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Smith Family Funeral Homes of North Little Rock announced Monday that it acquired American Home Life Insurance Co. of North Little Rock, expanding its central Arkansas family-owned business into life insurance.
President Jeff Smith purchased the business from his aunt, Anne Powell-Black. Effective immediately, it will be renamed Cyrus Life Insurance, a name inspired by the biblical figure King Cyrus.
“In the same way that God used Cyrus as a shepherd, we hope to use Cyrus Life Insurance as a way to help guide fellow funeral home owners to long-term success using the same successful strategies we have developed in our funeral homes,” Smith said in a news release.
Smith said in an interview on Monday that he’d been discussing the deal with his aunt, who had been eyeing retirement, for years. Smith said that meeting Kirk Babb, an industry veteran and former president of First Guaranty Life Insurance Co. in Ashdown, sealed the deal, and that Babb will run the place day-to-day, serving as its president.
The deal brings two businesses founded by Smith’s late grandfather Clifford Smith under Smith’s ownership. Smith said he “had a strong desire to continue what my granddad started.”
“We’ve been very successful with growing the funeral homes and figured out some successful business strategies that I think will translate very well … to help us grow the insurance company,” Smith said.
Smith joined the family funeral business in 2006, and the business acquired its second funeral home in 2008. Four more acquisitions followed throughout central Arkansas, the most recent being Little Rock Funeral Home, purchased from Brad Leggett, for $1.7 million in July.
Smith envisions the insurance company growing through acquisitions as well, but also organically. He said the firm is well positioned in the pre-paid funeral and final expenses industry, and he hopes that positioning will be attractive to insurance company owners looking to sell.
Smith explained how the pre-paid funeral and final expenses policies work.
People pay funeral homes before their deaths. The funeral homes, which can’t hold the money, use it to buy life insurance policies worth the same amount. The claims are paid to the funeral homes upon their customers’ deaths, and that money covers funerals and other final expenses as the customers intended.
Smith said he’ll invest heavily in the insurance company and bring in new technologies. “Through the success of the funeral homes, I have the capital and the resources to beef up the financials of the insurance company and grow the insurance company in a way my aunt wasn’t able to,” he said.
Smith said insurance firms must be well capitalized so that they can pay claims even as premiums are paid out over a long period of time. They can’t sell policies if they don’t have the pay-out in the bank.
A year from now, Smith sees Cyrus Life Insurance partnering with more funeral homes in Arkansas and surrounding states. He said he’ll share with these partners “more or less the trade secrets” that helped his funeral homes gain success.
Why? Because he doesn’t consider them competitors, and more well-run funeral homes mean more people pre-paying for funerals and final expenses and the insurance firm doing more business.
Smith aims to begin offering traditional life insurance policies in 2022 to the same people who are buying the pre-paid funeral and final expenses policies the firm already sells. He said the funeral home business is “highly relationship driven” — with families using the same funeral home over and over again — because they trust that home. He believes families will be interested in traditional insurance policies offered by the people they already trust.
Trust is something that’s worked in Smith’s favor before. He said his father, John Smith, introduced him to many in the industry and he was able to capitalize on his father’s reputation to acquire more funeral homes.
“Other owners started calling us and asking us to buy their business,” Smith said.
That began in 2008, when the Priest family asked the Smiths to buy what is now the Smith Westbrook Funeral Home in Beebe in 2008. “And then it just kind of kept happening,” he said.
Smith said the Priests didn’t have children who wanted to take over their business. That was the case for the other funeral homes, whose owners trusted him to keep them locally owned.
Smith said his family’s funeral home business has grown because “much like my granddad, I’m an entrepreneur. I’m a builder. I’m going to build. And so I just want to build smart.”
His parents owned the Smith North Little Rock Funeral Home and he grew up in the business. “When your family owns a funeral home, that’s kind of your second home because the funeral business is 365 days a year. And so, you know, I grew up around the funeral home always really thinking that’s where I would end up,” Smith said.
So he earned his funeral director’s license and intended to enroll at a mortuary school, but Smith’s father suggested he pursue a master’s degree in business administration instead.
Smith graduated from the University of Arkansas at Little Rock, where he majored in small business management, then from the University of Memphis in 1998.
“Then my dad dropped the bomb on me and told me I wasn’t welcome to come work in the family business. He said, ‘You need to go work somewhere else and figure out if this is really for you, plus you’ll grow up a lot, and you’ll make your mistakes somewhere else, and you’ll be more respected by the employees here if you do come back to the funeral home, which was really, really good advice.”
So Smith started a mortgage business with his cousin. They worked together from 1999 to 2006.
“My dad approached me and said, ‘You know, look, I’m probably going to be retiring in about five more years. If you think this is for you, if you want to come back to the funeral home, now’s a good time to come back and I’ll teach you the business. And that is what I did.”