here - Wortham

W
ortham is the largest insurance
broker headquartered in Texas
and one of the largest independent insurance
companies in the United States. With more than
500 insurance professionals in five statewide
Few companies can lay claim to 100 years of history. Wortham proudly crosses
offices placing insurance with more than
that threshold in 2015.
How did we reach this milestone? If you know anything about the people of Wortham,
that’s an easy question to answer. There is a special distinction about the way Wortham conducts
business, and our abiding integrity and tenacity can be traced directly to our founder,
Gus S. Wortham. Armed with a vision, and supported by the best professionals in the
business, he launched a success story that has endured for 100 years – and counting.
To mark our Centennial, we prepared the following summary to introduce you
to our history and our accomplishments. These pages chronicle our growth into one
of the nation’s largest independent brokers, and they help define the character of
more than 500 employees and Managing Directors who today serve Wortham clients
throughout the world.
Many things have changed over the past 100 years, but some elements remain
constant. Wortham people have always been the best at what they do, and their professionalism is
matched by their total commitment to answer client needs with superior solutions and service.
Today, as always, our clients know they can count on Wortham.
To Our
Friends
And Valued
Clients
300 underwriters across the globe, Wortham is a
recognized leader in insurance, risk management
Please join us in celebrating our Centennial.
and employee benefits. Each year, Wortham places
more than $1.2 billion in premium for clients that
include Fortune 100 companies, public and private
firms of all sizes, and high-net-worth individuals.
Known as the “Flag of the Republic,” this distinctive banner flew over the independent country of the Republic of Texas
from 1836 until U.S. statehood in 1845. With deep roots in the Lone Star State, Wortham salutes the powerful
spirit of freedom and independence that continues to inspire our company and our people to this day.
Richard M. Blades
Chairman
1
Turn back your clock to July 1915, and make yourself known to the
secretary occupying one of four desks in Room 416 at the Union
National Bank Building. The hand-painted letters on the glass doorway proclaim
the offices of John L. Wortham & Son. After noting your name and purpose of
your visit, the kindly secretary (who earned a weekly wage of ten dollars)
introduces you to the partners laboring to get their fledgling company
up and running.
Rocky Mountain
National Park
established.
Babe Ruth hits
first home run.
Wortham
Insurance:
The Early
Years
Patent granted for Raggedy Ann doll.
HMHS Britannic (sister ship
to RMS Titanic) takes to seas.
Boston Red Sox
win World Series.
First stop sign
installed in
Detroit.
The title of the firm’s namesake founder – John
Lee Wortham – was a mark of honor rather than military rank. Col. Wortham was
a well-connected farmer and businessman in Limestone County in Texas. After
a successful tenure directing the recently established Texas prison system,
Col. Wortham earned key political appointments, serving as Texas Railroad
Commissioner and Secretary of State for Texas Gov. Oscar B. Colquitt. These
political offices launched enduring friendships that the colonel and his son
Gus would parlay into an insurance agency they planned to launch in
downtown Houston.
Born: Billie Holiday,
Orson Welles,
Ingrid Bergman.
Average cost of
a gallon
Congress establishes
of milk:
U.S. Coast Guard.
$0.36.
Cost of a U.S. stamp: $0.02.
2
Wortham Timeline
of Key Events
History records the first client of John L. Wortham
& Son as John C. Williams, a Houston attorney who
purchased a policy for insurance on household goods.
The $12.50 premium earned the partners a princely
commission of one dollar and eighty-eight cents.
One hundred years later, the firm founded by
Col. John L. Wortham and his son Gus would direct
annual premium placements of more than one billion
dollars and stand as one of the nation's largest
independent insurance brokers.
Col. John L. Wortham
Gus Sessions Wortham
1912
1915
1915
1916
1917
1918
1919
1923
State Insurance Board of Texas hires
Gus Sessions Wortham. The Austin office
includes E.R. Barrow, Tom Barrow, Marvin
Collie and B.F. Carruth. (All would play
key roles in Wortham’s career.)
Armed with his early insurance
training, Wortham arrives in
Houston to work at John R.
Young Insurance Agency.
Monthly pay: $100.
JULY 26: Gus and his father establish
John L. Wortham & Son with $5,000.
Gus tells Col. Wortham: “Let me have
the benefit of your name, influence and
prestige – and I will do all the work.”
B.F. Carruth joins the company as a
one-third partner in John L. Wortham
& Son.
Gus Wortham volunteers for
service in the Great War, but
myopic eyesight prevents him
from pursuing his dream of
being a pilot.
Gus Wortham achieves the rank of 2nd Lieutenant
while commanding an aerial repair squadron. He
recounts how his war experience “enabled me to
uncover an ability of which I seemingly had been
unaware, to work with men – to lead them, to gain
their respect, to inspire them, to make things go.”
Gus Wortham returns from the war
and rejoins John L. Wortham & Son,
which has doubled its office space
and now includes a bookkeeper
and typist.
The firm establishes an accounting department equipped
with the novelty of a mechanical bookkeeping machine for
general ledger entries. Offices are moved to the Bankers
Mortgage Building (Pictured here on page 2). Also on the same
floor: offices occupied by J.W. Link, Sr. and J.W. Link, Jr. – both
of whom would play key roles at John L. Wortham & Son.
3
With John L. Wortham & Son
acting as the organizer, Gus
Wortham and his investment
partners launched the American
General Insurance Company in
1926. After the “Black Thursday”
crash, Wortham guided both
firms safely through the Great
Depression.
4
Insurance was one of many business interests
of Col. Wortham, but from seed capital of only $5,000, it
ultimately provided the bedrock for the family’s fortunes.
Father and son had good cause to question their timing
after a massive hurricane devastated the Gulf Coast in
1915 shortly after the firm opened for
business. But while the natural disaster
decimated many businesses, it proved
a boon to the new company. Courtappointed custodian work on behalf
of a number of claimants yielded
commissions valued at more than
$1,000. Hurricanes rarely provide a
silver lining, but the ill winds of the
1915 disaster helped get John L.
Wortham & Son up and running.
Within months, the Worthams were
joined by B.F. Carruth, who gained a
one-third share of the business, and
moved their firm to larger offices.
