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When Lincoln speaks, Fort Wayne listens; in northeast Indiana, Lincoln is Lincoln National, Indiana's largest public company.

Any company's chief executive can grab headlines when announcing plans for construction of a new corporate office building. But Lincoln National Corp. CEO Ian Rolland made bigger news when he told Fort Wayne that the company had too many doubts about its hometown's future to make major capital investment there.

Rolland didn't sugar-coat the reasons why the company had decided not to build a $60 million office complex: There were too many doubts about the quality of education and concerns about much of the city's aging infrastructure, particularly the airport. The leadership necessary to build political consensus hadn't emerged, and Rolland said he hoped his announcement would coalesce the community and push it to find answers to lingering problems.

It wasn't the first time Rolland had taken controversial matters into his own hands. In the mid-1980s he joined a group of concerned parents who wanted to desegregate the city's elementary schools by putting in place a system of magnet programs, an arrangement that emphasizes the voluntary transfer or students to schools outside their neighborhoods. Arguing that without good schools Lincoln cannot attract good local talent, Rolland put the power of his company behind the parents' determination. His involvement gave them the backing to file a discrimination suit against the school board.

His concern for education is not limited to Fort Wayne. Rolland joined with other Indiana CEOs to form Commit, a group that testified before the Indiana General Assembly this year seeking an overhaul of the state's education system Among the planks of the Commit platform were initiatives to remove schools from the control of the state and school boards and put more decision-making power in the hands of teachers and principals. In an attempt to bring the pressures of free enterprise to bear on the task of education, parents should be able to choose which schools their children will attend and state and federal funding should follow those children to the schools, Commit members argued.

"We want to throw out the rules and regulations that are impediments to teaching effectively in the classroom," Rolland told state lawmakers.

Rolland says his interest education is not unique among the country's corporate leaders. "Fortune runs business conferences on business and education--and business people from all over are going to them. The head of Procter & Gamble Co. down in Cincinati is head of the Business Education Coalition in Cincinnati.

"You go across this country and business leaders from all over are out in front on education issues. So what I've done here in Fort Wayne may be unique in Fort Wayne, but it isn't unique nationally."

His involvement and habit of speaking his mind have earned Rolland his share of critics. Parents opposed to his school integration plans wondered why a corporate executive was getting involved in the working of a school district in which he didn't reside. After the announcement that Lincoln would not expand its downtown office space, one labor leader called him an elitist who was making veiled threats to move jobs out of the city.

When asked about the reaction some of his statements and actions have gotten, Rolland looks almost surprised. Lincoln's support and its opinions go hand-in-hand, he explains.

"What I've always said is our involvement in the community has got several aspects to it. We support lots of stuff in this community, and I believe we're a positive force," he says. "But one thing you get with our involvement is our views about the community. Some of those may be popular, widely held views and some of them might be not so popular and maybe not so widely held and be controversial."

The influence the company has is massive and difficult to measure. To corporate and political leaders in Fort Wayne, the name Lincoln doesn't conjure up images of the 16th U.S. president. In northeast Indiana, Lincoln is Lincoln National Corp. Rolland, a charming, grey-haired marathon runner with a disarming smile, is the man who oversees the insurance giant. When Ian Rolland talks, lawmakers sit up straight and take notice. Past and current politicians can tell stories of Rolland calling and telling them in no uncertain terms why he's unhappy with something they've done.

"When he decides what he wants done he goes a long way toward putting his influence and power into place to see that it happens," says Charles Redd, a Fort Wayne city councilman. During the 1970s Redd had his share of confrontations with Rolland over a plan Lincoln National formulated to improve housing in the city's low-income neighborhoods. Although it was well-intentioned, Redd argued that it would reinforce the existing inner city and keep minorities from moving to better neighborhoods.

"Rolland did not agree with me and he let me know it," says Redd, who headed the Fort Wayne chapter of the National Urban League when the housing program began. "Ian Rolland has the conviction to say what he believes should be done. And in my opinion he doesn't abuse the power and influence he has."

Rolland may be one of the most powerful non-elected people in Indiana, Fort Wayne Mayor Paul Helmke concedes. "But I'd rather have business and corporate leaders who will speak out. They may not be elected to anything, but they have as much of a right to talk as anyone," Helmke believes. "And Lincoln is an example of a good corporate citizen. Whether you're talking social issues, infrastructure, community involvement--they back up what they say.'

At first glance, Lincoln's CEO has the comfortable, almost-scholarly look of someone who'd be at home on a university campus teaching political science. Looks, however, can be deceiving. Rolland doesn't teach political science classes--but he has taught his share of lessons to politicians.

