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September 16, 2010 Thursday 02:15 PM EST
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With Retirement in Sight, O’Maley Describes How He Led Ohio National’s Growth
Ronald J Panko
CINCINNATI
David B. O’Maley, who is retiring as chief executive officer and president of Ohio National Financial Services after 17 years in the post, said he and his staff have tried to “move the footprint” of the company over the years.They attempted to move it from what he described as a “small, regionally focused mutual” to a life insurance company that has a significant presence nationally. Under O’Maley’s leadership, the company grew from $4.1 billion in assets under management in 1993 to more than $27 billion as of June 2010. O’Maley has recommended Gary T. “Doc” Huffman–currently vice chairman and chief operating officer–become his successor. The board is expected to take action at a meeting on Nov. 5.O’Maley, who will continue as executive chairman of the board of directors, said the company provides individual life and annuity products through more than 40,000 distributors. In the past year, Ohio National celebrated its 100th anniversary, had total statutory revenues climb almost 11% to $4.2 billion, grew individual life insurance sales for the 20th consecutive year, continued its history of having no layoffs, and had its ratings reaffirmed by several rating agencies without change for nearly 20 consecutive years. Ohio National has an A.M. Financial Strength Rating of A+ (Excellent).The growth focus continued even during the recession that began in September 2008, as the company actually added jobs at its corporate headquarters in 2008, 2009 and 2010, O’Maley said. “Any strategy will normally work, or often works, in good times,” he said. “It’s just a matter of degrees of success. When things get tough, the mettle of a company and the strategy’s appropriateness and how you execute it become the differentiators.”All of the growth in Ohio National’s life insurance business has been organic, said O’Maley. The company has two distribution channels made up of career general agencies in 16 states and personal producing general agencies in other states. Those agencies work with more than 7,000 practitioners, up from less than 1,000 in 1992. “What has facilitated that has been the growth in our regional vice president network,” he said. “In 1992, we had seven or eight, but today we have about 40 to 45.”About a decade ago, when many mutual companies were becoming stock companies or deciding to remain mutuals, Ohio National took a kind of compromise approach by becoming a mutual holding company. This corporate structure, controversial at the time, allows the company the flexibility to issue common equity and raise capital. “The availability of that opportunity is comforting to constituents–rating agencies, for example–but we have not executed on that,” said O’Maley. “And so we remain and intend to remain a mutual company.”In the past 20 years, the industry has become much more competitive, and the landscape has narrowed to fewer companies, O’Maley said. And although products have become more commoditized, there have been many new product features, although not all of those products and features have been well constructed, he said. One example is the guaranteed death benefit features in certain universal life products, which he said Ohio National has not offered.The industry, helped by the state-based regulatory structure in place, has come through the recent period of economic turmoil well, O’Maley said. But there is a significant risk that regulatory bodies, including the accounting profession, will become more aggressive in the future and over-regulate, he added. “In effect, they are developing a set of rules in which nothing bad can [be allowed to] happen,” he said. “I don’t think that’s attainable, and the pendulum can swing too far. That’s a very big risk for the industry. That’s likely to result or may result in some companies being unfairly penalized in terms of effect on their businesses.” For example, the companies that write universal life with guaranteed death benefits “may be at significant risk with respect to capital requirements that might evolve in the next three to five years,” he said.O’Maley came to Ohio National in March 1992 as executive vice president and chief marketing officer after serving 24 years with Life of Virginia, first as an agent and advancing to senior vice president and a member of its board of directors.The interview with O’Maley is available at http://www.ambest.com/media/media.asp?RC=177861.(By Ron Panko, senior associate editor, Best’s Review: Ronald.Panko@ambest.com</a>)
September 17, 2010
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