with each other, but they are personal friends and professional colleagues … it’s a very healthy environment for the industry,” she says.
The city has a strong presence in both the insurance and the insurance technology companies. “It’s great for Columbia to have such a deep insurance presence,” Deb continues. “The insurance industry is a very financially stable industry, and historically it has weathered all financial crises, recessions and even wars. Even in 2007 and 2008 when the recession hit, the property and casualty companies continued to invest in technology. Technology has become interwoven into the fabric of the business, and it becomes difficult to compete without a continuous investment in technology.”
Many factors led to Columbia’s prominence in the insurance world. In the very beginning, it was geography. Gayle O. Averyt, who began his career with Colonial Life & Accident Insurance Company in 1958 and served as CEO and chairman of the board of directors from 1970 until 1993, says his father, Edwin F. Averyt, chose Columbia as the place to start the company because it is in the middle of South Carolina, making it convenient for reaching the rest of the state. “That’s probably why BlueCross BlueShield is here,” Gayle says. Though BlueCross BlueShield’s first office was in Greenville, the company moved to an old grocery store building in the Five Points area of Columbia in 1957 and is now one of the state’s largest employers.
In 1937, Edwin Averyt moved to South Carolina to become state manager for a company that sold installment savings, 10-year bonds and equities. When he received a big commission check for $2,000, he raised an additional $3,000 from investors, resigned from that job and used the $5,000 to start Mutual Accident Company in Columbia. In 1941, that company was converted into a stockholder company and grew to become Colonial Life. Today, Colonial Life remains headquartered in Columbia and has more than 1,100 employees and approximately three million policies in force across the nation. Colonial Life sells voluntary benefits through the workplace and may have been the first company to sell individual insurance policies through payroll deduction.
Gayle offers a simple explanation for how Columbia became an insurance town: competition. “Competition leads to clusters of businesses in the same area,” Gayle says. “Detroit has autos. Silicon Valley has high-tech industries. Columbia has insurance.”
Gayle describes the process of an area becoming an industry hub as “evolution and revolution” as local companies grow and clusters develop. First an entrepreneur with an idea or invention starts a company. Within two to three generations, a competitor will start nearby, doing the same thing. The competitor is frequently someone who came from within the original company who had a different idea about how things should be done and saw an opportunity.
In the case of Colonial Life, founder Edwin Averyt ran it until his health forced him to hand over the reins in 1970. Gayle became CEO and chairman of the board, and Leon Goodall, who had joined the business in 1959 and had served as vice president in charge of the sales force, became president. Leon left in 1979 to start his own company, Continental American, which was recently acquired by Aflac and, like Colonial, sells supplementary insurance products through the workplace.
Columbia’s start as an insurance town began in 1869 right after the Civil War with the establishment of E. W. Seibels & Company, a fire and life insurance company that over the years grew and evolved into Seibels-Bruce then Seibels Insurance & Technology Services. It is Columbia’s oldest business enterprise still operating within the city of Columbia; it even boasts the city’s first post office box number.
In 1974, Larry Wilson created Policy Management Systems, starting a whole new industry: insurance technology.
In 1974, the most profound change to Columbia’s insurance industry quietly took place at Seibels. Larry Wilson created Policy Management Systems, a division of the company that later became PMSC, an independent, NYSE-traded company, starting a whole new industry: insurance technology.
Larry began his career at Seibels when he was a 19-year-old student at USC. He found out he could take IBM classes for free, so he went to every one that was offered. He also earned his Chartered Property Casualty Underwriter (CPCU) designation. This background in computers and insurance turned into a growth opportunity for Larry — and for Columbia.
“I decided I wanted to develop software for the insurance industry. There were very few people who understood both software and insurance,” Larry says. He took full advantage of his unique perspective and position, turning PMSC into a technology powerhouse. Larry served as its CEO from its incorporation in 1981 until it was merged with CSC in 2000.
“We started with five people, and at one time, we were hiring 25 people per week,” Larry remembers. “We ended up doing business with 70 percent of all insurance companies in the world. We did business in 30 countries.” When PMSC was sold to CSC, it had 6,000 employees.
Larry has since joined FirstMark Capital, a $1.8 billion early stage venture capital fund, and flies to his New York office from his home in Columbia. He has started four technology companies and invested in two others. Among the Columbia-based companies are Dove Tail, which has doubled in size every year and is located on Columbia’s Main Street; Eagle Eye Analytics on Taylor Street; and Duck Creek, which recently was sold to Accenture.