Years later, Gus Wortham credited
Carruth as "the smartest insurance
man I've ever met." Connections
forged through friendships led to the firm writing its
first surety bond, a $165,000 guarantee for McKenzie
Construction Company, and the firm had enough
business to open a San Antonio office. The growth
plans were interrupted in 1917 when America entered
Early in the 1920s, the Worthams and Carruth developed a new fidelity bond
to insure the employees of 12 Federal Land Banks established throughout
the country. The work earned the partners a sizeable $10,000 commission – a record
amount for a Houston insurance bonding agency – and provided the financial base
for starting an insurance company that would eventually write
multiple lines of coverage. Col. Wortham did not live to
see this vision realized (he died on Nov. 5, 1924), but his
son and Carruth pressed ahead with the plan. Assisted
by E.R. Barrow (who joined the firm in 1924 and would
become Gus Wortham's closest associate) and backed by
Houston leaders such as Judge James A. Elkins, J.W. Link Sr.
and J.W. Link Jr., the vision became a reality on May 8, 1926.
From Austin, Judge Elkins sent a telegram with only four
words – THE BABY IS BORN – to alert his partners that the
State of Texas had officially chartered the American General
Insurance Company. The figurehead on the new company’s
stationery was George Washington, the nation's first general (and, as some noted at
the time, a leader who just happened to share the same initials as Gus Wortham).
the Great War, and B.F. and Gus were eager to enlist.
But Col. Wortham noted that B.F. was married and had
a family, which made Gus the logical choice to leave the
firm and head to Europe. By war’s end, he would earn
the rank of 2nd Lieutenant in leading ground support
for an aerial squadron based
in France.
Wortham
Insurance:
Growth
Milestones
With the Armistice signed, Gus
Wortham returned to his brokerage
desk in Houston and devoted full
energy to growing the firm. The
decade of the soon-to-be-roaring
'20s saw John L. Wortham & Son
handle work for Kirby Lumber
Company, Houston Lighting & Power,
and the interests of Jesse H. Jones,
one of the recognized architects of
Houston’s growth. Property insurance
for the city's well-to-do represented
the bulk of the firm's early business.
B.F. Carruth
If you scanned the newspaper for
advertisements, you would find
one noting John L. Wortham & Son’s new offices at the
Bankers Mortgage Building at Main and Capitol and its
specialization in “all forms of insurance, fidelity and surety
bonds." The building would remain the company’s home
for nearly four decades.
The “birth” of American General launched a unique arrangement that
would last for nearly 40 years. Under the terms of a management contract,
John L. Wortham & Son would manage the affairs of the new insurance company.
At the time, American General was owned by many shareholders in Houston and
throughout Texas – but technically did not have any employees. Anyone doing
work for American General received a paycheck from John L. Wortham & Son,
which was financed by the 15% override that the firm received on all
American General income.
“When our company was awarded the
contract to build the San Jacinto Monument
in 1936, our founder, Warren S. Bellows, went
to see Gus Wortham about a surety bond.
With the support of John L. Wortham & Son, W.S. Bellows
Construction built this landmark monument dedicated
to those who fought for Texas' independence on this
key battleground. Thus began a steadfast relationship
with Wortham that continues to this day. Beyond our
respective 100-year histories, I believe that W.S. Bellows
Construction and Wortham Insurance share something
equally remarkable and enduring: namely, an abiding,
time-honored commitment to quality and customer
service. Happy 100th Anniversary to our longtime
friends at Wortham.”
Laura D. Bellows
President and Chairman of the Board
W.S. Bellows Construction Corporation
(founded in 1914)
1924
1926
Mid-1920s
1929
1939
1940
1942
1946
1949
1952
1953
Col. John L. Wortham
dies on Nov. 5 at the
Rice Hotel.
Acting as organizer for noteworthy investors who included the Links, Jesse H. Jones
and the law firm of Vinson, Elkins, Sweeton and Weems, John L. Wortham & Son
obtains a Texas charter for American General Insurance Company. From Austin,
Judge Elkins marks the event with a four-word telegram to his partners: “THE BABY
IS BORN.” Under a contract that remains in effect until 1965, John L. Wortham & Son
receives a 15% override as underwriting manager for American General.
John L. Wortham & Son expands
nucleus of key employees to
include E.R. Barrow, Tom Barrow,
Carle Aderman and T.F. Smith – all
of whom gain ownership shares.
OCT. 24: The New York Times
credits “Black Thursday” as the
“most disastrous decline in the
biggest bad broadest market
in history.” Houston remains
relatively unscathed.
Gus Wortham’s expense
account records his first
airplane ticket: St. Louis
to New York City for
$49.84.
B.F. Carruth sells 30% interest
in John L. Wortham & Son, with
Link & Company assuming
ownership. Gus Wortham
retains 55% interest.
Employees of John L. Wortham &
Son don uniforms and go to war.
Others assume patriotic duties at
home, including service as air raid
wardens.
American General enters
postwar years as the only
firm in the South to write
all forms of insurance.
Owners learn that a
1% interest in John
L. Wortham & Son is
valued at $15,000.
Total payroll at John L. Wortham
& Son includes 241 employees –
most of whom perform work for
American General.
Gus Wortham elected director of
the U.S. Chamber of Commerce,
a post he would hold for five years.
5
As the Great Depression
gripped America, Texas
fared better than many
states, and Gus Wortham
employed "special agents"
to sell shares in American
General to insurance
agencies throughout the
region. In a report to shareholders, he called
1934 a watershed year for the company
because it proved that American General had
passed "through the formative stage" and
"established itself as a permanent factor in
the business." In the middle of the decade,
a letter distributed to Houston homeowners
encouraged them to do business with
“a Houston institution.” The letter folded out
to a skyline panorama that highlighted a score
of buildings insured "wholly or in part by
Houston's Own Fire Insurance
Company." Luminary
properties included the
Gulf Building, Rice Hotel,
Houston Chronicle Building,
several banks and government buildings, the electric
company, the City Auditorium,
two movie theaters, three
department stores and the
6
Farmers Market. The mailer noted that
American General was a company run by a
group of "conservative, dependable Houston
businessmen who take a keen personal interest
in the affairs of the company." Directors were
the city's elite: John Henry Kirby, Jesse H.
Jones, Col. Joseph W. Evans, and Judge James
A. Elkins. When the Houston Chronicle in 1934
reported Gus Wortham's election as
president of the Houston Chamber
of Commerce, it lauded him as a
"thoroughgoing Houstonian." In his
address to Chamber members in
1935, Gus Wortham ticked through
the biggest projects on his agenda.
