Paul Askos, founder of service contract provider Western National Warranty Corp., was the kind of guy who did the right thing, even when it seemed like the wrong thing for business.
For example, in the late 1980s and early 1990s, when actuaries said service contract prices needed to substantially increase to ensure proper risk management and strong insurance underwriting, Askos listened.
He raised the prices of his service contracts to "double, or sometimes triple" the prices being charged by his competitors, said Joe Becker, who worked with Askos from 1978 to 1980 at a company that sold credit life products in suburban Denver. Askos hired Becker as Western National's special projects manager in 1994.
"A lot of [service contract providers] didn't engage actuaries to do futuristic pricing of what things might look like five years or six years down the road," said Becker, now CEO of CNA National Warranty Corp. in Scottsdale, Ariz., which was previously Western National. CNA National is a subsidiary of what is now CNA Financial Corp. in Chicago.
"When you get the pricing right and you're three times the market, [Askos] saw his business diminish by more than half. The place was struggling, and he had to lay people off," recalls Mark Krejci, who got to know Askos well when Krejci became an independent agent selling Western National service contracts to franchised dealerships in 1987.
But through it all, the 5-foot-7-inch Askos held his own, unlike many service contract providers that went belly up during that time, Krejci said.
"Maybe [his company] didn't grow early on as quickly as all the other companies did. But he was a strong partner, and you felt as an agency principal your clients were well taken care of," Krejci said.
"You knew that you'd still be around and your dealers would not be wondering who was going to pay their claims because their service provider was going out of business."
Krejci is president of Continental-National in Tampa, Fla., a company he started in 1993 assisted by a loan from Askos.