Dianne Parker, who worked for PMSC from its early years until after CSC acquired it, has a deep understanding of the industry, the players and what it means for Columbia. She says, “You couldn’t have picked a better owner for Duck Creek than Accenture, a widely respected blue chip global technology firm. The acquisition will generate jobs in Columbia. Accenture recognizes that there is a high level of technology expertise in Columbia, and they’ll want to increase staff, not decrease it. That is big for Columbia.”
Dianne Parker, second from right, works for FINEOS, a Dublin, Ireland-based software company with employees worldwide. Shown here with Karen Furtado (left), Amy Corbett (standing) and Karen Tebrich (right).
Dianne currently works for FINEOS, a Dublin, Ireland-based software company with employees worldwide. They’ve hired five people for their virtual Columbia office within the past 12 months and are expecting to add more. “It’s very exciting to work for a company based in Dublin, Ireland while being able to live in Columbia – the best of both worlds. Many global companies recognize the talent in Columbia and are creating virtual offices. Columbia is a hotbed of property and casualty talent,” she says, noting that she knows other companies looking to Columbia for talent and expects more virtual offices to be set up in the future.
Since PMSC dominated the insurance technology industry for so long, it’s no surprise that veterans of the Columbia company are found throughout the industry. When insurance technology specialists meet each other at conferences and other professional gatherings, Dianne says, “People ask, ‘Which years did you work at PMSC?’” She was recently at a national conference of insurance professionals in Washington, D.C. where, of the 150 companies in attendance, very few didn’t have somebody who at one time worked at PMSC. “It really amazes my Irish colleagues,” she says. “They thought that the United States was so big, but they’ve come to realize everybody in insurance technology knows each other.”
But all roads no longer lead back to PMSC. Columbia’s insurance technology cluster has grown and diversified. “Now when people go around the room and introduce themselves at national conventions, some are working for companies in Columbia I don’t know — people who are here because there are so many insurance technology firms. It’s wonderful how much influence Columbia has on the industry,” Dianne says.
The talent pool helps homegrown companies as well. “Being a smaller company in the insurance technology space, our business analysts and insurance consultants must be experienced in many property and casualty disciplines, so that one person can easily wear multiple hats. The fact that we can find such talent without having to relocate them is a huge benefit to our company,” says Rod Giess, president of SpeedBuilder Systems, Inc., one of the more than 35 growing insurance technology firms in Columbia.
Rod Geiss is president of SpeedBuilder Systems, Inc., one of the more than 35 growing insurance technology firms in Columbia.
Columbia is working to preserve its place as a technology cluster, in part because of the efforts of the Darla Moore School of Business, New Carolina, the Chamber of Commerce and a coalition of businesses. These groups have joined together to create ITS|SC, The Columbia Insurance Technology & Services Cluster. Eddie Jones, Cluster chair, says, “Columbia has been an important center of innovation in insurance and insurance technology for many decades. Several large anchor companies like BlueCross BlueShield of South Carolina, Colonial Life, Seibels, Continental American Insurance (now part of AFLAC), and PMSC (now part of CSC) have grown up here so there is a rich tradition and a strong community of talent. It is also important to note that Midlands Tech has long played a pivotal role in meeting the technical training needs of this industry, and the Moore School hosts one of the Top Ten Insurance and Risk Management programs in the country, as well as the Innovation in Insurance program.” That program, also known as i3, is a student run small business that serves the insurance technology industry with a research website and a weekly email newsletter that reaches 1,200 subscribers around the world.
Eddie Jones of Accenture volunteers with The Columbia Insurance Technology & Services Cluster and is chair of the i3 board.
Eddie, who works at Accenture, volunteers his time to the coalition and is chair of the i3 board, is trying to get the word out on how important this industry sector is. He says, “We are trying to help tie the great education programs more closely to the companies here that offer great career opportunities and vice versa. One of the challenges we face is that there isn’t a lot of awareness that insurance technology is such a strong industry here and that career opportunities range from business leadership to system architecture, from sales executive to project manager, and from user interface designer to programmer.”
“I guess it’s pretty simple — Columbia is my home and insurance technology is my industry,” Eddie says. “Anything that I can do to promote both is certainly worth the effort.”