A Publication of WTVP

Michel A. McCord joined his family’s business, Illinois Mutual Life Insurance Company, in 1967 after he graduated from the University of Arizona with a bachelor’s degree in business administration, majoring in finance and insurance.

He started with Illinois Mutual as a special sales representative, and moved up the ladder to vice president of sales in 1974. That same year he received his Chartered Life Underwriter Designation.

He became president of the firm in 1983, and in August 1990 became chairman, president, and chief executive officer.

McCord serves on the boards of the Bradley University Business Council, the Economic Development Council for the Peoria Area, the Hult Health Education Center, the Peoria Area Community Foundation, Peoria Neighborhood Commission, and United Way. He’s on the advisory board of the Salvation Army, a past member of the Peoria Area Chamber of Commerce board of directors, and is active in the Rotary Club of Peoria.

He and his wife Kay have five children: Molly, Scott, Katie, Melanie, and Mitzi.

Illinois Mutual is headquartered in Peoria. Give us a synopsis of your company’s history.

We began in 1910 in Danville, Il., as Illinois Woodmen Accident Association. We moved to Peoria at the urging of the Peoria Area Chamber of Commerce in 1916. About the same time, we became Illinois Mutual Casualty Insurance Company under the Old Line Mutual Act of Illinois.

The company originally sold accident-only policies through the 1920s and 1930s, and the company expanded its product portfolio beginning in 1940 when we went into the hospital insurance business. The 1950s saw the company become one of the first insurance companies to sell individual Guaranteed Renewable Disability Income Insurance.

In 1958 we became a Legal Reserve Mutual Life Insurance Company as we entered the life insurance business. Most of what we sold thorough the 1960s and 1970s were individual major medical and hospitalization policies along with disability income and life insurance.

Because of escalating medical care costs that occurred in the late 1970s and early 1980s, we withdrew from the hospitalization market in 1982. Currently we offer three lines of insurance: individual life, individual guaranteed renewable disability income, and annuities.

What prompted you to go into the family business? Did you consider other choices?

My first taste of the life and health insurance business came during my college years. During summer breaks, I worked for the company in sales, helping educate agents on our products in agency meetings. I began to understand the need for selling life, disability income, and hospitalization insurance.

I was fortunate to see how our products helped provide the end consumer with peace of mind. It offered opportunity as well as challenges and I wanted to come back to Peoria and work for the company.

Illinois Mutual is called a “life insurance company.” Is that your primary emphasis? What other types of coverage do you offer?

We conduct business in 32 states through 15,000 independent life and health licensed agents. These agents look to Illinois Mutual because of our quality disability income, life insurance, and annuity products. These products provide affordable insurance that appeals to many average people who earn a living every day and need insurance protection.

When did Illinois Mutual first begin to expand outside of Illinois? How rapid was that expansion, and what’s been your largest period of expansion?

Illinois Mutual has been expanding into states throughout our company’s history. When I joined the company in 1967, we were already in fifteen to eighteen states. Since that time, we regularly entered other states. For example, we are currently in the process of expanding into Maryland.

What are the nuts and bolts of Illinois Mutual – number of employees, location of offices, coverage areas, etc.?

We employ about 200 people, of whom about 190 work in our home office and reside throughout the tri-county region. We also have four regional sales offices.

Explain the relationship between your 15,000 independent agents and the home offices. What procedure does an independent agent go through to affiliate with Illinois Mutual?

Individuals who was to sell life insurance, disability income insurance, or annuities must secure an insurance license in the state where they are going to sell insurance. Once they have obtained that license, they can represent and obtain and insurance contract with any life or health insurance company to sell that insurance company’s policies.

We provide to all of our agents – as well as to agents who inquire about our policies – sales materials, assistance in calculating premiums, and assistance in utilizing our policy software.

“Mutual” is also a part of your name. What is a mutual insurance company and how does it benefit your policyholders?

A mutual insurance company is owned by individuals who buy the company’s policies. Each policy owner’s ownership participation occurs through dividends and/or lower premiums and a vote, usually through proxy, for the board of directors who then elect the officers to manage the affairs of the company.

A stock insurance company, on the other hand, is owned by stockholders and it sells insurance to consumers who become policyholders.

What do you think the public’s perception of the insurance industry is? How has that perception changed in the last 20 years?

I believe there has not been a lot of change in the perception of our industry since I came into the business 30 years ago. As with any industry, there is always good mixed with negative perceptions, with the negative receiving most of the publicity. Surveys show that people aren’t really negative about the industry, but are passive toward our intangible products. Those feelings are understandable, as there are many other tangible products in our economy where consumers prefer to spend their money

We are a stable financial industry employing millions of quality people. The billions of dollars paid in benefits, in addition to the billions of dollars invested into our economy by life insurance companies, have had a very favorable impact on our country’s overall economy for many years.

There are a lot of insurance companies, especially in this area. How do you distinguish yourself from others?

Actually, life and casualty companies are represented in central Illinois through sales offices and agents who sell many products from many companies.

Illinois Mutual has its corporate headquarters in Peoria. In addition, we are represented by sales offices and agents throughout the nation.

What does Illinois Mutual offer a consumer that your competitors may not?

Quality products backed by a long-standing reputation of fairness, honesty, and friendly personal service – that really is very hard to compete with in our industry.

In addition, we offer the strong financial stability every consumer should look for in an insurance company.

How global is the industry?

The industry is global, but Illinois Mutual has found significant upside market potential in the United States. We have found continued success by focusing our resources here.

