How a San Francisco insurance broker transformed race into a "nonissue." - Aaron Richardson owns an insurance brokerage firm

Nation's Business, July, 1991 by Michael Barrier

Aaron Richardson owns a 35-employee San Francisco insurance brokerage called ARISCO (for Aaron Richardson Insurance Service Corp.). He tells a story about what happened last year when a Los Angeles insurance brokerage was seeking a contract with a public agency in the San Francisco area.

A certain percentage of the contract was set aside for minorities, so the Los Angeles brokerage had to present a bid in tandem with a minority-owned firm. The brokerage's executives met, trying to think of a minority insurance firm they could work with. Then one of them remembered that Richardson was about to buy the company he had been running for several years.

"What about Aaron?" he said.

The brokerage's executive vice president--who had known Richardson for some time--was perplexed for a moment. As he later told Richardson, "Aaron, I don't want you to take this the wrong way, but I turned to him and said, 'Is Aaron black?'"

Richardson is, indeed, black, and no one meeting him could doubt that--not that he would want them to. "I've become very comfortable with myself, as being black," he says.

The point of Richardson's story is that the consciousness of color can fade to the vanishing point when people focus their attention on what really matters. His race has been a "nonissue" in his career, he says. "If you walk into a room saying 'I'm black,' that's how you're going to be perceived. I've never really carried that around with me."

Richardson, 48, has built his career by developing self-insurance programs--risk-sharing pools--for physicians and hospitals in California, and, he recalls, "I had to go to a lot of rural areas, where seeing blacks is not a daily occurrence. I've always been received very positively. I was there to talk with them about insurance, and I think they could see that I knew what I was talking about."

Richardson grew up an only child in Akron, Ohio, in a predominantly black neighborhood that he describes as lower-income but "not a ghetto." He was vice president of his senior class at a majority-white high school, then attended Howard University, in Washington, D.C., where, he says, he was exposed for the first time to a large number of "blacks from families who had done very well." He had grown up in Akron at ease in an integrated environment, but at Howard, he says, he learned how to feel more at ease with himself.

After graduating from Howard, he took a job as a clerk in a railroad's legal department, then moved into a succession of jobs with big insurance companies and brokerages. In 1975 he landed where he helped administer a risk-sharing pool for physicians.

As malpractice insurance premiums have skyrocketed, medical professionals have turned increasingly to such programs. Late in the '70s, Richardson set up a self-insurance program for small California hospitals. In 1986, when the hospitals decided to form their own company to administer the program, they hired Richardson--by then a vice president of a major brokerage--to run it. Under his stewardship, he says, the program's assets rose from $15 million to $80 million in three years.

Last year, Richardson bought the company from the hospitals. He will continue to run the risk-sharing pool, under a long-term contract--its assets now exceed $100 million--but ARISCO also offers what it describes as a full range of property and casualty coverage.

Richardson knows that the fastest way for ARISCO to grow would be to take full advantage of the preferences offered to minority firms, but he worries about the long-term effects of such a strategy.

He says that "a lot of minority-owned businesses aren't able to provide the services," and he doesn't want ARISCO to be confused with them. "I want us to be viewed as a professional organization, a quality organization," he says, and only incidentally as a black-owned company.

Still, he can hardly afford to pass up a shot at government contracts with percentages set aside for minority firms. His solution: "We're going to pick one brokerage that we're going to work with on a joint-venture basis; and that's it. We'll always show up with the same organization" when contracts with minority setasides are up for bid.

He thinks that such a continuing association will help to dispel any suspicions that ARISCO has little to offer but its minority status. It will probably mean too that he has to pass up some business opportunities, but he says that can't be helped: "I know that I can't have my cake and eat it, too."