Women in Insurance – A History – the 1990s

Life Insurance advertisement circa 1995

The 1990s were generally a decade of peace and prosperity in the US, with some notable exceptions. The economy was in a relative state of expansion after the recession in 1990. The stock market was booming, and unemployment rates remained low for much of the decade.

Bill Clinton was in office for most of the decade after winning the election in 1992, taking over from George W. Bush who had been in office since 1989. Notable events during the decade include the official end of the Cold War in 1991 with the collapse of the Soviet Union, the signing of NAFTA (North American Free Trade Agreement) that went into effect in 1994, and the formation of the WTO (World Trade Organization) in 1995. In addition, Operation Desert Storm (the First Gulf War) took place in 1991, the Rodney King trial was held in 1992, and the US suffered several high-profile bombings at the World Trade Center in 1993, the Federal Building in Oklahoma City in 1995, and the Centennial Olympic Park in Atlanta in 1996.

Technology advances exploded during this decade. The World Wide Web made its debut in 1991 and quickly took the world by storm. By the end of the decade, the dot-com boom was in full swing. Advances were also made in the area of genetics with the birth of Dolly the sheep, the first cloned animal. Both of these advances would have a significant impact on the life insurance industry.

In general, women were doing better economically than they had in previous decades. A Korn/Ferry study published in 1994 reported that 67% of companies responding to their survey indicated they had at least one woman appointed to their boards, up from 59% in 1989. The overall numbers, however, were still low – only 6.2% of the Fortune 500 company board seats were held by women in 1994.

A major national survey of working women conducted by the Women’s Bureau in 1995 revealed important truths about women in the workplace at that time (Nussbaum, K., New York Times, 1995). Over 79% of the women reported liking or loving their job. Nearly all of the women, however, reported the need for improvements in several areas. These included:

  • Pay equality – women with similar educations were making 71.5 cents to every man’s dollar
  • Access to male-dominated professions – 60% of working women were siloed in traditionally female dominated professions where the pay was significantly lower
  • Access to senior-level positions – over 95% of senior managers were white males
  • Retirement funds and other benefits – a vast majority of the positions held by women did not come with benefits

During the 1990s, life insurance sales declined. A report in 1992 showed that 46% of men and 40% of women carried life insurance, a significant decrease from past decades. In 1997, reports showed 11.1 million policies sold, a 37% drop from 15 years prior. According to an A.M. Best report in 1998, less than half of American households held coverage beyond the minimums provided by employers.

One new area of sales that opened up and grew quickly only to fall off dramatically near the end of the decade was the viatical sales market. In this market, viatical companies would purchase life insurance contracts from sick (often those suffering from AIDS) or elderly policy holders who either needed money right away for hospital or treatment costs, or no longer had a need for the policy death benefit. These companies would then continue the premium payments and collect the death benefit when the policy holder passed away. They were, in effect, gambling on the death of these individuals. On the flip side, this provided much needed money to those in need.

In 1996, there were roughly 60 such companies who bought between $400 million and $500 million worth of policies annually. Near the end of the decade, some traditional companies fought back against these viatical companies through their design of the Accelerated Death Benefit, a rider that offered policyholders a way to access their death benefit early when a doctor had certified that death was imminent.

The traditional life industry had become highly competitive, not just within the industry but from forces outside the industry. Mutual funds and other investments were diverting sales. In addition, the arguments over whether to buy term or permanent insurance raged on, with term winning in most advice columns during the decade due to the strong economy bringing lower premiums to the companies. Certainly, during this time of economic boom, higher returns were easily found outside of the permanent insurance space. In addition, people were living longer lives which in turn helped them to postpone thoughts on mortality and therefore purchases of life insurance.

The Life Insurance industry’s reputation took a significant hit in the 1990s. This was largely due to the competitive pressures put on the sales agents by the economic forces in play. Life insurance sales representatives began relying on unscrupulous tactics to make their sales. Many resorted to the sales practice called “churning” where they used the cash value built up inside an insurance policy as a loan to buy another policy for their clients. These policies were sold as a “no cost” way to purchase additional insurance coverage. At the same time, these policies generated additional commissions for the agents and bonuses for their sales managers. Unfortunately for the client, often all of these policies would eventually run out of money, and all coverage would lapse leaving the client with no coverage at all. Or worse still, upon the death of a loved one, an insured would find that the loan on the policy would nearly (or entirely) eclipse any death benefit left, leaving them with little or no insurance.