Topping the list was promoting the Centennial
of Texas and the opening of the San Jacinto
Monument being completed by W.S. Bellows
Construction Corporation.
the boards of the Houston Symphony and
the Rice Institute, and prophesied that the
city “could build something unique which
will attract international attention.” He even
helped ensure his prophecy by eventually
co-chairing an effort to secure funds for
what became the Astrodome.
Gus Wortham took a keen
interest in the design of a
new building to house both
John L. Wortham & Son and
American General. Opened
in 1965, Wortham Tower
continues today as the
headquarters for a global
leader branded under a
single name: Wortham.
Gus Wortham’s company was
unscathed by the “darkest years” of the
Depression, when the number of businesses
in Houston flourished rather than declined.
Remaining profitable during World War II,
Wortham entered the decade of the 1950s
determined to grow American General via
business mergers. The strategy worked – and
in 1958, American General directed a life
Gus Wortham’s additional priorities
for the Chamber included support for the
Fat Stock Show (precursor to the Houston Livestock Show and Rodeo), and a comprehensive
flood control program for Buffalo Bayou. A
colleague summed up Gus Wortham's ability
to mesh business, friendships, connections
and politics: “Mr. Wortham...got things done
that nobody else could.” Gus Wortham sat on
operation reaching from coast to coast with
“insurance in force” of nearly $2 billion. The
Federation of Insurance Counsel named Gus
Wortham its Insurance Man of the Year in
1958 – validating the national standing of
both the man and his business pursuits.
In 1963, Gus Wortham began pursuing the Maryland Casualty Company, one of
the largest companies in the fire and casualty
industry. Observers likened the proposed
transaction as “a minnow attempting to
swallow a whale,” but Gus Wortham believed
Maryland Casualty was exactly the type of
operation that would boost American
General to true national prominence. After
business negotiations failed in December
1963, Wortham quietly orchestrated the first
hostile takeover of an insurance company in
U.S. history. For much of the next year, a
blackboard mounted in the 10th floor coffee
room of John L. Wortham & Son offices kept
a running tally of the number of Maryland
Casualty shareholders who favored a business merger with American General. When
the smoke from the takeover effort cleared,
American General owned 97.4 percent of
the outstanding stock of its much
larger Baltimore-based competitor.
In the wake of
the Maryland Casualty
merger, Gus Wortham
was convinced that
American General
needed wider access
to capital markets to
succeed in the competitive property and
casualty industry – and he put plans in
motion to cancel the management contract
between the insurance company and John
L. Wortham & Son. In 1965, the board of
American General terminated the contract
by paying John L. Wortham & Son more than
$1.5 million. At that point, the 26 managing
directors of the brokerage firm faced a true
“fork in the road” in their careers. After due
deliberation, the team split neatly in half –
with 13 electing to remain brokers with
John L. Wortham & Son, and 13 moving
forward as employees of American General
under the direction of Gus Wortham. The
net effect was to clear the way for both
American General and John L. Wortham
& Son to pursue their core business
strengths – and for John L. Wortham & Son
to focus exclusively on brokerage work for
a fast-growing list of clients.
1958
1959
1963
1964
1965
1967
1972
1976
1986
1987
Gus Wortham named
Insurance Man of the
Year by the Federation
of Insurance Counsel.
Gus Wortham donates a 1.5% interest
in American General to the Wortham
Foundation, a private entity he creates
to support cultural activities and parks
development in Houston.
Gus Wortham begins earnest pursuit
of Maryland Casualty Company, one
of the giants of the U.S. fire and
casualty industry. Merger discussions
end abruptly in December.
After Gus Wortham leads the first hostile
takeover of a major U.S. insurance company, American General gains a 97.4%
ownership in Maryland Casualty – and
opens the door to new sources of capital.
The board of American General votes to pay $1,515,018
to cancel the contract with John L. Wortham & Son. Half
of the 26 partners elect to remain with John L. Wortham
& Son, and half – including Gus Wortham – elect to
continue their careers at American General.
John L. Wortham & Son opens a satellite
office in the Clear Lake area to serve NASA
and provide personal lines of insurance
for the nation’s original astronauts.
New clients include
Houston Natural Gas –
which later changes
name to Enron.
Gus Wortham – revered
as “a builder of Texas” –
dies on Sept. 1 in
Houston Methodist
Hospital.
Firm moves away from “concentrated ownership” to a new
broad-based business model practiced by leading law firms.
Chairman Fred Burns summarizes key advantage: “The value
of offering outstanding people ownership opportunities is
key to the acquisition of the best talent available.”
Juilliard String Quartet plays
first public concert (Mozart,
Bartok and Beethoven) at the
magnificent new Wortham
Theater Center.
7
Emerging from the management contract with American General and setting
its own course put John L. Wortham & Son – now known simply as “Wortham” –
on the path to becoming what it is today: a nationally recognized firm, serving clients
around the world who represent almost every business sector. From energy, retail
and construction to healthcare, technology, sports and entertainment, Wortham is
recognized as one of the country's most innovative leaders in the insurance industry.
Clients range from local, regional, global and Fortune 100
companies, to individuals looking to protect personal assets
and provide a financial legacy for future generations.
Although they no longer shared a
balance sheet, the two companies remained
in close contact, and a number of John
L. Wortham & Son partners served on the
board of American General. In 1965, the
employees of both firms moved into a new
24-story, 300,000-sq.-ft. building on Allen
Parkway facing “the recently beautified
Buffalo Bayou,” according to the Houston
Chronicle. In a special section, the newspaper lauded “the powers”
behind the successful enterprises occupying the new building, and
cited Mssrs. Wortham, Barrow, Woodson, Link and Judge Elkins for
building not only an insurance giant but also the City of Houston.
Into the
Modern Era
The underpinning for Wortham’s remarkable growth
is as vital today as it was in 1915: namely, the process of
sharing ownership in the firm with the business professionals
who contribute to its success. In its 100-year history, fewer
than 200 individuals have served as Managing Directors (Wortham’s official name for
its owner partners), and more than 120 remain active today. The stability of the firm’s
ownership is unrivaled in the insurance industry, and the depth of experience and
tenure among Wortham’s professionals helps promote long-standing client relationships
that are often measured in years or even decades. A leading example is Bellows
Construction, a century-old firm which is now under the fourth-generation leadership
of Laura Bellows. Bellows Construction is responsible for many of Houston’s most
notable structures, including the San Jacinto Monument, Wortham Theater Center
and Texas Children’s Hospital – and has been a Wortham client since the 1930s.