Lincoln carries so much clout throughout the state because it remains the largest publicly traded company in Indiana (nearly $8.5 billion in revenues) and the seventh-largest insurance holding company in the United States. Net income for 1990 was $191.4 million, or $4.29 per share. That was down from the 1989 net income level of $268.8 million, or $6.06, but still very healthy in an investment year buffeted by a recession.

Lincoln National has five integral pieces: property-casualty, employee life-health benefits, investment products, individual life, and life-health reinsurance. That diversity has helped Lincoln National through tough economic times. A variety of severe storms across the country in 1990 hurt the earnings from property-casualty insurance--income from the division was $90.3 million last year, down 33 percent. But, according to LNC's annual report, the investment products and reinsurance segments had record earnings. The employee life-health benefits segment had its highest earnings in five years.

Lincoln National Corp. has been an imposing force in Indiana since it was founded in 1905. Robert Todd Lincoln, son of the nation's Civil War president, gave permission for the new company to use his father's name. In 1930 Lincoln National's assets topped $1 billion for the first time. In 1956 it became the ninth-largest insurance company in the country and that same year, Ian Rolland came back to Fort Wayne to join Lincoln.

A graduate of Fort Wayne's North Side High School in 1951, he went on to DePauw University in Greencastle. He left the University of Michigan in 1956 with a graduate degree in actuarial science. There was no indication that the local boy who came home to work at Lincoln National would one day become a vocal advocate for integration and better schools.

But over the years his concern for the city emerged. In the mid-1960s Rolland and his family became involved in the East Wayne Street Center, a community-service center that serves low-income families on the city's east side. His work with other similar causes grew along with his influence in the community.

Rolland became LNC president in 1975 and CEO in 1977. Soon after that he instituted a procedure whereby Lincoln National would donate to charity up to 2 percent of its pretax net income averaged over three years. The averaging "washes out some of the fluctuations that result from changes in earning," Rolland explains. The formula provides $5 million to $6 million annually for charities.

Groups that have benefited from the program include the Fort Wayne AIDS Task Force, which has received about $50,000 since 1985. More than $400,000 has gone to the nationwide Insurance Industry AIDS Initiative. Lincoln Life Improved Housing has invested more than $2 million in providing good housing to low-income families. The generosity isn't limited to Lincoln's corporate base or national causes. Each of the company's affiliates around the country manages its own corporate contribution program. For example, American States Insurance in Indianapolis--a Lincoln subsidiary and the largest property-casualty company in Indiana--has given to a variety of charities, including the Greater Indianapolis Progress Committee, the Indiana University Foundation and the Indianapolis Urban League.

"We have decentralized the authority for running those programs because I've always felt that the people in the local communities really know best how to allocate those dollars," Rolland says. "I'd have to say that one of the most frustrating things with fund-raising is when you go to a company for a contribution and they've got to go to headquarters to get it approved.

"I've always thought it was amazing that companies will let local managers make a million-dollar decision about how to run a business, but they won't let them give away a hundred dollars in a corporate contribution."

An investment by a Japanese insurance firm in Lincoln National Corp. last year is part of the company's positioning for the future, Rolland says. Two years after first approaching Lincoln, Dai-ichi Mutual Insurance Co. agreed to invest $312 million over two years, giving it 9.6 percent of Lincoln's oustanding common shares. Dai-ichi, the world's third-largest insurance company, also agreed not to buy any more stock in Lincoln for 25 years.

The move gave Lincoln the capital to pay off debt and to improve the company's bottom line. "In this environment of the S&L crisis, there are concerns about the banking industry and concerns about the insurance industry," Rolland says. "It's very important to us to say to our customers that we really do have the strength to back up our guarantees."

The arrangement also gives Lincoln entry into Japanese markets. "We expect a strategic relationship will develop in the marketing of group health and life products, in the marketing of pension products and in the investment area," Rolland says. "We would expect through the Dai-ichi relationship for a flow of business to come to us."

K&K Insurance Group Inc., a Lincoln National affiliate, has been ahead of the curve in a growing area of the insurance business--covering sports and other recreational activities. K&K's revenues increased to $50.6 million in 1990, up from $33.3 million the year before. Its clients include the National Association of Stock Car Auto Racing, ski slopes, fairgrounds, professional basketball, football and baseball teams and the Super Bowl.

"They do a lot of visible stuff, so it's an exciting part of this business," Rolland says. "Although it's a relatively small part of Lincoln National, it is a rapidly growing segment of the marketplace. So we have a lot of high expectations for their increasing importance in the Lincoln National Corp."