Another common sales practice of the times was the “vanishing premium” policy. In this case, a life insurance sales representative would produce a policy illustration that showed the need to pay premiums on a policy for a set number of years. In reality, these illustrations were often based on unrealistic interest rates and returns, and policy holders would find themselves paying premiums for many years more than originally planned.

Due to the fallout from these sales practices, nearly every major company found themselves paying significant settlements to their customers. Metropolitan Life alone paid over $100 million in fines and restitution. This amount was increased to $1.7 billion in 1999. New York Life settlements were estimated at $65 million, State Farm at $200 million, Nationwide at $100 million, John Hancock at $350 million, and the list goes on. Quite obviously, these suits did significant damage to the reputation of the industry.

Near the end of the decade, the larger insurance companies took action to address the concerns of the public and organized the Insurance Marketplace Standards Association, a compliance organization built to address unscrupulous sales practices. Another measure many companies took was to severely reduce their sales forces. Prudential reported cutting from 20,000 agents down to 9,000.

Companies were also dealing with some significant high-profile harassment lawsuits. In one case in 1997, two female employees of CNA Life Insurance alleged significant harassment from the president of the company, who was then forced to resign along with his deputy. Comments from news articles at the time claim that just a few years prior, the company would have likely swept such an incident under the rug. Another major suit alleging rather sensational harassment claims was settled in 1997 against Monumental Life in the US District Court in Maryland.

Another byproduct of the slow-down in sales was a consolidation in the industry. This included mergers and acquisitions along with many insolvencies. In the first half of 1991, 12 companies went under including Monarch Life, Mutual Benefit, and Mutual Security Life, among others. Many companies sold divisions that were non-core businesses in order to focus their concentration. In 1995, over 20 deals were made involving non-core business sales. Analysts that year estimated that a full 20% of the 1500 companies in existence were facing consolidation.

As mentioned above, technology brought about a major change to the industry. Carriers began selling term life insurance on the internet. Several quoting engines popped up on the scene giving consumers the ability to shop for low-price term on their own. Suddenly the long-held belief that life insurance had to be sold, not bought, was put center stage and debated fiercely in the media. One of the biggest disrupters in this area was Charles Schwab, a company that introduced both online sales and a toll-free number customers could call to purchase insurance. Only a very few traditional insurers joined in the online sales in these early days, including USAA and Ameritas.

Women and Life Insurance During the 1990s

The number of women in the workforce continued to grow. In 1993 there were over 58 million women in the US workforce representing 45.6% of the labor force. This growth can be attributed to the changing desires of women who wanted to forge their own careers, the economic pressures on families, and the continued increase in the divorce rate.

Women-owned businesses were on the rise as well. Estimates made in 1998 showed that women were on pace to head 1/3 of all family firms by the end of the century. Only ten years prior, women would not have likely risen to the top of family owned businesses, instead seeing male relatives put into that position. In fact, women-owned businesses were the fastest growing segment of the US economy in 1998. Times were changing, which meant that more women needed insurance.

In order to bolster sales, the industry again turned to underserved markets, including the women’s market. In 1993, the American College joined with the Life Underwriter Training Council to hold several seminars across the US to discuss the opportunities to be found in marketing to minority groups, referring to these groups as a “growing demographic trend.” One study reported that only 14% of men pursued women as a market.

It was still the case that during the 1990s women were underinsured compared to men. An article from 1992 cites a LIMRA (Life Insurance Marketing and Research Association) study that shows that on average women were purchasing $52,000 of coverage while men were purchasing $103,000 of coverage.

American Demographics, Vol 18, Iss 1 (1996)

Nationwide Mutual Insurance Company in 1994 launched a program called WINS (Women in Nationwide Sales) in an effort to recruit women as sales agents. The program intended to appoint women to at least 1/3 of new agency manager positions.

Several companies simply added female-targeted advertisements, including a Massachusetts Mutual Life Insurance ad that read, “All the women who won’t outlive their husbands don’t need to read any further.”

In 1997, Cigna rolled out their program, “Achieve: a Financial Independence Program for Women.” The program included nationwide seminars and written materials intended to help women better plan for retirement.

A study in 1996 by the IIAA (The Independent Insurance Agents of America), conducted to understand the women’s market, concluded that women were not confident when it came to making financial decisions causing them to often avoid the subject entirely. Less than half of the women surveyed indicated they had contacted a financial representative for help in the last year while 76% of them indicated that working with a professional would be beneficial. There is no data on how these numbers compare to the corresponding male population. Another omission of note – there is no data on how often these women were contacted by a representative offering advice.

