Bethlen Almanac 1997 (Ligonier)

The Hungarian Reformed Federation of America

improving profitability with the aim of becoming either a more attractive target for a possible takeover, or acquiring another company. With small insurance companies like ours, profitability and growth may simply mean a matter of survival.

For the past one hundred years, the Federation has been facing the problem associated with its size. Nevertheless, we had the inherent ability to continue as a viable fraternal insurance society. We were able to overcome these difficulties in the past by our natural size-related abilities to be flexible, creative and responsive to our members and the marketplace-for example, adopting a modern monetary system in 1910 (Pittsburgh, PA Convention). The membership dues and fees were replaced with the premium-paying system, based on the age of a new member. In 1927, the Convention in Ligonier adopted the Modern Actuarial Mortality Table with new portfolio which made the Federation competitive with other insurance companies. Or, just like many other financial institutions in 1931, the Federation had to deal with its financial difficulties also. During the depression, the Federation lost some of its assets that were deposited in defunct banks. The Federation overall lost about 15 percent of its total assets during the Depression. In spite of the losses, the Federation began a vigorous program to revitalize the organization. It reestablished its fulltime district manager program in five districts: Chicago; California; Ohio; West Pennsylvania-West Virginia; New Jersey-New York-Connecticut.

However, with new pressures from fraternal societies and commercial companies, regulators, consumerists and rating agencies like A.M. Best, small societies cannot afford either the luxury of time or the financial ability to withstand these real threats to our very existence. Hence, more and more time, money and energy are being devoted to nonproductive endeavors, creating a situation that is totally intangible for a small society like ours.

Statistical data released by LIMRA (research arm of the life insurance industry) for 1996 shows that, even with large commercial insurance companies, over the past six years, expense control was one of their major concern. Much of the company downsizing that has taken place over the past few years has been expense-driven. Unfortunately, the plurality (50% + 1) of the delegates to the 1996 Convention did not sense the urgency that the insurance industry faces when marching on to the new millennium. Therefore, the golden opportunity of setting the Federation on a more secure financial ground was postponed till the next convention.

We hope that with the new Board at the helm for the next four years, the Federation will feel the urgency that the march on to the new millennium calls for change in operation and outlook.

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