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Morgan and White seized opportunity to buy back company, growing globally

Right place, right time important factors to success story

When Johnny Morgan and David White sold MorganWhite Group in April 2000, the two Ole Miss grads and Sigma Alpha Epsilon fraternity brothers thought they had closed the chapter of owning the business they created in 1987.

Eighteen months later, Morgan and White jumped at the unusual opportunity to buy back the company. Today, MorganWhite Group is an umbrella company for a set of thriving subsidiaries serving 75,000 customers and more than 2,000 groups. Their employee count has grown to 85, and the number of companies represented is 52. The company is preparing to launch insurance products nationwide in June.

“I’d like to say we were real brilliant,” said White, with a chuckle, “but we were at the right place at the right time, dealing with a fellow with a pocketful of money.”

Morgan and White did not develop an interest in the insurance industry until 1985, after Morgan had spent time in the economic development field and White worked for Proctor & Gamble. They founded MorganWhite, Ltd., in 1987, primarily focusing on payroll deduction supplemental insurance products. The brokerage division, which markets products to brokers in Mississippi and nationwide, remains the group’s largest revenue producer.

In 1990, Morgan-White Underwriters was created as the group’s property and casualty agency. Originally known as Mississippi Risk Management Inc., the division managed self-funded workers’ compensation groups and now serves specialty risks for error and omissions (E&O) markets.

Two years later, Morgan-White Administrators International Inc. began administering major medical policies for insurers in Latin America. Located in Miami, with marketing and claims offices in Caracas, Venezuela, and Buenos Aires, Argentina, the company serves clients in 40 countries, “including a fellow in Uzbekistan,” said White.

In 1997, the duo opened Morgan-White Administrators, a domestic third-party administrator. Now licensed in 48 states and the Virgin Islands, the company has contracts for administration with more than 30 U.S. insurers, emphasizing on consolidated billing and premium collections.

In April 2000, New York-based Marshall Rattner Inc., (MRI), whose primary operating company was Professional Indemnity Agency, a well-known underwriting manager of specialized insurance products, bought MorganWhite Group.

“Marshall Rattner was the re-insurance intermediary for our international business,” explained White. “We were going to sell a portion of the company to this young owner so we could get some outside consultation because we realized that sometimes, you can’t see the forest for the trees. When we got to the table, he wanted to buy it all. It was a nice fit for him.”

In the fall of 2001, Houston Casualty Company, an insurance company holding company, purchased MRI, and Rattner paved the way for Morgan and White to buy back the company in which they remained involved.
“Houston Casualty had bought him for millions of dollars, and we were very surprised,” recalled White. “If we’d been in his place, we’d have done the same thing. Houston Casualty is really a property and casualty company, and we’re in the employee benefits business and they really weren’t interested in us. He sold it back to us for half what he bought it. It was a fantastic deal for us.”

Morgan said nothing really changed during those 18 months anyway, that management remained the same.

“Changing ownership of an insurance company is like turning around a barge in the Mississippi River,” he said. “It takes time to get things settled down.”

Around the same time, Morgan and White knew the reinsurance markets were in turmoil following the September 11, 2001, terrorist attacks on the continental U.S., and began working with the world’s top reinsurers through MorganWhite Reinsurance Intermediaries, which they formed in January 2002.

Also under MorganWhite Group: MWG Benefits, a direct sales division and AmFirst Holdings, which reinsures carriers in other states. Morgan, White and company secretary/treasurer Rick Eaton own AmFirst Holdings. For the MorganWhite Group, White is president and CEO and manages the Jackson office; Morgan is vice president and manages the Oxford office.

“It’s very important to us that we’re a closely-held insurance company with the ability to address market needs very rapidly, and that makes us a niché company,” said Morgan. “Because we’re able to see something through from beginning to end, we can make changes if necessary in the product or on the marketing side. David is the best at devising a remedy for a problem in the market, like with a dental plan he created that is very competitive. We’re selling more than 200 new dental plans a month and we’ll launch MWG Dental nationally in June, with United Healthcare as the carrier.”

When an employer asked White to find a way to consolidate billing, he found a solution that, by chance, created a nice profit center for the company.

“I’d like to say it was a grand design by us, but it wasn’t,” White explained. “Let’s say an employer has one company with major medical insurance, another with dental insurance, a different company for vision coverage and another for disability. They have to adjudicate a bill for four different companies, figure it at the end of the month and send out four different checks. We got contracts with those same insurance companies to be a third-party administrator for them, which allows us to do consolidated billing for the employer. The employer gets one bill and sends one check. We deposit it into a trust account, and within two days, we’ve sent checks to the various carriers on their behalf. Human resource people really love dealing with only one entity rather than multiple companies.”

Morgan and White are adding staff to prepare for the influx of business from the upcoming product launch and are mulling other opportunities as they continue to grow worldwide.

“We’ve never purchased anybody else’s business,” said White. “We’ve grown internally. I’m not opposed to it, but a situation that we thought would work for us hasn’t presented itself yet. If something came along that fit, we’d take a look at it.”

Contact MBJ contributing writer Lynne W. Jeter at lwjeter@yahoo.com.


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