An article in Best Review (Feb 1999) entitled “The 51% Niche Market,” opens with the following sentence, “As life insurers continue to focus on ever smaller marketing segments, some are rediscovering the largest segment of all: women customers.” The article details several new marketing efforts, nearly all of them less than two years old. The article quotes a sales manager from one company who is responsible for training on the women’s market: “It was hard for the [sales agents] to pull back and look at something new. We asked them, ‘How many women business owners do you currently do business with?’ Many of them did not know.”

This same article outlines the differences in working with women:

  • “Women use a different buying process. Men are transaction-oriented buyers while women are relationship-oriented buyers. They want to trust the person selling to them and know the relationship will continue after the sale.
  • Women covet information. They seek advice and insight from others such as a qualified agent, but will often stop to consider their decision before they commit. However, if the agent follows up, the sale is usually made.
  • Women are often more loyal customers, but that loyalty depends on maintaining a relationship.”

Some other tips given to attract the women’s market included:

  • “Don’t tweak the product or put it in a new package and call it new and improved. Change how you create business relationships instead.
  • Don’t think only female agents can reach this market.
  • Don’t sell life insurance only to the husband; consider the wife as a breadwinner too;
  • After spending lots of money on advertising to attract the female market, make sure your organization treats them as economic decision-makers.
  • Don’t assume all women are alike. That will get you into trouble.” (Best’s Review, 1999).

A LIMRA survey in 1996 indicated that 72% of life insurance companies felt that diversity programs were some of their most important objectives. Approximately 44% of life insurance companies stated that they had these objectives in written form. The reasons the companies gave for the creation of these objectives included it being the right thing to do and to help them increase their market share. Most of the programs shared in the survey targeted cultural minorities with bilingual services/non-English language marketing materials. None of the programs targeted women directly (Managers Magazine, 1996).

Women’s fraternal societies were still in existence, serving the women’s market directly when other companies struggled to reach this market. In 1997, Royal Neighbors was the largest with $548 million in assets and a board of directors that was exclusively female. Other women-focused fraternals included Loyal Christian, Women’s Life, Degree of Honor, and Catholic Ladies of Columbia. Many of these fraternals credited their on-going success to their personalized service to the women they served, along with their ability to offer other services that built strong relationships with their members.

Women in Life Insurance Sales

Several surveys, including one conducted by LIMRA in 1995, showed that women in life insurance sales sold largely to women. This resulted in income disparity due to the fact that women, as mentioned above, were purchasing roughly half the amount of insurance as their male counterparts. It was also the case that in general, female producers did not sell to high-income earners, further reducing their incomes.

A study conducted in 1997 by the National Association of Insurance Women shared some insight into why this might be. Their survey concluded that “women working in insurance sales are more likely to be motivated by a need to meet the needs of their customers, than by the challenge of the job” or the pay afforded them in this career (Esters, 1997). The compensation women earned was significantly higher for those working in insurance compared to other vocations.

Women reported difficulty in making the important business connections in order to grow their businesses. In one article, women discussed the advice given to them by many men to “learn to play golf.” These women found that even after learning to play, they still had trouble integrating with men in a meaningful business way at the sporting events. Women found it difficult, no matter what, to break into the old-boys network.

Despite the challenges they faced, the retention rates for women in life insurance sales were on the rise throughout the decade, with one-year retention rates often higher than those of men, and four-year retention rates nearing those of men.

At the turn of the century, women had made considerable in-roads into the life insurance industry, but still had a long way to go to reach parity with their male colleagues. The female side of the equation had once again been rediscovered this decade, but whether the attention paid to it would have meaningful results is something to be investigated in the next article.

Sources:

Anonymous (1998). “A Rich Heritage Since 1989.” Atlanta Daily World, Oct 18, pg 3.

Anonymous (1997). “Cigna pitches annuities to women as route to financial independence.” Best’s Review / Life-Health Insurance Edition,Vol. 98 Issue 5, p86.

Anonymous (1993). “Cultural Diversity and Its Impact upon the CLU/ChFC Movement.” Journal of the American Society of CLU & CHFC. Mar1993, Vol. 47 Issue 2, p88-88.