Gus Wortham officially announced his retirement
during an American General board meeting on November
2, 1972. One year later, Houston Mayor Louie Welch
designated “Gus Wortham Day.” Now requiring constant
use of oxygen to combat emphysema, the insurance
patriarch focused on fine-tuning the charter of his Wortham
Foundation to support local civic and cultural groups,
including funding a feasibility study to create a parkway
through downtown along Buffalo Bayou. On Sept. 1, 1976,
Gus Sessions Wortham died in Houston Methodist
Hospital. The man credited as “a builder of Texas” is
buried in the small Magnolia Cemetery near the Wortham
Tower and the Gus Wortham Memorial Fountain along
Allen Parkway.
8
Zero-Gravity
Insurance
Rockets with thousands of
pounds of thrust may have
propelled NASA original
astronauts into space –
but it was Wortham that
kept things grounded with
personal lines for the
“Mercury Seven” and
their families.
More recently, Wortham’s
long association with
NASA included arranging
coverage and marine
surveys to help make
the Space Shuttle Trainer
a permanent part of
Space Center Houston.
Stability and continuity are also visible in the leadership of the company.
During its 100 year history, only six people have served as leaders of the company:
Gus Wortham, J.W. Link, Jr., Allen H. “Buddy” Carruth, Fred C. Burns, Robert B. Hixon,
and Richard M. Blades.
1992
1999
2000
2001
2004
2007
2007
2008
2011
2015
TODAY
George Harvey painting
of “Downtown Houston
– 1915” acquired
for the Wortham
headquarters.
Austin, Texas: Consolidated
Insurance Agency, Inc.
merges with Wortham,
expanding the firm’s footprint
beyond Houston.
Fort Worth, Texas:
the Brants Company
and Fringe Benefit
Management Inc.
merge with Wortham.
San Antonio, Texas:
Eichlitz Dennis Wray
& Westheimer Insurance
Agency Inc. merges
with Wortham.
Wortham establishes
office in Dallas, Texas.
San Antonio-based
Crosby, Bigelow, Fitzgerald
Insurance Associates Agency,
Inc. joins forces with Wortham.
Dallas, Texas: Texas
AGA Explosives, Inc.
merges with Wortham.
Hurricane Ike devastates Houston area and
inundates Wortham’s headquarters on the
top floors of Wortham Tower along Allen
Parkway. Working from a satellite-assisted
emergency facility, Wortham’s team quickly
handles client claims.
Houston-based
RBK Services, LLC,
specializing in
employee benefits,
joins forces with
Wortham.
To mark its Centennial, Wortham
makes the largest corporate gift
in its history to establish the
Wortham Insurance Visitor Center
at Buffalo Bayou Park along
Houston’s Allen Parkway.
Wortham remains a private partnership and now stands as the largest insurance
broker headquartered in Texas, with more than 500 insurance professionals in five
statewide offices placing insurance with more than 300 underwriters across the globe.
Wortham is a recognized leader in insurance, risk management and employee benefits,
with clients including Fortune 100 companies, public and private firms of all sizes,
and high-net worth individuals.
9
Freed from its connection to American General in the
1960s, Wortham built momentum as a retail insurance agency
and began to form distinct practice areas to serve specific
industries. (See summaries starting on page 16.) With headquarters in Houston, “energy” became a significant source
of the firm’s revenue growth. Clients seeking Wortham’s
counsel and expertise came from every sector of the industry:
from downstream, midstream, power generation and upstream
companies to sole-proprietor wildcatters and broad-based
global giants. Energy-related clients have accounted for a
sizeable portion of the firm’s revenues in the modern era, but Wortham
is remarkable for its expertise across a wide swath of businesses. The
company is a recognized leader in construction, manufacturing, marine,
professional services and employee benefits consulting. As a full-service
broker, Wortham offers its wide range of clients a full menu of services.
Any diagram of the growth of the energy industry will include
sharp ups and downs that reflect the sector’s volatility. Wortham, with its
strong ties to energy clients, endured repeated boom and bust cycles
along with other firms with headquarters in Houston, the energy capital
of the world. In a bid to expand service to new industries that were
driving the regional economy, the firm’s management under Chairman
Fred Burns pursued a new strategy of diversification. The business
model that emerged saw the firm actively pursue statewide expansion
by merging with leading independent brokers throughout Texas who
had built strong reputations in servicing middle-market companies
in a wide range of industries. In effect, the diversification would move
the firm horizontally (across multiple industries) and vertically (within
specific industries, such as energy).
Although the firm had previously opened small satellite offices
during the Gus Wortham era, these offices remained open for a short
time only to serve specific clients. During recent times, Wortham has built
a cohesive network of offices that share resources and collaborate on key
assignments. Using a modified “growth through acquisitions” strategy
10
employed by Gus Wortham, Wortham added new capabilities and
forged a statewide network of offices by merging with recognized leaders
throughout the state. Additions to the Wortham team included:
Austin
Fort Worth
San Antonio
Dallas
Houston
Consolidated Insurance Agency
The Brants Company & Fringe Benefit
Management Inc.
Eichlitz, Dennis, Wray & Westheimer; Crosby
Bigelow Fitzgerald
Texas AGA Explosives, Inc.
RBK Services (Benefits)
Houston
When Gus Wortham petitioned his
father to join him in a new insurance
venture, he envisioned an agency
that would serve companies driving Houston’s
growth. One hundred years later, the nation’s
fourth-largest city has cemented its reputation
as the “energy capital of the world” while building a robust regional economy fueled by a wide
range of industries and businesses, many of
which maintain headquarters in Houston. One
of these firms is Wortham, which houses its
statewide command center in the 24-story
Wortham Tower along Allen Parkway. Surveying
the bustling complex and its 2 million sq. ft. of
commercial space today, it’s hard to imagine the
skepticism that greeted news in the 1960s that
John L. Wortham & Son planned to move its
headquarters from downtown Houston to a
largely undeveloped area two miles west of the
central business district. To mark the building’s
dedication in March 1965, both the Houston
Chronicle and Houston Post published special
sections that lauded Gus Wortham and other
business leaders for the roles in promoting
Houston’s continued growth. Nearly 50 years
later, the firm’s headquarters was severely tested
when Hurricane Ike decimated the region on
Saturday, Sept. 13, 2008. The storm caused
billions of dollars in damage, and it rendered
offices in the Wortham Tower a tangled mess of
useless computer
equipment and
waterlogged paper
files. Thanks to an
emergency
preparedness plan
and a satellite-assisted
mobile facility, it was
business as usual for
Wortham on the Monday after the devastating
storm as Wortham professionals assisted clients
with storm-related claims. The cover headline in
Leader’s Edge magazine later summarized the
Wortham team’s performance: “When Ike
struck, Wortham was ready.”