While concentrating on ensuring the company's future is a good one for its clients and investors, Lincoln has made sure the present is pretty good for employees. Those who work in the Fort Wayne offices have a four-and-a-half day workweek. Employees who have been there at least five years and who perform competently are guaranteed a job, even if their positions are eliminated. The policy was put in place partly to eliminate concerns after some downsizing in the early 1980s, Rolland says.

"What we're saying is when someone's been around here five years they've exhibited a certain degree of loyalty by staying here. And we have a responsibility toward that," he continues. "This is the company's response to employee loyalty, and we think they build on each other."

His concern for employees and the community was one of the reasons Rolland was surprised at the reaction of some of the people in Northeast Indiana when Lincoln National announced it wouldn't be building in downtown Fort Wayne anytime soon.

"If we could take time to sit down and talk about the issues, I think they would find my views on many, many issues closer to theirs than many corporate people. I guess I was surprised and I regret it; I still regret the reaction that labor people had to what I said," Rolland says now.

"One of the reasons I was surprised was I didn't think any of the issues were very new. There wasn't anything urgently new about anything we said. I talked about infrastructure--well, the airport has been an issue around here forever. We've been talking about education issues for a long time."

While Rolland hasn't been afraid to take sides on controversial issues, some local executives grumble privately that he can afford to do it because Lincoln is isolated from local financial pressures.

"Maybe we're isolated a bit from some of the potential impact of the stands we take," Rolland admits, "but I like to think business can carefully think through tough issues. And where a business has a legitimate point of view, then a business can express its view. I guess I have enough faith in the reaction of a community--that if you are careful and you have thoughtful views and you're not trying to be a renegade, then most people will accept that.

"They don't demand you be with them on every single issue, but I do think they demand you be responsible. And I think they have every right to do that."

Fort Wayne City Councilman Mark GiaQuinta remembers that Rolland was a behind-the-scenes player last year in negotiations to merge two of the city's hospitals, The Lutheran Hospital of Indiana and St. Joseph Medical Center. "His insistence and persuasion was instrumental if not a determinate," says GiaQuinta, who is president of St. Joseph's local governing board.

During his time in government, GiaQuinta says, he has both cursed and praised Rolland. "In that role you have to remember that he has so much influence in large part because of his position, not because Ian Rolland is the font of all power and wisdom. He's able to keep it in perspective."

There are those in the community who say Rolland wields too much power. In the early 1980s a move to bring minor-league baseball to Fort Wayne struck out when Rolland and other community leaders wanted a baseball stadium to be built downtown, while government officials were willing to back construction of a ballpark on the city's north side.

In the mid-1980s Lincoln backed a move that would have prevented the city's parks department from coming under control of the mayor's office, but the push died at the General Assembly when Lincoln let people know it no longer supported the move. Some state lawmakers complained that he had left them hanging. Lincoln officials later said the matter had become too partisan, but some legislators believed Lincoln didn't want to make enemies at the General Assembly.

In the past year, the issue drawing the most controversy and vehement disagreement has been Lincoln National's decision not to expand its downtown Fort Wayne offices. Many political leaders had hoped the new structure would serve as an anchor for revitalizing the southern edge of the city's downtown. One city planner said later that his mouth dropped open in disbelief when he heard Rolland's announcement.

But it was Rolland's statements that prompted Helmke to tap him as head of the city's South Central Revitalization Task Force. The group recently completed an analysis of what the greatest needs are in Fort Wayne's south-central region, home to many of the city's oldest neighborhoods.

The task force based its study in large part on an analysis of the area done in 1990 by the Washington, D.C.-based Urban Land Institute. Rolland recently turned a list of recommendations over to the mayor's office. Plans call for more low-cost housing and repair, along with other efforts to preserve the residential flavor of the area.

"The committee took into account citizen views because this wasn't just window dressing. We really were honestly looking for citizen input," Rolland says.

His eyes light up when he talks about the revitalization effort, as they do when he discusses education and the reasons he fought for desegregation. "I have believed for a long time that one of the aspects of a quality education is racial balance and diversity in the kinds of people kids associate with in school buildings," he explains.

"I just think that the more young people can interact with people who are different than they are, the better we're all going to be. I really believe that, and that's why I would dispute anyone who says I'm an elitist. I'm flat out just the opposite."
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Title Annotation:insurance
Author:Skertic, Mark
Publication:Indiana Business Magazine
Article Type:Cover Story
Date:Jun 1, 1991
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