Anonymous (1996). “Diversity the focus.” Managers Magazine, Jan/Feb 1996, Vol 71, Issue 1, pg. 4.

Anonymous (1998). “Why Women are Different.” US Banker, Feb 1998, pg 13.

Bailer, D. (1997). “Fast-Track Group Offers Help to Women.” New  York  Times, Jan 12, pg WC4.

Bell, A. (1997). “Monumental settles harassment lawsuit.” National Underwriter, Vol. 101 Issue 40, p52.

Bell, A. (1997). “Women’s fraternals appeal to a niche within a niche.”
National Underwriter, Vol. 101 Issue 14, p7. 2p.

Christensen, B.A. (1994). “A look at the relationship between income and insurance.” Trusts and Estates, Mar 1994.

Esters, S.D. (1997). “Insurance women surveyed.” National  Underwriter  Property & Casualty – Risk & Benefits Management. Jul 21, pg 4.

D’Ambrosio, M.V., Hinchcliffe, R. (1995). “Female producers.” Managers Magazine, May 95, Vol. 70, Issue 5, pg 7-8.

Dunlap, D.W. (1996). “AIDS drugs alter an industry’s path.” New York Times, 30 July.

Geer, C.T. (1992). “Gender Gap.” Forbes, March 16, 1992.

Gilbert, E. (1994). “Nationwide targets female market.” National  Underwriter Property & Casualty -Risk  & Benefits Management, Aug 15, 1994.

Goch, L. (1999), “Marketing Traps to Avoid.” Best’s Review, Feb, pg 43.

Goch, L. (1999), “The 51% Niche Market.” Best’s Review, Feb, pg 40-43.

Hitchcock, C. (1992). “Why life insurance agents can’t work for you?” Consumers Research Magazine, Oct92, Vol. 75 Issue 10, p17.

Myers, G. (1996). “She works without a net.” American Demographics, Vol. 18, Issue 1, pg. 18.

Nelton, S. (1998). “The Rise of Women in Family Firms: A Call for Research Now.” Family Business Review. Sep pg 215.

Nussbaum, Karen (1995). “Women in Business: Working Women: Unfinished Business.” The Washington Post, Oct 17.

Quinn, J.B., Ehrenfeld, T. (1995). “Churn, churn, churn.” Newsweek, Mar 6,
Vol. 125 Issue 10, p46.

Quinn, J.B., Wilson, V. (1991). “Is your insurance company really safe?” Newsweek, 7/29/1991, Vol. 118, Iss 5, pg. 38.

Quint, M. (1995). “In Sales Pitches, Life Insurers Revive a Focus on Death.” New York Times, Sep 29.

Pasher, V.S. (1996). “IIAA spotlights cross-sale opportunities via survey.” National Underwriter, Vol 100, Iss 27, pg 1-2.

Pitz, M. (1999). “Metropolitan Life Insurance Settles Suit Alleging Deceptive Practices.” Pittsburg Post-Gazette, 8/19.

Ramirez, A. (1996). “Investing It: A way to cash in as insurers get the urge to merge.” New York Times, 21 Jan.

Sherrid, P. (1996). “Enter the virtual agent.” US News and World Report,
Vol. 121 Issue 13, p64.

Shook, D. (1998). “Fraud Suits Make Life Difficult for Major Life Insurance Providers.” The Record, 12/13/1998.

Treaster, J. B. “Death Benefits, Now for The Living.” New York Times, 27 Sept. 1998.

Treaster, J. B. “Life Insurance Loses Ground As Investment Options Grow.” New York Times, 8 June 1998.

Vatter, R.H. (1994). “Women in the labor force.” Statistical Bulletin-Metropolitan Life Insurance Company, July-Sept 1994.

Women In Insurance – A History – Black Owned Insurance Companies in the 1970s

ncm

While writing the general post on the 1970s, I found I had a sizable amount of information on black-owned businesses that just did not fit in easily. It seemed important enough to warrant its own post. Of course, this means it also mimics one of the problems with black-owned insurance companies at that time – they were, in many ways, kept separate in the national economy.

Black-owned life insurance companies were formed as far back as 1899, largely developing out of the secret societies and fraternal organizations created to support the black community. Most of these organizations existed to support families in their communities in paying for funerals at the time of death.

In 1970, there were 42 black-owned life insurance companies. This was a significant reduction from the 60 companies in existence twenty years prior. By 1979, this number had decreased to 38. Most of the loss in number was due to mergers between the smaller companies. Of the rest, some companies were purchased by larger white-owned companies looking to capture some of the negro market, and other companies simply failed.

