Chairman and chief executive officer, American Family Insurance
Born: 1942, in Hutchinson, Minnesota.
Education: Attended Casper Community College.
Family: Married Delores (maiden name unknown); children: four.
Career: American Family Insurance, 1963–1990, various positions including agent, district sales manager, state director, regional vice president, and executive vice president of field operations; 1990–1998, president and chief operating officer; 1998–, chairman and chief executive officer.
Publications: A Box of Treasures (children's book), 2000.
Address: American Family Insurance Group, 6000 American Parkway, Madison, Wisconsin 53783-0001; http://www.amfam.com/.
■ Harvey R. Pierce climbed the corporate ladder at American Family Insurance Group from the position of agent in 1963, to president and chief operating officer in 1990, and to chairman of the board and chief executive officer in 1998. Through his career at the top positions in the company, his leadership allowed American Family to continue growth despite difficult periods involving heavy losses due to claims as well as an unstable stock market. An avowed family man, Pierce was actively involved in numerous civil and charitable organizations. In 2000 he also penned a children's Christmas book.
Pierce's life and career were relatively stable, given his rapid rise through the ranks at American Family Insurance. He was born in 1942 in Hutchinson, Minnesota, and grew up in nearby Willmar, which is located in the center of the state, west of St. Paul–Minneapolis. He married his high school sweetheart, Delores, and for a time attended Casper Community College in Casper, Wyoming. He joined American Family as an agent in Minnesota in 1963 at age 20.
Over the next 14 years Pierce moved to several cities in Minnesota, including Chaska, Windom, Fairfax, and Willmar. At one stop his family moved to St. Joseph, Missouri. He held several positions at American Family during his early years, rising from agent to district sales manager, state director, regional vice president, and, eventually, executive vice president of field operations. In 1987 he moved to Madison, Wisconsin, where the headquarters of American Family was located.
Rising the corporate ladder to a leadership position within American Family Insurance is not unusual. In 1990 Dale Mathwich, then the president and chief operating officer at American Family, was elected as board chairman and chief executive officer, replacing Robert Koch. Like Pierce, Mathwich had begun his career as an agent and had risen through the ranks to the top position in the company. When Mathwich was elected CEO and chairman, the board chose Pierce to become the new president and chief operating officer.
Pierce assumed his new duties after American Family had experienced several years of growth. Between 1984 and 1990 the company's assets had grown from $1.6 billion to $3 billion. Its policies had risen from 3.2 million in 1984 to 4.6 million in 1990, and the total amount of life insurance in force had more than doubled from the previous five years. When Pierce took over as president and chief operating officer, American Family was doing business in 14 states.
In Pierce's first year as president and COO, American Family announced that it had experienced a net loss, which was not unusual for insurance companies. At that time Pierce maintained that the company had continued to expand its business. Subsequent years were more successful while Pierce was president. In 1995 the company announced an income of $363 million, an increase of nearly $200 million from the previous year. Two years later, in 1997, the company posted record sales and revenues, based in large part on high returns on stock investments.
Pierce's years as president and chief operating officer did not come without controversy. In 1995 it was revealed that top executives within American Family had received double-digit raises even though the company had announced that certain agent commissions would be reduced significantly over a 10-year period. Four American Family agents were fired after raising complaints against the insurance company's management, including Pierce. In January 1996 a group of agents sought to oust the board of directors, which then included Mathwich, Pierce, Albert Nicholas, and Richard Renk. Although the agents cast about 1800 proxy votes against the incumbent board members, the board remained intact by receiving a high majority of the overall votes.
The following year, Pierce, along with Mathwich and others, was named in a lawsuit against the company filed by two former American Family agents. The agents reportedly supported a bill in Minnesota that would have banned sales quotas imposed by insurance companies. American Family did not support the law, and when the agents voiced their support for the legislation, they were fired. American Family settled with the agents out of court in 1998.
Despite the controversies, under the leadership of Mathwich and Pierce, American Family increased its total policies from 4.6 million to 6.8 million from 1990 to 1998. The company tripled its total assets during this period to $9.2 billion and became the 11th-largest insurance company in the United States.
When Mathwich retired in 1998 after having served 42 years with the company, American Family recognized Pierce's leadership, naming Pierce chairman of the board and chief executive officer. Fittingly, the Capital Times referred to Pierce as an "avowed family man" as he took the reins of the company (August 12, 1998). Pierce's style complemented that of Mathwich, who was known as a "nice guy" within an industry that is often known for cutthroat tactics ( Capital Times , January 21, 1999).
