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Generational Savvy

At 75, family-run Occidental Underwriters shows how a small business can transform an industry

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Occidental Underwriters founder Lawrence Takeo "L.T." Kagawa

   Local business pioneer and Occidental Underwriters founder, Lawrence Takeo “L.T.” Kagawa.


Back in the early 1930s, local businessman Lawrence Takeo “L.T.” Kagawa was convinced Asian Americans in Hawaii were paying unfair prices for life insurance. Companies back then calculated their plans’ premiums using data from Asia that he argued reflected much shorter life expectancies than in Hawaii. Kagawa believed Hawaii’s better sanitation and healthcare conditions meant longer lives, which should be reflected in lower premiums.

The insurance companies didn’t agree. So, in 1933, Kagawa took matters into his own hands: He started Security Insurance Agency, in part to better serve the Asian-American community. The company later changed its name to Occidental Underwriters of Hawaii and 75 years later, still resides in the iconic building on the corner of South Beretania and Piikoi streets. The one that looks like an air traffic control tower.

It’s also still a family business.

“My father had a real sense for people,” says Siegfred “Sig” Kagawa, his son, who retired from the company in 2000. “He didn’t do it to make money. He did it because it was the fair thing to do for people.” The company is now led by Sig’s son, Gordon, as president, and his daughter, Kathy Tawata, as executive vice president.

By surviving into its third generation as a family business, Occidental has defied odds. According to the Small Business Administration, 90 percent of all U.S. businesses are family owned or controlled, but only 30 percent of such businesses succeed in the second generation, and only 15 percent last into the third generation. The company that started with three employees now employs 36 fulltime, not including its agents, who operate independently. The company today has more than 30,000 insurance policies, including life and property/casualty.

True to the spirit of its founder, a key to the company’s success has been adapting to the changing needs of its customers.


1950 Occidental management team

BRAIN TRUST: L.T. Kagawa with his management team, from left, Henry Kagawa (no relation), Goonki Furukawa, Naoyoshi Hayama (L.T.’s brother-in-law), Harold Tateishi. Photo taken in April of 1950 at the Dillingham office.

L.T. Kagawa didn’t set out to start his own insurance company. But no one – not his boss at the Honolulu insurance company where he worked or executives at any of the other insurance companies – shared his point of view that Asian Americans in Hawaii were being charged higher-than-necessary insurance rates.

So Kagawa caught a boat to San Francisco to seek the support of Bank of America founder A.P. Giannini, even though Giannini had never heard of him. He waited in Giannini’s office for the better part of three days until the banker – who had recently bought an insurance company – agreed to meet with him.

Two years later, and after being shown statistics from the state Department of Health, Giannini agreed to give Kagawa’s idea a try. Giannini made Kagawa a general agent for the Hawaiian Islands for Bank of America’s life insurance company, enabling him to start his own company, Security Insurance Agency. “After that, people in Hawaii, no matter what they were [ethnically], could buy life insurance at standard rates,” Sig Kagawa says.

Hawaii Business magazine invites you to comment on our articles and the issues they raise. Comments are moderated for offensive language, commercial messages and off-topic posts and may be deleted. Some comments may be chosen for inclusion in the magazine on the Feedback page.

Aug 7, 2008 03:51 pm
 Posted by  HonoluluJulie

As a local business owner, this article encourages me to continue striving to succeed -- in spite of economic conditions. Entrepreneurism is part of the American dream. We need more of this type of news.

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