A prominent Lee County farmer, John Tucker Harris received little attention filing for a pre-insurance application and why should he? Such requests rarely make the news. But this one should have.
In 1946, Harris’ submission was Policy Number 1, the first for a company that 76 years later would become a household word — Alfa Insurance. What a difference three-quarters of a century makes.
Today with core operations in Alabama, Mississippi and Georgia, Alfa and affiliates provide insurance and financial services in 11 states for more than a million customers. Based in Montgomery, its property and casualty companies serve more than 700,000 policies. There are 353 service centers with more than 2,300 customer service employees.
For the past 50 consecutive years, Alfa has been classified as “Excellent” by AM Best, an agency that rates insurance companies on the financial health of the organization. “Fifty years is great,” says Alfa Insurance Executive Vice President, Operations, Tommy Coshatt. “But the only reason we are not more than 50 years is because they did not rate us before then.”
The insurance mainstay story spans 101 years. In 1921, the Alabama Farmers Federation (AFF) was organized by a small group of farmers who joined forces to provide fire protection for rural residents. Alfa was an offshoot, which grew, expanded and prospered.
With a century of experience, Alfa also excels in skills not immediately tangible — the art of advocacy. “We enjoy a rich legacy and relationship with the AFF,” says Coshatt. “For 100 years we have advocated for farmers, in the state house and nation’s capital.” He adds, “Alfa’s presence is in all 67 Alabama counties with infrastructure in place at county boards and organizations.”
He continues, “We are a grassroots organization that continuously lobbies for farmers and their needs.” But Coshatt cautions, it is not easy. “There is an ongoing challenge for insurance companies to make customers understand what they have, what they are buying, and what they need. Insurance is not a one-size-fits-all solution.”
Conditions change, affecting the insured and the insurer. The key for Alfa is to compensate policy holders fairly while maintaining company solvency. In recent years, both entities have faced never before seen challenges. Russian-Ukrainian war, a global pandemic and skyrocketing prices were not covered in Insurance 101, nor learned on the farm.
“Everything is going up,” says Michael Oglesby, owner of Triple O Farms in Lowndesboro. He cites the high cost of farming, including fertilizer prices, fuel costs, inflation, shipping issues and more. An Alfa policy holder for decades, Oglesby adds, “I hear pundits say the economy is going to take off. I don’t believe the pundits.”
But the Lowndes County farmer remains positive. “I try to be optimistic,” he says, referencing his 350 head of cattle and 12 poultry houses, accommodating over 350,000 chickens. “As farmers we have to remain positive. We are always waiting and hoping for better markets.”
On the insurer side, Alfa’s Coshatt is also concerned about the economic outlook. “I don’t see any changes in the near future. It depends on who you listen to or what you read, but I believe we are in this for a while and it impacts all segments of our operation.
“From an insurance perspective, we look at economic indicators every quarter. We examine our needs, rates and premiums and, if needed, make adjustments to remain solvent.”
Farmer and insurance companies agree, insurance is as vital as rain. Over the years, Oglesby has filed for lightning damage, roof repairs, building fires and more on his 800 acres owned and 300 leased.
Five years ago, the farmer’s tractor was stolen. He never saw it again. Alfa bought him a new one. To a farmer that is a big deal.
“When I started farming back in 1974, a good tractor costs $8,000 to $10,000,” recalls Mike DuBose of DuBose Farms in Bank, in Pike County. “Today that same tractor price is $200,000.”
Keeping said tractor and other equipment running is also a challenge. “Diesel fuel is killing us,” adds DuBose, who farms 1,200 acres of row crops. “Years ago diesel was considered trash fuel. Now it’s a dollar more a gallon than gasoline.”
He notes, “I have been with Alfa since I have been farming (46 years).” The Pike County farmer recalls a recent lightning damage settlement for a poultry house. “Our adjustor (Chris Chandler) is knowledgeable, prompt and has an agricultural background. He knows the business. Give him a bill and he pays it.”
Though farming is its legacy, through the decades Alfa moved into all aspects of insurance. Regardless of the need — commercial, business, life, homeowners, auto, and of course, farm — the Montgomery-based insurer has a policy plan.
Alfa has paved huge inroads into home, auto and other coverages, but the roots are farm based. The company covers a broad range of farming ventures, but not all. “We provide coverage for buildings, dwellings and machinery, but we do not insure crops,” says Jeff Helms, Alfa’s director of public relations and communications. “We insure the shed but not the crops in it.”
Escalating farm costs are not the only challenge for the state’s insurance giant. Alabama’s deer have proven a worthy foe. “Deer claims are very steady for auto insurance claims,” adds Helms.
In 2021 Alfa auto policy holder deer claims totaled 5,012 resulting in about $23 million paid to policy holders. Incidentally, the top four Alabama counties where the buck stops here — occasionally through a windshield — are Lamar (188), Montgomery (166), Walker (157) and Clarke (153).
What deer are to auto insurance, water damage is to home policies. Busted or leaking pipes often leads Alfa’s payout field in home insurance claims. This excludes weather claims, which is a misnomer, because in Alabama you cannot exclude weather, especially in the insurance business.
According to Coshatt, because Alabama is so geographically diverse, every region has a different weather signature. “Of course hurricanes often lead the way in claims from coastal counties,” he says. “But central and northern sections have tornado alley and hail damage.”
And then came COVID, Alfa’s perfect storm. Coshatt notes, “The last two years have challenged us just like everyone else. In addition to the coronavirus, we experienced an increase in catastrophic storms. Our challenge was keeping employees safe while meeting the needs of our customers. Storms don’t stop because we are in a pandemic.”
Looking back at the company’s history, the vice president notes, “Yes, our heritage is rich, and we are proud of it, but where the rubber meets the road is how we serve and perform today.”
Emmett Burnett and Julie Bennett are freelance contributors to Business Alabama. He is based in Satsuma and she in Auburn.
This article appeared in the September 2022 issue of Business Alabama.