11
Austin
Stephen F. Austin reportedly was not
an early fan of the “remote location”
chosen for the capital of the Republic
of Texas. But statehood in 1845 changed the
war hero’s mind – and started Austin on the road
to becoming the thriving metropolis it is today,
complete with 1.5 million residents and the
corporate headquarters of industry giants such
as Dell Inc. and Whole Foods Markets, Inc. The
roots for Wortham’s Austin office trace to 1928,
when Jack Chiles and Artie McCallum founded a
firm that grew into Austin’s largest independent
insurance agency. In 1960, the duo joined
12
Dallas
forces with another market leader – Heidrick,
Bowman & Wommack Insurance – to form the
Consolidated Insurance Agency. Under the
leadership of its founding principals and the
management of Tommy Wommack and Bess
Roberts – whose client service spans five
decades – Consolidated forged enduring
relationships with clients such as Austin White
Lime, Louis Shanks Furniture and the law
partners of what is now Graves Dougherty
Hearon & Moody. With Austin’s growth came
increasing demands for wider access to more
insurance markets and deeper technical
expertise. Peter Pincoffs, who succeeded
Wommack as managing partner of Consolidated
in 1989, had gained a first-hand appreciation for
Wortham’s technical skills when he began his
insurance career in 1974 in Wortham’s Houston
office. When Wortham’s Fred Burns and Bob
Hixon approached Pincoffs and his partners
about a potential merger, the combination
made perfect sense. “We saw it as a good match
of independent firms that shared a common
approach to serving clients’ interests,” Pincoffs
says. Consolidated joined the Wortham
partnership in 1999, and Rob Bridges now
serves as managing director of the
Austin office.
Grinning beneath his signature hat,
J.R. Ewing always painted Dallas as
a special place for doing business.
The television myth was definitely grounded in
reality, because Dallas has long been a center
of commerce for energy companies and other
firms of every size and specialty. When Wortham
began building its regional network of offices,
it went looking for merger candidates among
established Dallas firms. “For various reasons,
we never found a firm that matched our criteria.
That’s when we decided to improvise, and start
a Dallas office from the ground up,” recalls
Randy Schuler, a member of Wortham’s
executive committee who led the search effort.
The key to Wortham’s grassroots strategy proved
to be John Deal, a top producer Schuler and
Wortham Chairman Fred Burns recruited from
a competing broker in Dallas. With Deal at the
helm, Wortham opened the doors to its newest
office in November 2004 – and soon attracted
noteworthy clients such as James Avery Craftsmen and one of the nation’s top developers of
commercial real estate. Four years later, Wortham
merged with Dallas-based Texas AGA Explosives,
adding a large book of explosives-related
business to the Dallas office. Today, even
competing brokers direct their clients to the
unique set of explosives-related skills offered
by Fred Bangs and Texas AGA, which continues
to operate under its original name. The Dallas
office continues to maintain long-standing relationships with a long list of clients that includes
Whole Foods Markets, Inc., a Fortune 250 foods
behemoth that relies on Wortham for multiple
lines of coverage. Regardless of industry
specialization or insurance challenges, clients
know they can depend on Wortham’s Dallas
office for superior service – and much,
much more.
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Fort Worth
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As World War I came to a close,
Harry Brants of the Royal Canadian
Air Force parked his biplane in its
revetment and pondered what he would do in
civilian life. Recalling the time he spent training
at Camp Bowie just west of Fort Worth, Brants
decided to return to the city. In 1926, he opened
an insurance agency and was soon joined by his
two brothers and two other entrepreneurs. The
Brants Company took flight as an independent
broker representing commercial accounts in the
Fort Worth area and throughout west Texas.
The firm established a reputation for quality in
serving bellwether clients such as TP Coal & Oil,
Rowan Drilling Company, Kimball Foods and
Buddies Supermarkets. Harry Brants managed
the agency until his death in 1968, when the
Fort Worth Star-Telegram printed an obituary
noting Brants “had arrived in town as a brash
WW I airman and left as a respected business
leader who will be dearly missed.” Under the
direction of Bob Ferguson, who joined the firm
in 1972, The Brants Company continued to grow
and became the first tenant in City Center’s landmark Sundance Square project in 1981. In 1999,
Wortham approached Ferguson about joining
forces. “What stood out for me was the way
both of our firms were independent companies
committed to long-term relationships with their
clients,” he says. Clients of The Brants Company
San Antonio
included not only a strong stable of energy firms
but also local hospitals, Berkshire Hathaway’s
Acme Brick Company, supermarket chains and
wholesale food operations. The firm joined the
Wortham partnership in 2000; two years later,
Leo Taylor joined the firm after serving as a
senior officer at one of The Brants Company’s
large public clients. Taylor now manages the Fort
Worth office, serves on Wortham’s executive
committee, and oversees the company’s
employee benefits consultancy that works with
over 1,000 clients statewide. The flight plan for
success in Fort Worth remains unchanged:
provide clients with superior service, and good
things will continue to happen.
Wortham’s San Antonio office was
founded on a long history of
independence forged by several
firms with deep roots in the Alamo City. The tale
starts before the Civil War when E.A. Florian
established the first insurance agency in
San Antonio that eventually became The Eichlitz
Company. When the regional economy recovered from the war years, other insurance
companies opened their doors – including an
independent brokerage known as Dennis-Hinkle
and Wray. In 1941, these two firms consolidated
their offices (and their collective 100+ years of
history) in a new firm known as Eichlitz-Dennis
& Wray specializing in “all lines of insurance”
and an ability to “speak the oil man’s language.”