The National Insurance Association (NIA), a trade organization for the black-owned life insurance companies across the US, was formed in 1921. In 1970, only two of the member companies ranked in the top 400 life insurance companies; the largest was ranked at 299. In 1974, all member firms had nearly $3 billion of insurance in force, and held $451 million in assets.

In 1971 black families held less insurance on average than white families. This was largely due to the heavy concentration of blacks in the lower income brackets. A study completed in 1971 (Starr Roxanne Hiltz) found that even within income brackets, black families still held less insurance. In 1970, the average policy in force for black families had a face value of $2,126, up from $593 in 1960. This compares to $3,461 average policy face amount across the entire industry, up from $2,000 in 1960.

The findings from this study indicate that there were three main reasons for this. First, blacks tended to own more expensive insurance, so it was difficult to afford as much. Much of the insurance written on black lives at this time was debit (also called industrial) insurance, where premiums were collected by agents going door-to-door on a weekly or monthly basis. Because of the extra work required by the agents, the companies charged higher premiums.

In addition, mortality rates were higher for blacks at that time, driving up the price. Ivan J. Houston, chairman of the board of Golden State Mutual Life Insurance Co. explained in one interview that the higher mortality rate was attributed to “a higher rate of homicide, accidents, and a lack of adequate health care” (Black Enterprise, June 1979).

Second, manual laborers of both races tended to hold less insurance than white collar workers, and with a heavy concentration of blacks in that segment of industry, their life insurance dollars were suppressed. Finally, women tended to be the heads of household in black families, and women in general held less insurance at that time.

Prior to this decade, white companies did not actively pursue the negro market. In some instances, these companies actively avoided this business, and some even declined this business. That began to change in the 1970s as the general market growth slowed considerably and white companies looked for new areas of expansion. Suddenly, black-owned companies found themselves in direct competition with the white companies for sales they could have counted on in the past.

Sales from black-owned life insurance companies comprised only one-half of one percent of all life insurance companies in 1970. Suggestions were made by scholars and journalists on how to help black companies grow and continue to be alive and healthy. One suggestion put forth was for black companies to aggressively enter the white market, something many of the companies had tried on a limited basis beginning in the 1960s. One author felt this would be an extraordinarily difficult task, stating:

At our present stage of race relations, such a relationship, with the black in the advisor role, will be achieved neither widely nor easily.

On the other hand, it could be that being black in the white market actually worked as a benefit where the white customer “acting out of social consciousness may prefer black agents” (Duker & Hughes, 1973, pg. 223).

Another suggestion was that the black companies could rely on a “buying black” sentiment to continue to grow in their traditional negro market. Because the market had been built to serve the negro market when white companies refused to do so, some companies felt they could build on the pride blacks felt in the industry to keep them with black-owned businesses. The president of United Mutual Life of New York, Nathanial Gibbon was quoted as saying:

We need more clout so we can have greater input on legislative and regulatory matters, and this can only come from increased participation by blacks in black insurance institutions.

One thing almost everyone agreed to – the black companies had to move beyond the debit policies on which they had built their companies. The general feeling was that the black insurance industry had approximately 10 years to develop new products and markets, the idea being that in general the black market tended to trail approximately a decade behind the white market.

The black-owned life insurance companies were also facing direct competition from white-owned companies for personnel. One reason for this was the push for equal opportunity in the white companies. The white companies were using sophisticated means to recruit black talent including regular visits to college campuses and partnerships with several national black organizations. There are also some hints in the press of white companies poaching top talent from the successful black companies. The white companies were often able to offer higher salaries, additional training programs, and greater promotional opportunities.

aetna ad 1970

In a particularly interesting article, four men who had been recruited to sell for white insurance companies discussed their experiences. One young successful man, with just two years of experience under his belt shared:

I was the first black man hired by my company in the city, and I feel like everyone was watching me. I knew that if I was a failure they would look at every black as being a failure and say that black people just were not interested in supporting black insurance men.

Black Executive, March 1974

Another man, a sales manager with a significant number of years in the industry shared his belief that it was his responsibility to be successful so that others could see it was possible. He said:

I think success breeds success and that success of the early million dollar producers made everyone realize that there was a black market out there, that it did have money, and it was willing to buy insurance to meet his needs. It’s required an education, but now I think we’ve got across the idea that black people have the same types of aspirations, the same types of abilities as white people have. And I mean that to cover the buying of the insurance as well as the selling of it.

