June 22, 2004 Silver Spring, Maryland, United States …. [Ansel Oliver/ANN Staff]
While the Seventh-day Adventist Church is well known for many pioneering efforts in bringing the gospel message to a hungry world, a new book tells a lesser-known story: how the church has saved hundreds of millions of dollars by preventing potential insurance losses.
What’s more, the church’s involvement in risk management goes back to the 1930s, making it perhaps one of the first large organizations to utilize this approach, says William Taylor, whose new book, “The Church At Risk,” details “the miraculous story of Adventist Risk Management,” also known as ARM. Major businesses adopted the risk-management model in the 1960s, while the church’s initial US$25,000 investment made it the first denomination to break into the insurance industry.
ARM’s roots go back to a disastrous fire in 1902 in Battle Creek, Michigan. The blaze not only destroyed the church’s Review and Herald publishing building located there, but also spurred church leadership to relocate the world headquarters to Washington, D.C., and the neighboring community of Takoma Park, Maryland. It also prompted an intense assessment of how to protect the real property of the church, since losses to fire and other damage could have an impact on the progress of Adventism.
That assessment led the church to take steps to insure its properties against loss, but, also, to examine how losses can be avoided.
As Taylor notes in the book’s introduction, church members don’t usually respond to offering appeals to donate to the expenses of a worker’s injury, rebuilding costs of a fire-damaged church, or to pay the court-ordered damages in a lawsuit. “When [ARM has] been successful, it’s been able to free up money for the church,” says Taylor.
Under the leadership of William A. Benjamin, the church began looking at potential risks that the organization could face and addressing the issues before they became problems. It was forward-thinking–taking preventative measures to see that things are done right so they don’t cost the organization more in the end.
“A lot of people don’t realize that buying insurance is the most expensive way to deal with risk … about 50 percent overhead,” Taylor says.
The book describes the ups and downs of the church’s financial structure, as well as how he perceives the organization has been divinely blessed.
“Time and again when people have their backs against the wall, when people pray for the Lord’s leading, they succeed. When they got cocky, the fortunes of the organization fell,” he said. “It’s more than a financial story.”
For more information about the book, visit www.adventistrisk.org.
Copyright © 2004 by Adventist News Network.