In 1993, the firm merged with Westheimer
McCallister & Wolf to form Eichlitz Dennis Wray
& Westheimer Insurance Agency Inc. Eight years
later, this firm joined the Wortham partnership
and – in the words of San Antonio director Bob
Wray – “elevated the game” in San Antonio by
opening new doors to larger clients while
providing middle-market clients with strong
technical support. “The Wortham business
model clearly works,” Wray says. “Everyone is
willing to drop what they’re doing to help a
client. The sum of the parts is clearly larger.”
Next up for San Antonio: continued work with
oil and gas clients participating in the Eagle
Ford shale boom. “Companies in the energy
sector are very pragmatic about their work,
and they appreciate someone who knows what
they are doing and who shoots straight with
them. They know they can depend on Wortham
in San Antonio to protect their people and their
assets,” Wray says.
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With more than 120 Managing Directors among its
500+ professionals in five offices, Wortham is fulfilling
the vision of its founder Gus Wortham: an independent insurance
agency offering clients superior services and industry-leading
expertise. Although a number of
national and international firms have
approached Wortham over the years
to investigate possible partnerships
or a merger, Wortham has remained
steadfast to a commitment to remain
independent. The reasoning is
simple: clients and prospects alike
respect that Wortham has only a
single ambition – namely, to serve
the interest of the client. Wortham’s
business model of independent
ownership rewards its professionals primarily through ownership
interests and salary – which is distinct from the standard industry
practice of rewarding employees with commissions on “sales.”
In each of its professional service areas, Wortham is recognized for a depth of expertise that is unrivaled in the
insurance industry. The following is a snapshot
of Wortham’s core specialities today:
Wortham
Insurance:
Aimed at
the Future
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“Other brokers house
their marine specialists
in places like New York or
Los Angeles. Wortham’s
specialists are in a central
location here in Houston,
and that’s good for us.
Casualty
Wortham’s Casualty Department
is a center of technical excellence.
The group includes marketing and
claims professionals who work
with a majority of Wortham clients
on Primary Casualty (Workers
Compensation, General Liability,
Automobile Liability), Excess Casualty
and Umbrella, International Casualty,
Aviation, Environmental, and small-to
middle-market commercial accounts.
Many of the firm’s Casualty professionals previously worked as insurance
underwriters, and their technical
backgrounds help them negotiate
the broadest possible coverages.
Specialties within the group include
captive insurance programs, portfolio
loss transfers, aviation coverage, and
workers compensation – an area in
which Wortham places more premium
than any other broker in Texas.
Wortham is widely recognized as a
national leader in securing pollution
and environmental coverages, with
placement features designed
specifically for third-party pollution
liability, on-site cleanup of pollution
conditions, environmental contractual
indemnities, disposal sites, and
business interruption from a pollution
condition.
Property & Business
Interruption
Wortham’s Property Department is
responsible for property coverage
marketing and servicing, including
claim handling. Marketing specialists
focus on catastrophic programs that
include Tier 1 wind exposure and
earthquake exposure for clients along
the Gulf Coast, Atlantic Seaboard, and
in California and other earthquakeprone areas. These marketing specialists have access to all major property
and specialty carriers worldwide. The
department provides clients with
access to the latest-generation modeling and analytical tools including RMS
modeling, Pictometry and MapPoint,
and its claims handling experience
includes many catastrophic windstorm,
earthquake and complex business
interruption claims.
Employee Benefits
Energy & Marine
Wortham Benefits delivers the best
value in the marketplace for more
than 1,000 clients of every size and
specialty. The department’s independence allows it to work with a wide
range of carriers and vendors to
develop superior solutions for health
and wellness benefits programs.
Wortham Benefits operates a “call
center” and was one of the first
companies to offer a private health
insurance “exchange” to help clients
respond to health care reform. The
firm also works with a large number
of clients to develop and manage
their self-insurance programs. The
deeply talented team includes an
in-house ERISA attorney, medical
director, pharmacy advisor, wellness
coordinator, communications
specialist, implementation manager
and reporting analysts.
Wortham’s depth and strength in energy
and marine date to the earliest years of
the industry. Today, these two disciplines
account for more than half of the $1.2
billion in premium placed by the firm
each year. Energy clients range in size
from small exploration and production
independents to giant multinationals
with operations in every segment of the
industry. The majority of Wortham’s
energy professionals hold technical
backgrounds in insurance underwriting –
and their skillsets allow them to obtain
the lowest pricing and the broadest
coverage and terms regardless of market
conditions. Special areas of distinction
within the department include control
of well and property capabilities, and
superior claims management by the
professionals who handle marketing
responsibilities and negotiate policy
wording. Risk & Insurance Magazine
regularly includes Wortham professionals
among its list of industry-leading
“Oil & Gas Power Brokers.”
Much of our work involves
procurement contracts written
by the government – and
Wortham’s analysis has
repeatedly ‘educated our
customer’ on insurance issues
to the point that an amendment
is released. That’s an outcome
that improves the procurement
process and protects our
company at the same time.
Happy birthday, John L!”
Joe Vaughan
Chief Executive Officer
Ocean Shipholdings, Inc.
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“Five years ago, a fire
broke out at our chemical
purification, processing
and packaging plant in
Columbus, Wisconsin,
and we lost about 40%
of our facility.
The Wortham team in Houston
was a crucial and supportive
part of our disaster recovery
plan. They played a key role in
assuring that all claims were
paid promptly, and they helped
us get back to full production
in 20 days. We wouldn't be in
business today without Wortham
– so please mark us down as ‘one
happy customer.’ It's easy to see
why you're celebrating your
100th anniversary!”
Steve Quandt
Executive Vice President
Columbus Chemical Industries
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“You can buy insurance
from anyone, but Wortham
understands this is a
relationship business.
Professional Indemnity
Wortham’s Professional Indemnity
Department places annual premium of
more than $100 million, easily marking
the group as a national leader in securing coverage in five areas: director
and officer liability; fiduciary liability;
employment practices liability; crime;
and cyber liability. As an independent
company, Wortham accesses underwriters throughout the world, including
major carriers based in the United
States, Canada, London and Bermuda.
Carrier solvency and quality are critical
to these highly sensitive coverage lines,
and Wortham’s Security Review Committee carefully monitors and confirms the
financial health of our clients’ carriers.
