Conseco

Conseco's 2002 bankruptcy at $61 billion in assets demonstrated how financial services companies can destroy themselves through acquisitive growth that outpaces integration capability. The company grew from a small Indiana insurer to a Fortune 500 company through 40 acquisitions in 20 years, culminating in the disastrous $6 billion purchase of Green Tree Financial—a mobile home lender whose subprime portfolio would destroy Conseco. The mechanism failure was acquisition addiction similar to WorldCom's. Each acquisition provided short-term growth that masked underlying problems, but integration costs and operational complexity accumulated. Green Tree brought subprime lending exposure that Conseco didn't understand and couldn't manage; default rates on mobile home loans devastated the portfolio when the economy slowed. This is predator-prey dynamics in reverse—the acquirer consumed prey that poisoned it. Conseco's structure created coordination costs that exceeded integration benefits. Insurance companies require careful reserve management; rapid acquisition made reserves unreliable. The company didn't know what it owned or what its actual obligations were. When Green Tree's losses became clear, Conseco lacked the capital to absorb them and the credibility to raise more. The bankruptcy was at the time the third-largest in U.S. history. Conseco emerged from bankruptcy as a smaller, focused insurance company—forced autophagy shedding the acquisitions that had created artificial scale without sustainable value.