José Suquet made streamlining operations at Pan-American Life Insurance Co. a priority when he was named CEO and president in November 2004.
The company has since divested its financial advisory service and group insurance sales, outsourced its technical support and sold the 28-story downtown office building containing its headquarters. In the process, Pan-American has become a more efficient revenue-earning machine.
“We had to get back to the core,” said Suquet. “We had to get back to why this company was founded in 1911 — Latin America.”
Thanks to surging life insurance policy sales in its Latin American markets, Pan-American reported revenue of $262.4 million last year, an 8 percent increase from $242.2 million in 2005.
Without providing specific sales figures, Pan-American reported an 85 percent increase in international dollar sales, an 83 percent jump in Puerto Rico region life sales and a 37 percent vault in life sales in the Andes region of South America.
Pan-American also bolstered its financial standing by reorganizing as a mutual holding company in 2006 to further strengthen its financial base on the capital markets. Known as Pan-American Life Insurance Group as of Jan. 1, the company reported $312.7 million in capital — an all-time high.
Suquet said the company adopted a “laser focus” on growth in its Latin American markets after branching into other areas of business in the late 20th century. He said Pan-American lost its way in the 1980s and 1990s when it attempted to become a player in the U.S. market for large and small group insurance, pensions and investments.
“We used to be what I called a mile-wide-and-inch-deep tidal wave,” said Suquet. “We made a lot of noise but had no effect whatsoever.”
By shedding business where it did not compete effectively, Suquet said the company concentrated of its “gem of a business” in Latin America. He points to Ecuador as a prime example of Pan-American’s longevity. He was in Quito last year to celebrate the company’s 50th anniversary in the country.
“We have survived their coups, military and peaceful, recessions, hyperinflation, volcanoes and earthquakes,” he said.
Pan-American’s headquarters at 601 Poydras St. survived Hurricane Katrina with damage confined largely to its top floor, but Suquet’s streamlining strategy led to selling the building to Equastone of La Jolla, Calif., in December. The purchase price was not disclosed.
Suquet said the proceeds of the sale are being reinvested into equities and fixed income accounts to be used for core businesses.
Pan-American has a 10-year lease to remain as the building’s chief tenant with six five-year expansion and renewal options, said Suquet. According to Equastone, the Pan-American building was 75 percent occupied at acquisition. It’s the first property in New Orleans purchased by Equastone, which has plans to expand in the city, said Suquet.
Pan-American has no immediate plans to sell its interest in the InterContinental Hotel adjoining the office building, said Suquet, but its status will be considered “in the next couple of years.”
Downsizing in terms of Pan-American employees in New Orleans “is just about over,” he said. The company has around 300 employees at its Poydras offices, down from around 500 when Suquet was hired. Companywide, Pan-American has about 760 employees, down from nearly 800 in 2005.