Chugging Along.

No demutualization. No Internet vending. No globalization. While not official slogans of the Guardian Life Insurance Co. of America, these mottoes characterize CEO Joe Sargent's vision for a company that he describes as "contrarian." To Sargent, being contrarian means bucking the trends that pervade the financial services industry.

One such trend involves the conversion of industry giants from mutual to stock companies. "Some people think that insurance companies must grow by acquisition," Sargent says. "If so, they think they need an acquisition currency in the form of stock."

As a counter example, Sargent points to Guardian's purchase of a dental network last year for $100 million in cash. "Cash is still king," he says. "You don't have to demutualize when you have a strong capital base."

On the other hand, there are good reasons for Guardian to remain a mutual company, according to Sargent. "The buying public gets a better deal," he says. "We don't have to divvy up dividends between shareholders and policyholders."

Guardian's Internet strategy is also indicative of its contrarian stance. Its niche market of affluent buyers wants--and is willing to pay for--professional advice on risk and asset management, says Sargent. This militates against selling commoditized products over the Internet.

"Our clients want to use the Internet to check balances, transfer funds, and to communicate with the company," Sargent explains. "We see the Internet as a new way of providing exceptional service after the policy is sold."

Nor does Sargent see the point of selling Guardian products outside the United States. "Globalization is an ego trip," he says. "Other companies think they have to do it because others are doing it. We see plenty of opportunity for growth right here." With that in mind, Sargent is expanding Guardian's network of agents.

"Guardian is making small acquisitions to increase its distribution network," says Dana Mehta, senior financial analyst at Oldwick, NJ-based A.M. Best Co., an insurance industry rating firm. "They don't want or need to acquire a large company, so they don't need stock to exchange in a merger. They have more than adequate growth to chug along the way they have been."

If this makes contrarianism sound like stodginess, Sargent sees financial services deregulation as an opportunity to take advantage of uncharted territory, such as banking. It has also occasioned a company transformation and a new, upfront role for him.

Sargent shepherded a company reorganization that amalgamated individual market operations such as life, disability, and equity, so that the agents would have one point of contact with the company. Only 200 jobs were lost, but the organization went through a period of anxiety.

Sargent admits that he did not react quickly enough to allay the fears of his employees. "I found that if you are going to transform a company, the CEO must have high visibility," he says. "He has to pound away at why we're doing what we're doing. It was six months before I did that."

Once he saw the need to communicate, Sargent took his act on the road, conducting political-style town meetings, complete with Q&A, at Guardian offices around the country. He also invited home-office employees in New York to informal breakfasts. "These people became our apostles of transformation," says Sargent. "They were still anxious about their jobs but rumors stopped running the company."

Reorganization appears to be the order of the day in many insurance companies, notes Mehta. "[But] the company's core life business produces strong earnings," she says, "with 3.5 percent return on revenue in 1998, and 19.7 percent return on equity, which is very good." Good enough to earn an enthusiastic A+ rating from A.M. Best.

JOSEPH D. SARGENT CEO

Guardian Life Insurance Co.

Age: 63

Birthplace: Philadelphia, PA

Education: B.A., Fairfield University

Family: Wife Sheilagh; six children: Mora, Colleen, Joe, Sean, Liam, Bridgett, two married, four single; one grandson: John Joseph; one grandchild on the way.

Hobbies: Boater, fisherman, woodworker, and gun collector. Owns twenty-foot Catalina sailboat, vacation home on Cape Cod. Enjoys sailing, fishing, picnicking with family.

Public service: Treasurer and director, United Way of New York City; trustee, Discovery Museum Foundation, Bridgeport, CT.

Award: Ellis Island Medal of Freedom 

Prior company affiliations: None. "I graduated from college on a Saturday and went to work for The Guardian on a Monday." That was in 1959.

Prior titles: Senior vice president, health insurance; senior vice president, individual life insurance; executive vice president.

On company transformation: "It appears now that a company must constantly change. It is not a walk in the park but a pilgrimage. We must emphasize and repeat what we do best, not what we don't."