Edwin F. Averyt | Legacy of Leadership Profile
Edwin F. Averyt
In 1937, Edwin F. Averyt and a partner, J. C. Judy, with no experience in the insurance business, opened an accident insurance company in Columbia with only $5,000 capital. When Colonial merged with UNUM Corporation in 1993, Colonial operated in all states except New York and had a market value in excess of $600 million.
Averyt, a 1926 University of Alabama graduate, got the idea for an insurance company when he ran into a classmate in 1929 in Birmingham. Averyt was a salesman for a savings and loan association. His friend was selling insurance and had sold 18 policies that morning. The premium was $2 a year and covered $1,000 for automobile death. The commission was $1 per sale.
"I immediately envisioned starting an insurance company some day on the same principle of selling a very small annual premium, with a sales force, in the beginning, comprised of personable ladies, well-respected in their communities," Averyt recalled in a book he published in 1975, Colonial Life & Accident Insurance Company, 1937–1960.
Eight years and two sales management jobs later, and in the Great Depression, he made his move. He resigned from a securities firm and founded an insurance company without knowing such terms as "unearned premiums," "reinsurance," or "underwriting." But in a few months, he had a sales force of about 50 ladies, most of them housewives.
In his book, Averyt wrote that ". . . one would be hard put to find two grown men with less knowledge about the basic rudiments of organizing and operating an insurance company than Messrs. Averyt and Judy in the founding of this company. Neither had ever read an insurance policy in its entirety, or sold a contract of insurance."
Averyt and Judy called on attorney David W. Robinson to discuss the necessary steps for organizing an insurance company. Robinson arranged for them to meet with Sam B. King, the South Carolina Insurance Commissioner. There they met Sue Godbold, chief clerk, who was thoroughly familiar with the state's insurance laws.
The partners remained friends with Miss Godbold throughout her lifetime. She was a stickler for the law, and Averyt and Judy were always grateful for the education in insurance she gave them.
One amusing story Averyt related in his book involved their first direct-mail campaign. They felt fortunate having paid only $40 for the entire list of citizens in the state with automobile driver's licenses. Surely, they reasoned, if only three percent of those solicited by mail bought an insurance contract, Averyt and Judy would realize untold wealth. With the help of their wives and their secretary, they spent two and a half days and part of a night addressing, stuffing, and mailing 10,000 letters.
They anxiously awaited the postman on the third morning after their letters were mailed, the earliest they felt they could expect results. The postman appeared with a large bundle of letters, kept together with a leather strap. To their dismay, they were their own letters, returned because of incorrect addresses or unknown addresses. The only sale was to Averyt's brother in Harrisburg, Pennsylvania.
Their bank statement of September 30, 1937, convinced them that it was time to stop acting like executives and start selling policies and hiring sales people. Both took to the road the next morning.
In Colonial's first eight months (1937), the company netted $8,638.48 in premiums and expended $9,363.49 in operations and claims, for a loss of $680.01. After two years, Averyt converted from a mutual to a stock company, and he and Judy were on their way to unimagined profits.
Averyt was president and chairman of the Colonial board until his retirement in 1970 and was a director until his death July 1, 1978. His son, Gayle O. Averyt, succeeded him. Judy served as vice president and treasurer during his affiliation with the company.
Averyt served as president of the South Carolina Chamber of Commerce and the Columbia YMCA. He received a Distinguished Service Award from Rotary International and served on boards of the Boy Scouts of America, Carolina Children's Home, Columbia Music Festival Association, and the South Carolina Safety Council. He also belonged to numerous insurance industry associations.
He was born January 6, 1903, in Shelby, Alabama, the son of John Francis and Ella Moseley Averyt. He was married to Asenath Murfee of Brattsville, Alabama, and they were the parents of three children, Ella Averyt DuBose, Gayle O. Averyt, and Dorothy Averyt Poston.
A member of Shandon Baptist Church, Averyt had a wide range of interests and gave to them generously. Buildings were named for him at his church, at Baptist Medical Center, and at North Greenville Junior College. Newberry College awarded him an honorary degree in 1976, and he established trusts at Newberry College, the University of Alabama, and Furman University.
E. F. Averyt was inducted into the South Carolina Business Hall of Fame in 1989. His son, Gayle O. Averyt, was inducted in 1998.
© 1999 South Carolina Business Hall of Fame