In March 1999, when Pierce presided over the annual meeting of American Family Insurance, his first after his election as CEO and chairman, the company had stumbled through a difficult year. Record storm claims of $583 million hurt the company's income that year, which fell from $251.6 million in 1997 to $39.6 million in 1998. Despite the bad news, Pierce "kept smiling" when he borrowed Mathwich's favorite company motto, "We're still strong, growing, and friendly" ( Capital Times , March 3, 1999).
Pierce's first five years as chairman and CEO involved something of a roller-coaster ride. In 2001 the company paid a record $834.9 million in storm and catastrophe losses, though company profits were $100.4 million during that year. During the following year, losses fell to $309.3 million, but the company's total income fell by 42 percent to $58.2 million due to a weak stock market. The company rebounded in 2003, when net income increased by 167 percent to $155.4 million. Pierce remained optimistic, noting in 2004, "Building and maintaining an appropriate level of equity is part of what makes us a strong, stable company. Our growth equity lets customers know they can count on us to keep our promise to be there when they experience a loss" (March 2, 2004).
As American Family celebrated its 75th anniversary in 2002, Pierce said that the company he led maintained values that were present from its origins as Farmers Mutual Insurance Company in Madison in 1927. In a guest column for the Wisconsin State Journal , Pierce wrote, "We remain committed to the same values that Wittwer [the company founder] established 75 years ago: integrity, strong, personalized consumer service, quality products, and a dedication to our company's hometown" (September 29, 2002). By 2004, under Pierce's leadership, American Family had expanded its areas of operations to 17 states, with plans to continue expansion in later years.
In keeping with the family atmosphere that the former chairman and CEO Mathwich favored, Pierce maintained that his top priority remained his family. His wife, Delores, described him as a "very kind, gentle, patient man" in an interview with the Wisconsin State Journal (August 16, 1998). In this same interview Pierce noted of himself and Delores, "We're pretty basic people. I think I'm very family oriented, but when it comes to business, I'm very task oriented." Two of Pierce's children served as agents for American Family Insurance.
Throughout his career, Pierce remained highly active within his community and in professional associations. In 2003 he was elected first vice chairman of the board of directors for the National Association of Independent Insurers. He was appointed to the board of the Insurance Institute for Highway Safety and became its chair in 2004. He participated on the University of Wisconsin Children's Hospital Advisory Board and the Founders Club of Southwest Missouri State University Insurance Chair. He also served on the boards of the United Way of Dane County, Competitive Wisconsin, the Greater Madison Chamber of Commerce, and Family Services in Madison. In addition, he was a member of the Wisconsin Governor's Economic Growth Council, a member of the Key Club Committee in Madison, and a trustee of the American Institute of Charter Property Casualty Underwriters–Insurance Institute of America.
In addition to his positions in various organizations, Pierce was visible in his community. In 1994, while he was president and chief operating officer at American Family, he personally delivered 300 stocking hats to the Madison Police Department to be distributed to children in need. American Family also made several sizable donations in the community, such as a $20,000 gift in 1997 to a local housing project in Madison as well as a $10 million gift in 2003 that allowed American Family to claim naming rights to a new children's hospital. After the company donated the money, Pierce was named to the hospital's advisory board.
In 2000 Pierce added a rather unusual entry on his resume: author of a children's book. In his spare time he wrote a Christmas tale entitled A Box of Treasures , which was sold at several locations in Madison. The book told the tale of a box of ornaments awaiting placement on a family Christmas tree. The book also included a family recipe for shortbread. Proceeds from the book's sale benefited the United Way of Dane County.
"American Family Board Resists Agent Takeover," Wisconsin State Journal , January 20, 1996.
"American Family Reports Strong Gains in 2003," Press Release, American Family Insurance Group, March 2, 2004, http://www.amfam.com/media/news_releases/2004/ann_op_03.asp .
Ivey, Mike, "Am. Family Weathers Stormy '98," Capital Times , March 3, 1999.
——, "American Family Taps New Chief Executive," Capital Times , August 12, 1998.
——, "Nice Guy Mathwich Bids Am. Fam. Farewell," Capital Times , January 21, 1999.
Pierce, Harvey R., "American Family Commitment Still Strong," Wisconsin State Journal , September 29, 2002.
Simms, Pat, "New CEO Says He's 'Pretty Basic,'" Wisconsin State Journal , August 16, 1998.
—Matthew C. Cordon