Our team includes liability specialists
who have helped settle numerous complex claims, including one of the largest
fully insured fiduciary settlements ever
secured by a Texas-based company.
Our executive liability claims services
include the initial reporting of claims
to the appropriate carriers, coordination
of claims reporting and monitoring, and
interfacing with attorneys representing
both the carrier and the insured. Claims
are typically handled by the same
Wortham marketing technicians who
negotiated the liability coverage – which
provides clients with an important
advantage in negotiating settlements.
Risk Management
Wortham works in tandem with clients to
minimize their cost of risk, which includes
retained losses, insurance premiums,
and administrative and risk management
expenses. To achieve the lowest cost of
risk, this department analyzes retained
losses and develops loss forecasts. It also
designs strategies that minimize collateral requirements and other ancillary
expenses. Wortham's team of experts
has extensive experience in reviewing
contracts to uncover potentially harmful
issues. Since the structure of insurance
and indemnity contracts can impact the
design and viability of clients' insurance
programs, the department conducts an
in-depth review of each contract to provide improved protection for our clients.
Fire Protection
& Life Safety
Wortham offers safety and loss control
solutions that can lower the long-term
cost of risk. Life safety consulting
services assist clients in improving
workplace and customer safety,
mitigating injuries and illnesses, and
integrating safety management into
their overall business strategy.
Wortham’s consultants are experienced
in providing a wide range of services,
from regulatory review and compliance,
training curriculum development, safety
prevention strategies and safety program development. The department’s
fire protection consultants have
extensive experience with a wide
range of industries, and they provide
critical loss control services and ensure
that proper protection designs and
programs are in place. The collaborative
effort helps reduce customers’ property
loss potential, which is a key driver in
insurance costs.
Environmental
Wortham offers deep expertise in
environmental insurance, and it uses
overall market scale to provide clients
with a competitive advantage in placing
coverages with more than 300 leading
insurance carriers. Specialization is key
to serving the complex needs of clients
in a wide range of industries, and it
allows Wortham to properly respond to
coverage challenges that might otherwise be overlooked or underweighted.
The same team that markets and
negotiates coverages is also heavily
involved in the claims process. The end
result is an effective and cost-efficient
risk management program distinguished
by superior service.
Surety Bonds, Fiduciary,
& Crime
Wortham’s surety professionals handle
20,000+ bonded obligations for more
than 400 companies. In the oil and gas
industry, the team is highly experienced
with a complete range of surety bonds:
license, permit, complex assurances,
financial guarantee, court-condemnation bonds, and private plugging &
abandonment bonds. Wortham also
handles oil and gas compliance bonds
for all state and federal agencies (e.g.,
TX RXR, BOEM, BLM, BIA and others).
Wortham works with every major surety
company as well as specialty markets
serving the oil and gas industry, and
active involvement with surety
organizations allows Wortham to
arrange for bond execution on a
same-day basis in every major U.S. city.
In the event that claims consultation or
resolution is required, Wortham relies
on the Surepath interactive bond
processing service – an online tool
that allows clients to obtain summary
reports on all account exposures and
access a database with copies of all
outstanding bonds.
Personal Lines
& Life Insurance
Wortham offers a specialized practice in
personal insurance that provides clients
with customized, comprehensive packages
to meet their unique requirements and
goals, including family limited partnerships
and trusts. Wortham's team of seasoned
experts provides hands-on guidance on
personal property and automobile policies,
including homeowners, secondary vacation
homes, high-rise condos, single or multiple
autos and personal aircraft as well as collections of antiques, fine art, jewelry, wine,
antique or collector autos, and other vehicles. Wortham professionals also handle
coverage for watercraft and yachts, farms
and ranches, family offices, workers compensation for household staffs, and executive personal risk management. To provide
additional protection, Wortham handles
liability policies for personal umbrellas that
range from $1 million to over $100 million,
and secures group excess policies for
clients in designated groups such as
physician groups and legal firms.
They are highly flexible, and they
provide us with the best resources,
regardless of where they are based.
Like Whole Foods, they are a Texas
company – and that carries weight
with us, since we are all about local.
I could describe Wortham as ‘old
school’ or charming – but whatever
it is, it works, and I’m very comfortable with it. They get me what I
want without beating up the
insurance carriers, and those
carriers have genuine respect for
Wortham. I do, too.”
Margot Roth L’Heureux
Global Director of
Risk Management
Whole Foods Markets, Inc.
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“Wortham’s biggest differentiator
comes down to ‘people.’ We place a high
value on technical expertise, and our private
structure lets us take a long-term perspective
in growing our firm around the best people
in the industry.” – Rob Bridges
What Wortham
means to me...
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“When it comes to knowledge, experience and work ethic, I’ve never worked
with a better group of people. My colleagues are like family, and they make the
work day enjoyable.” – Marla Daniels
“No one ever talks about ‘my client.’ It’s always about ‘our client.’ Since all the
owners and future owners are paid off the bottom line in accordance with their ownership
of the firm, we all stand ready to help and assist each other.” – Bob Hixon
“My career in insurance spans 44 years – and I’ve
never seen another company like Wortham. We are
populated by bright, competent people, and the firm’s
commitment to clients and employees is nothing
short of stellar.” – Ralph Hamm
“Wortham people look at insurance and client service as an avocation,
not a vocation. They let the job define their hours rather than the other way
around. I wanted to be a part of this kind of team, and I’m proud that we have
made a continuous contribution to the performing and visual arts communities
in Houston.” – Jeff Cross
“I consider myself blessed to have shared a significant portion of my life with
people of integrity who pursue excellence in their work. This is a highly competitive world, but in my 27 years at Wortham, we have operated a prosperous business and
slept well at night. No one could ask for more from a chosen career, and I owe sincere
thanks to everyone who has forged the heritage of this company.” – Jim McCann
“The best things at Wortham are our people. They don’t fit into a box. That’s why
we are so successful: everyone has the enthusiasm and the skill to get the deal done.
They create – and they make things happen.” – Chad Dodd
“I was a Wortham client before I joined
the firm – so I have observed our client
relationships and service delivery from both
sides. As a Wortham ‘insider,’ I can appreciate the
true source of our attentive and supportive service:
a structure that encourages collaboration rather than
competition within the firm. That’s a rare phenomenon
in our industry.” – Jim Gleaves
“Within hours after Hurricane Ike, we were up and working, unlike
lots of other firms, and client CEOs came by to see how we had done
it. They saw something beyond our satellite systems and emergency trailer.
