In 1979, Stephen Hilbert and David Deeds started the Security National of Indiana Corporation to acquire and manage existing life insurance companies. Four years later, after several acquisitions and mergers, the company changed its name to Conseco. Assets at that time were around $3 million. In 1986, Conseco shares began trading on the New York Stock Exchange. When cofounder Deeds left the firm in 1988, assets had grown to $3 billion. At that time, Hilbert became company president and chief executive officer.
During the 1980s and early 1990s, Conseco’s explosive growth came through the aggressive acquisition of other insurance companies, often through highly leveraged transactions. By drastically cutting personnel and transferring home office operations to , Conseco reduced operating expenses by avoiding duplication of services. By the early 1990s, Conseco operated eight major insurance subsidiaries in six states.
Critics charged that Conseco had too much debt, overstated profits through complex accounting practices, and had little tangible net worth. There were also concerns about extensive ownership of Conseco’s stock by its subsidiaries. Conseco’s records were investigated in 1991 by a congressional subcommittee looking into the financial reporting practices of the insurance industry. A private sector accounting standards firm, the Financial Accounting Standards Board, also reviewed Conseco’s books and found nothing wrong.
Conseco earnings increased 16-fold from 1986 to 1992, and its stock price continued to climb. The company’s $15 billion in assets in 1992 made it the state’s second-largest insurance company and fourth-largest corporation. Following more acquisitions, Conseco became a Fortune 500 company in 1996.
The company and Hilbert became benefactors of the arts and other civic enterprises in Indianapolis. At the height of the company’s influence, , home of the beginning in 1984, was renamed Hilbert Theatre in 1996 following a gift of $10 million from Hilbert. The new fieldhouse that replaced Market Square Arena was known as Conseco Fieldhouse from 1999 to 2011 after the company purchased naming rights (see ).
In 1997, Conseco’s revenues reached $6.85 billion. The company purchased Green Tree Financial for $6 billion the following year. This deal resulted in heavy losses.
By April 2000, earnings fell far below expectations. Conseco’s debt climbed to $8.2 billion. Hilbert and Rolland Dick, chief financial officer, resigned under pressure.
In June 2000, Gary Wendt, who had been an executive at General Electric, took control of the company and announced restructuring plans. During the following two years, Wendt succeeded in reducing company debt by $2 billion, but in October 2002, he resigned as CEO, though he remained on the board.
Restructuring talks continued with creditors. Conseco, however, could not recover. In November 2002, the company experienced quarterly losses of $1.8 billion, and In December, it filed for Chapter 11 bankruptcy.
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