Stock Market Explorer

Posted on 16 Oct 2008

Those who knew Mr. Knapp of the Metropolitan Life Insurance Company were not surprised when, early in 1879, he packed his bags and sailed for London. He was not the kind of man to be content with armchair studies; characteristically, he headed right for the fountainhead of information on industrial life insurance, Henry Harben, of the Prudential.

Mr. Knapp was given a cordial reception. His studies at firsthand confirmed his previous decision to enter the business. His next step, one without parallel in the annals of insurance history, was executed with typical boldness. He arranged with Brice Collard, a British insurance man, to become his local deputy and to send over a sizable number of Englishmen experienced in conducting industrial insurance, to launch Metropolitans new effort in the United States.

Between 1879 and 1884 Mr. Collard commuted back and forth from London to New York, bringing to our shores more then one hundred able men, together with their families. Once located in key centers, these men had a heroic task to accomplish-to hire and train local Agents in the new approach, and to organize and establish district offices from the very ground up-all at top speed. They had to teach a technique of selling policies for small amounts, of receiving the premiums weekly in the homes of the insured, and of accounting for this multitude of transactions to the home office.

Many circumstances conspired to make formidable the building of an industrial insurance business in this country. The depression of 1873 and its aftermath of liquidations and bankruptcies had seriously disturbed the economic life of the nation. This was the most disastrous period in American insurance history. Policyholders lost many millions of dollars in company failures, and public faith in the institution of life Insurance dropped to a low point.

Moreover, the American people had little or no knowledge of the advantages of industrial insurance the large majority had never even heard of it. Only the Prudential Insurance Company of America and the John Hancock Mutual Life Insurance Company were already in the field, and their operations were very restricted. There had been few fraternal organizations such as the English Friendly Societies to popularize among working people the practice of saving funds for the expenses of death.

Despite these difficulties, Metropolitan flourished from the very beginning, likely because of the experienced technique of the English Agents. The first industrial policy was issued on November 17, 1879 and before another year had passed more than 200,000 such policies were issued. The insurance in force multiplied by leaps and bounds. At the end of 1880, in a little over a year, the company had on its books more than $9,000,000 of industrial insurance.

This figure was virtually doubled during the next year. At the close of 1882 the industrial business in force exceeded $34,500,000. The company passed the $100,000,000 mark early in 1886, a little more than six years from the inception of the business. As the volume of business increased, so did the Field Force. A few weeks after industrial insurance was launched the company had three district offices, with one hundred thirty Field Men. The following year the strength of the Field Force increased to 750.

By 1883 more than 1,600 men were operating from nearly fifty district offices and the expansion of business and personnel continued apace. The insurance world viewed this development with amazement. The company's success had proved the enormous popular demand for this type of protection, previously almost altogether ignored.

This author is a freelance marketing writer based out of San Diego, CA. She specializes in the history of finance, business, and insurance.