Watching our people at work, they saw a genuine esprit de corps. I believe
that spirit has always defined Wortham.” – Charles Flournoy
“It’s a remarkable network of people. The culture in San Antonio is more relaxed.
Houston tends to work on big accounts with short fuses and placements that involve
London. Here, we are traditional middle-market underwriters. But when we need help
with a client, there is nobody who is not willing to drop what they’re doing and help.”
– Bob Wray
“Telling the history of Wortham involves telling the history of Houston.
With clients like the Port of Houston Authority, City of Houston and the Metropolitan
Transit Authority, we’ve worked with the groups that built Houston into what it is today.
And we’re continuing to work with clients that will represent the future of the city.”
– Randy Schuler
“When customers have a concern or a question or a serious problem,
a Wortham team member will always be there with a quick and appropriate
response. And without exception, we always put the customer’s best
interest first.” – Bert Guempel
“I had several job opportunities when I first moved to Houston – and
Wortham stood out as the best insurance firm in town. Ambitious professionals
who have an entrepreneurial spirit and a ‘will to succeed’ gain an opportunity to pursue
ownership and share in the long term growth of the firm.” – Russell Thomas
“I joined the Navy to serve a larger cause. When I left the service, I didn’t
want to lose that feeling of being part of something meaningful. Wortham
fits that bill. I’m proud that I’m part of a company that has helped make Houston
what it is today, and continues to serve the needs of an ever-changing city.” – Gavin Hurd
Gus Wortham’s vision for
Houston included “something
unique which will attract
international attention.”
Wortham’s founder led an effort to secure funds for what became the Astrodome, the first
domed stadium that was called “the Eighth Wonder of the World.” In addition to providing
bonding for the construction of the facility, Wortham provided insurance for the first tenants:
the Houston Oilers of the Luv Ya Blue era.
“When we learned that one of our clubs
was pulling back on brownwater insurance
in the United States, we worried about
what that would mean for our coverages.
Within a matter of days, Charles Flournoy at Wortham helped us
identify a new club and arrange a seamless transition to a new
underwriter. In our business, we steer our customers in the right
direction. Wortham does exactly the same thing for us.”
Stephen Huffman
President
G&H Towing
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The Wortham Insurance Visitor Center at Buffalo Bayou Park
Leaders Edge magazine has noted how the Wortham name runs deep in Texas
civic life because of the work of the Wortham Foundation, created by Gus Wortham
and his wife Lyndall, a longtime volunteer and community activist in Houston. Since its incorporation, the foundation has helped fortify Houston as a leading
U.S. center for the arts, medical research and education initiatives.
Well-known recipients of significant contributions from the
Wortham Foundation have included the Wortham Theater Center
(opened in 1987 as the home of the Houston Ballet and Houston
Grand Opera), the Houston Museum of Fine Arts, the Houston
Symphony Orchestra, the Wortham Theatre on the University of
Houston campus, and the Wortham IMAX Theater at the Houston
Museum of Natural Science. Today, Wortham handles the insurance
needs of many of the region’s leading arts and non-profit groups –
including the Houston Livestock Show and Rodeo. Gus Wortham was an early and ardent
supporter of the rodeo, which has provided more than $350 million to support
scholarships and educational programs for Texas youth since its inception. Scores
of Wortham’s managing directors and employees have served the
non-profit organization in volunteer and committee leadership
positions over the years, and Wortham Managing Director
Jack A. Lyons will serve as chairman of the board of the Houston
Livestock Show and Rodeo in 2015.
To mark its centennial in 2015, Wortham joined with leading
underwriters and continued its heritage of community philanthropy
with the largest gift in the company’s history to underwrite the primary
gateway to Buffalo Bayou Park, a $45 million public amenity taking shape
along Allen Parkway fronting the north side of Wortham’s Houston headquarters. When the Wortham Insurance Visitor Center opens in 2015,
it will become part of a ribbon of greenbelts and outdoor facilities to
Former Wortham Chairman
be enjoyed by Houston residents and visitors for generations to come.
Allen H. “Buddy” Carruth
Wortham offices in Austin, Dallas, Fort Worth and San Antonio are
served as the president of the
also supporting their communities to mark the centennial year in a
Houston Livestock Show and
meaningful and enduring way.
Rodeo during the 1970s.
Wortham:
Paying it
Forward
When it opens in late 2015, the
Wortham Insurance Visitor Center
(center of rendering on next page)
will serve as the gateway to Buffalo
Bayou Park – and commemorate
Wortham’s centennial for generations
to come. Leading underwriters joined
Wortham in making the substantial
gift to the Buffalo Bayou Partnership.
Thank you for joining Wortham in celebrating the 100-year history
of our company – and for being part of our future as we continue building
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on our heritage of commitment and superior service to our clients.
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Seasoned Experts. Comprehensive Solutions. That’s Wortham.
EXECUTIVE COMMITTEE
Houston
HOUSTON
Wortham Tower
2727 Allen Parkway
Houston, TX 77019
713/526-3366
Austin
AUSTIN
221 West Sixth Street
Suite 1400
Austin, TX 78701
512/453-0031
Dallas
DALLAS
5950 Sherry Lane
Suite 500
Dallas, TX 75225
214/740-6000
Fort Worth
FORT WORTH
1600 West Seventh Street
Fort Worth, TX 76102
817/336-3030
San Antonio
SAN ANTONIO
131 Interpark Boulevard
San Antonio, TX 78216
210/223-9171
Richard Blades
Chairman
Bob Hixon
Chairman Emeritus
Charles Flournoy
Vice Chairman – Technical
Randy Schuler
Vice Chairman – Development
Peter Pincoffs
Vice Chairman – Texas Network
Leo Taylor
Vice Chairman – Fort Worth-Employee Benefits
Robert Wray
Managing Director – San Antonio
Phil Bair
Managing Director – Manager, Professional Insurance
Brian Welch
Managing Director – Manager, Casualty & Small Commercial
Chad Dodd
Managing Director – Sales & Promotion
Michael Ruehman
Managing Director – Manager, Marine & Energy
Jim McCann, J.D.
Managing Director – Manager, Commercial Accounts
www.worthaminsurance.com
Wortham, L.L.C., General Partner
John L. Wortham & Son, L.P.
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