Chapter 394 Insurance Company
Hardy toasted and chatted with these people, holding himself with composure that rivaled even members of these established families. In his previous life, Hardy was just a small time businessman, but in this life, after climbing step by step, he had grown significantly.
Moreover, with his knowledge of the next few decades, Hardy saw the potential to surpass these families, so his mindset was quite relaxed.
Giannini and several executives from the Bank of America were also present. Hardy's victory was their victory as well, and their smiles were even more radiant.
The California consortium had long sought political support, but had always struggled. It wasn't until later, with Nixon, that they succeeded in pushing forward their spokesperson for their interests.
While this investment was Hardy's personal investment in Johnson, since Hardy had become a core family within the California consortium, it was essentially a victory for the consortium as well. In future business deals, it would be impossible for Hardy to leave the consortium out.
The only difference now was that the center of the California consortium would likely shift more towards Hardy, and Hardy's influence within the consortium would grow.
After the White House cocktail party, Johnson had a lot more to deal with. Hardy took his leave from Johnson and returned to San Francisco with the California consortium members.
Why San Francisco?
Because after a few drinks, Hardy mentioned 'limited universal healthcare' to Giannini, who immediately recognized it as a major business opportunity and pulled Hardy back to discuss it.
At Giannini's estate.
Giannini, Hardy, and the chairman of Pacific Insurance sat in the study, with Hardy saying, "Johnson asked for my opinion on universal healthcare, and I told him I didn't support it."
Johnson's previously proposed universal healthcare plan was something the group was very familiar with. It had faced great opposition and resistance at the time, with almost no chance of passing because it threatened the profits of all the major corporations.
"I suggested to President Johnson a 'limited universal healthcare' policy. The federal government would allocate part of the budget, the state government would provide subsidies, and citizens would pay a portion of the premiums, with the three parties combining to purchase insurance."n/ô/vel/b//jn dot c//om
Experience tales with empire
"This insurance wouldn't provide full compensation, but would reimburse a limited percentage according to certain rates, with a maximum limit. For example, if you only bought the most basic insurance, the reimbursement wouldn't exceed 50%, and the maximum payout would depend on the policy you purchased. As for how it would be calculated, that's the job of the insurance company actuaries."
"President Johnson was very interested in my proposal because his original universal healthcare idea was too idealistic. Expecting the rich to willingly give up their wealth to support the poor was unrealistic. But this plan didn't touch the rich's profits and still provided some benefits to the poor."
"As for the insurance companies, they could receive funds from the federal and state governments, as well as collect premiums from the public. This business would definitely be profitable. And if some people felt the coverage was too low and didn't meet their healthcare needs, no problem, they could purchase commercial insurance."
"And to support this 'limited universal healthcare,' we could also negotiate policies with the federal and state governments, like tax reductions."
Giannini and the chairman of Pacific Insurance nodded repeatedly as they listened. With this approach, the likelihood of the healthcare policy passing was much higher, and the insurance companies could still profit. It was indeed a good business deal.
"Hardy, how much of a share can you get?" Giannini asked.
Hardy held up three fingers.
"I estimate we can get a 30% share," Hardy replied.
The U.S. had a population of 150 million at the time. A 30% share would cover around 50 million people. Even if they only collected $100 annually from each, it would amount to a $5 billion business. With typical insurance profit margins of 20%-30%, that would be a profit of over $1 billion.
Money is tempting,
Even a banker like Giannini couldn't help but be tempted by this revenue.
"Hardy, what's your plan?" Giannini asked.
Since Hardy had brought this up, it was clear he didn't intend to monopolize the deal. However, Hardy was still the key figure driving the business, and that fact couldn't be changed.
"I have two options: one is for Wells Fargo Insurance to take on the business and then subcontract it to Bank of America and Pacific Insurance."
Giannini and the chairman of Pacific Insurance didn't look convinced.
If Wells Fargo took the first cut, their profits would be greatly reduced, and then they'd still have to do all the dirty work. Why would they agree to that?
"The second option is for the three of us to form a new company, each contributing funds and negotiating the share proportions together to take on the business."
"That sounds like a good idea."
As soon as Hardy finished speaking, Giannini and the chairman immediately agreed.
Equal pay for equal work, after all.
In the end, the three parties agreed to form a large insurance company, with each contributing $100 million. Wells Fargo would hold 40% of the shares, while Bank of America and Pacific Insurance would each hold 30%. The company would be jointly operated by all three.
Why did Hardy hold the largest share? Because he was the key to making the deal happen without him, there wouldn't have been any deal.
The other two not only provided funds but also contributed part of their insurance resources, which was why they each held 30% of the shares.
Wells Fargo was relatively weak in the insurance industry, while the other two were indeed national insurance companies.
As for the specific details, Hardy handed them over to the Wells Fargo team to handle. It was still in the early stages, and the government hadn't passed it yet. The actual implementation would probably take about six months, but it was best to start preparing now.