An alliance for health - Golden State Mutual Life Insurance Co., Maxicare Health Care Plans Inc. in marketing alliance

Black Enterprise, Oct, 1992 by Victoria Chapman

Golden State Mutual Life Insurance Co. and Maxicare Health Plans Inc. have formed a strategic marketing alliance intended to increase the availability of affordable health care. Under the theme, "Together, We Give You More," the two Los Angeles-based companies will sell each other's products nationwide.

Under the terms of the June agreement, Golden State, ranked No. 3 on the 1992 BE INSURANCE UST with assets of $105.6 million, will offer a number of health care products to its individual lifeinsurance policyholders. Golden State also will look to expand its customer base to include small business owners.

Maxicare will offer life insurance and annuity products to its primary clients--employee groups that now use its HMO plans. The health maintenance organization also gains access to Golden State's strong AfricanAmerican client base.

"Essentially, [Maxicare and Golden State] will sell each other's products," says Maxicare spokesman Ed Coghlan.

Before the agreement, Golden State's only health care offering was a supplemental plan for other major medical insurance policies. Now, it can offer Maxicare's comprehensive small group medicalcare plans for employee groups, Max-65--a Medicare supplemental plan for senior citizens-- and other health care products.

The marketing alliance covers California, Illinois, North Carolina and Louisiana, states where both companies do business. "The agreement provides opportunities for both organizations to grow," says Larkin Teasley, president and CEO of Golden State. "[Now] we can provide our market with the comprehensive medical coverage it needs."

Golden State and Maxicare say it is too early to forecast the financial impact of their agreement. But executives at both companies are optimistic. Golden State, which reported a $500,000 operating gain in 1991, suffered a loss for the first three months of this year. A spokesperson said the loss was due to the hiring and training of salespeople to implement the new marketing plan. Maxicare, which had $517 million in revenues in 1991, posted an operating net of $3.3 million in the first quarter of 1992.

Teasley says that this alliance is just the beginning. Golden State is exploring other potential ventures, including credit cards and mutual funds. "It's important for companies [like ours] to realize the large industry to which we belong," he says. "Our aim is to become a financial service firm."

--Victoria Chapman