Randy Talbot could have taken the money and embarked on an amateur squash career.
Safeco's top managers offered him that, he says -- a sizable golden handshake that would allow him to sail off into the sunset after helping them find a suitable buyer for the life insurance division he'd been running for them.
Instead, he decided to form a new company. He put together an investment group that bought Safeco's life insurance arm for $1.35 billon. He kept together his management team and some 1,300 employees around Puget Sound. He moved the company from Redmond to two gleaming office towers in Bellevue. And he took the company right up to the edge of an initial public offering last fall before pulling back to wait out the Wall Street financial storm.
'He's just a great strategic business thinker and leader,' says Bellevue Chamber of Commerce CEO Betty Nokes. 'He's plugged in and engaged.'
The east side of Lake Washington is filled with sexy high-tech startups promising to change the world -- or at least the way we manage our day books. Amid them, Symetra's an anomaly. It sells life insurance and annuities. It doesn't get much more old-school than that.
Talbot learned all about the difference when he moved here during the height of the first tech boom. 'I was referred to, in social gatherings I went to, as 'old economy.' Running a life insurance company didn't seem to be in step with what was happening on the eastside.'
But don't tell Talbot that insurance isn't a glamorous game.
'I liked it from the first day I was in it. It's such a vital part of the economy. I always thought it was a noble cause, and a great way to make a living,' he says.
But then, you'd almost expect that from a guy who's really only had two jobs in his life. He started out as an insurance broker in his native New Mexico, running the company his dad had founded. When Safeco bought out Talbot Financial Corp. in 1998, he moved up north to Seattle and started climbing the Safeco executive ladder.
Safeco's decision in 2004 to spin off its life insurance unit -- a move it needed to make to raise capital and allow it to focus on its casualty insurance business -- launched Talbot on the biggest adventure of his career.
The day Safeco announced the decision was 'one of the hardest days of my life,' Talbot says. Everyone inside the company's old Redmond office was shell-shocked, he recalls. 'I wasn't emotionally in very good shape.'
Conventional wisdom was that Safeco would sell off the different pieces of the business separately, likely to buyers that would move the separate parts to Iowa, which has a friendly regulatory environment and has become an insurance industry center.
But Talbot turned down the Safeco board's offer of a big payday in return for helping sell off the unit. 'Pretty instantly, it hit me that there were 1,300 people and a 42-year-old company that didn't de- serve not to have a future.'
The problem was, he says, 'I didn't know what to do about that.' He had some experience raising capital to do merger deals, but this would far exceed any of those.
The first step was to steady the rank-and-file. He says he told his people to 'take care of our customers, take care of our agents. Work hard -- it's our only chance to save the place.'
And then he tried to rally his management team around his vision of 'playing through the clouds and hoping there wasn't a mountain inside.'
Talbot and his team started working Wall Street. They made a favorable impression, says Robert Hafner, a bond analyst with Standard & Poor's.
Talbot is 'a sharp, affable guy who knows his business well,' Hafner says. 'He comports himself well, and I fully respect his ability to lead the company.'
A telling sign, Hafner says, was that while Wall Street ended up pumping more than $1 billion into Talbot's venture, none of the investors insisted on placing their own people on the new company's management team -- which wouldn't be surprising given the circumstances.
'The competence and stability of the management were important,' Hafner says.
In the end, Talbot's team got the goldest of goldstamp seals of approval. America's most famous value investor, Warren Buffett, took a 26.3 percent share of the new company through his holding company, Berkshire Hathaway. White Mountains Insurance Group, another company that Buffett holds a stake in, also took a 26.3 percent share.
Talbot says the day he announced that the company had backers was the best day of his working life. 'It's the only time in my career we'll have 1,300 people hugging each other and not one complaint to human resources.'
With the new funding came a brand-new name -- Symetra was picked in an employee contest after they'd struck out with earlier plans for a 'normal name,' because other companies had taken all their favorites, he says. 'We were thinking 'Olympic Life' or something to connect us to a Northwest landmark.'
But the made-up new name reflects the ideas of 'symmetry and balance,' Talbot says, and that seemed to fit.
He recalls the day the investors came to him to ask if he'd run the new company. 'I immediately said, 'Yes, I will.' Then they asked, can you make us a couple hundred million a year? 'Yes, I can. ''
So far, he's come close on redeeming that pledge. Symetra's unaudited financial statements show 2007 profits of $167.3 million, on revenue of $1.59 billion. Profits were up 5 percent over 2006; revenue grew a less robust 1.3 percent.
'Their numbers have been pretty good, and they've been showing sustainability,' Hafner says. 'We feel pretty good about them.'
The pending retirement of all those millions of baby boomers is great news for the company, Talbot says. After decades of putting cash into their retirement accounts, it's time for them to start drawing the money out. Symetra's annuities business can't help but benefit. 'It's the greatest opportunity in the history of the industry, by far.'
'We're seeing very strong sales. We're pretty happy with the current environment and are able to sell and grow as a company.'
Of course, in the Hollywood version of this story, Talbot leads Symetra through a successful initial public stock offering, and everyone gets rich. And in fact, last year, Symetra filed for its IPO. The plan was to sell some 37.5 million shares, raising roughly $750 million to reward the investors who'd put up the cash to form the company.
But in November, the company put the IPO on hold, citing the upheaval in the stock markets caused by the subprime mortgage crisis.
They were smart to wait, says Annie Logue, an analyst who follows IPOs for Small Cap Advisor magazine. 'The capital markets are a mess right now, investors are running scared,' she says. 'When companies do come public, they can't raise the kind of money they once did, and that's not fair to the shareholders.'
Symetra is pretty tight-lipped about whether it plans to refloat the IPO anytime soon, citing regulatory restrictions. But 'being private right now is a good place to be,' Talbot says. 'Just the equity market turmoil -- imagine your day as a public company head, watching your stock fall for no apparent reason. It's nice not to have that diversion.'
So for now, Symetra stays private, leaving Talbot time to focus on his family and his squash game.
And he's getting the last laugh on some of those tech-bubble types who used to scoff at his old-economy insurance company. In March, he was appointed to the board of directors of Concur, a Redmondbased company that's developed software that helps businesses manage employee expenses. And Symetra itself, he says, has adopted new software that allows customers to buy policies in minutes online, instead of spending hours while a salesperson fills out forms.
Talbot says that's 'pretty exciting.'
'It allows us to drive down costs and provide a better product,' he explains. 'We consider ourselves a very high-tech company these days.'
Bryan Corliss is a senior writer at Washington CEO Magazine.