Illinois Mutual is currently focusing on business in the United States. What’s involved when an insurance company wants to operate in other countries? Do you see that as a possibility somewhere down the line?

I don’t want to say never, but I think that in the near future our concentration on selling insurance will remain in the United States. Maybe somewhere down the line we would consider selling in other countries, but I don’t believe that is a near future event at this time.

What’s the status of government regulation of your industry? Are there laws you consider particularly onerous?

As a company and industry, we are highly regulated on a state-by-state basis. I don’t believe the laws that regulate our industry are too onerous. Regulation is needed for two reasons: two level the playing field among companies and to protect consumer interests.

What one or two government regulations have the most effect on your business?

Probably compliance regulations, along with policy and amendment filing requirements.

What’s the biggest challenge facing the insurance industry today?

The biggest challenge facing the insurance industry is finding ways to communicate to the public the need for insurance in their lives. Have your readers consider what would happen if they became hurt or sick and couldn’t work? Or have they thought about the consequences of inadequate life insurance to surviving family members? Communicating these needs is our greatest challenge.

How is Illinois Mutual rising to that challenge? Have you carried our special advertising campaigns? Presented seminars? What else?

All life and disability income insurance sold at Illinois Mutual is sold through agents. In order to sell our insurance, we must constantly conduct meetings and seminars with all agents to encourage and educate them about our products.

We have done very little direct advertising to the consumer. However, we are currently initiating some direct consumer mailing campaigns to determine if such campaigns will generate consumer interest in purchasing life insurance protection.

You built your current headquarters building 21 years ago in what was then a dying part of downtown Peoria. Now you’re situated on what has become a prime piece of real estate. Do you have a crystal ball?

No, there was no crystal ball. We began building our current office in downtown Peoria starting in 1977. Because we ere previously downtown we chose to stay downtown. Center court of the Civic Center Arena is where our home office once stood. Downtown was the best place for us, as it was the most convenient location for all of us who worked at Illinois Mutual.

Some have argued that the Peoria area has a leadership void. Do you agree with that?

Peoria has many fine leaders: there is not a void. The success of this region has occurred because of good leadership that is committed to improvement. Central Illinois is a very good place for all of us to live, raise a family, and have good, prosperous lives. To continue this, we must always utilize our strengths as a region and build on them and recognize our weaknesses to eliminate them.

There is a current trend among industries to combine insurance services with banking services. How has Illinois Mutual been affected by that trend?

To date, the effect has been little, because combining these services has not proven successful in the industry yet. We hope to develop a successful combination through our relationship with BankPlus.

Illinois Mutual is the major stockholder in BankPlus. How did this relationship come about?

We were originally aware that BankPlus, then Morton Federal Savings Bank, wanted to demutualize from a mutual federal savings bank to a stock savings bank owned by stockholders. Illinois Mutual felt it was a well run savings bank that afforded us an excellent long-term growth stock investment, so we purchase a majority stockholder interest. To date, the stock has performed as expected and we believe it will continue to do so.

If we put together a list of “Who’s Who Among Central Illinois Philanthropists,” Illinois Mutual’s name would be among the top ten. Why is that? What’s your company’s philanthropic philosophy?

I think our philosophy is a fairly common one for most businesses. We must run a profitable business that properly serves our policy owners and provides a good workplace for all us who work at Illinois Mutual. Then, we have an obligation to give back to the community through charities and other community activities.

What are some of the special community projects that Illinois Mutual is involved with?

Special community service activities that we are very involved in every year are the United Way campaign, Christmas in April, Bradley University (through scholarships and the Robert A. McCord lecture series), the Race for the Cure, and School District 150’s Adopt-a-School program.

You personally are about to embark on a grueling year as chairman of the Heart of Illinois United Way campaign. That’s a tough job. How do you find time to do that and run a successful company?

The Heart of Illinois United Way is a wonderful organization that has meant so much to this community. It is a great honor for me to chair the 1998 campaign. It is not a tough job in this community, because the people in this community care and have always been generous in their giving. As far as finding the time, that is something you can always do if you want to give the time. Along with many others in central Illinois, I feel that you have to go beyond doing your job, and serve your community in other ways.

Last year’s campaign raised a record amount of money. Do you feel pressure to top that?

There is no pressure. Last year’s campaign was the most successful ever, which was no surprise to me because of the leadership of Henry and Sharon Holling, the cabinet, and the staff of the United Way, but most importantly, because of all the people within our community and their generosity. That all will carry through in 1998, creating a successful campaign.

When you have spare time, what sorts of things do you like to do?

My spare time is spent with my family, traveling, a little bit of sports, including golf, and a little bit of reading. With five children, even though they are all grown up, they still keep us busy.

Have any of your children joined Illinois Mutual, and if so, in what capacity? Do any of them have future plans to join the family business?

As a matter of fact, my daughter Katie has been with the company since 1994. She is currently the manager of the sales division.

I have always encouraged my children to seek a career path that will provide them with challenges and satisfaction. If they choose insurance as a career to meet this goal, then Illinois Mutual would be an excellent choice for them, as it has been for me and, I believe, has been for Katie.

What do you see in the future for Illinois Mutual – where will the company be ten years from now?

I believe there will continue to be a need for people to buy the outstanding life, disability income, and annuity products that we sell. Our success will continue because we understand what it takes to maintain a viable company.

I think the industry will see changes in how products are distributed. More of our products will be sold through other financial institutions – maybe even through other marketing approaches – in addition to the traditional agency system, which has been in place for years and will stay in place.

We like what the future holds for our company, both short and long term. IBI