Black Executive, March 1974

The top black-owned insurance companies during the decade were North Carolina Mutual, Supreme Life Insurance Co. of America, and Golden State Mutual Life Insurance Company.

North Carolina Mutual opened for business in 1899 in Durham, North Carolina, in order to provide black families with life insurance the white-owned companies refused to issue. By 1974, the company had over $2 billion insurance in force, putting the company at 177 out of 1,810 insurance companies. Over 97% of the policy owners were black.

In order to continue growing, the company made the decision to enter the white market and to aggressively pursue white salesmen. Initial efforts proved this would be a rather difficult endeavor, with most agents leaving the company after only 6 months.

The company also held over $138 million in total assets in 1974, putting the ranking at 150th by this measure. The company employed over 1,300 individuals, nearly all of them black. The company also employed 750 sales agents, many of whom were women.

Over 60% of the business North Carolina Mutual wrote was industrial/debit insurance. The balance was group insurance and ordinary life insurance policies. In the 1970s, the company acquired several other black-owned life insurance companies including Unity Mutual Life from Chicago and Great Lakes Mutual of Detroit.

Golden State Mutual was formed in 1925 as the only black-owned life insurance company on the West coast. The company was almost exclusively focused on debit insurance sales, but decided in 1974 to begin focusing more on middle- and upper- income brackets as black incomes began to climb.

In 1979, Golden State Mutual was the second largest black-owned firm in the West after Motown Records. The company was licensed in 20 states and Washington D.C. The average sized policy the company sold at this time was $2,500 with a monthly premium of $8.35, collected by agents going door-to-door on a monthly basis. Approximately 57% of the company’s insureds were women, reflecting the tendency for women to be the head of household in the black communities.

Golden State had 722 agents, and at the end of the decade had $2.5 billion of insurance in force which included a significant amount of reinsurance and group insurance.

In large part, the black-owned life insurers did not participate heavily in the social movements of the day. The CEO of North Carolina Mutual, William J. Kennedy 3d, was quoted as saying:

Our role is not to become involved in social issues because we feel we can do black people more good in another sense – as an economic symbol. Many of our individual members get involved in social causes. But for the company I think it is necessary that some element in the black community work from the inside as much as possible.

New York Times, 26 May 1974, pg 131

That said, the company did provide loans to black homeowners and business men who could not find money at white-owned institutions.

At the close of the decade, the biggest black-owned insurance companies remained strong. North Carolina Mutual, by far the largest of the group, was well ahead of the others with over $4 billion in force, nearly $170 million of assets, and over 1200 individuals, both black and white employed.

The industry ended the decade healthy and with strong plans for growth in the 1980s. While integration was not fully under consideration, it did appear to be the way of the future. With white-owned insurance companies recruiting black employees and sales representatives, and black-owned insurance companies recruiting white employees and sales representatives, it seems that an integrated insurance landscape was destined to come.

Sources:
Anonymous (1978). “How Insurance Companies Invest Their Money.” Black Enterprise, June, 157-164.

Anonymous (1977). “Insurance Companies: An Overview.” Black Enterprise, June, 121-127.

Anonymous (1975). “North Caroline Mutual: Reaches Two Billion.” Black Enterprise, June, 57.

Anonymous (1979). “Ordinary is Extraordinary for Golden State.” Black Enterprise, June, 197-201.

Anonymous (1974). “Seventy-Six Years of Black Insurance.” Black Enterprise, June, 141-145.

Duker, Jacob M., Hughes, Charles E. (1973). The Black-Owned Life Insurance Company: Issues and Recommendations. Journal of Risk and Insurance, 40(2), 221-230.

Hiltz, Starr Roxanne (1971). Why Black Families Own Less Life Insurance. Journal of Risk and Insurance, 38(2), 225-235.

Parker, Robert A. (1974). “Four Black Salesmen in a White Company.” Black Enterprise, March, 59-61, 71-72.

Puth, Robert C. (1974). Can Black Insurance Companies Survive? Challenge, May-June, 51-59.

Smith, Faye McDonald (1977). “Atlanta Life: 72 Years Old and Still Looking Ahead.” Black Enterprise, June, 133-139.

Stuart, Reginald (1974). “Prudent Insurer Is A Black Business Symbol.” New York Times, 26 May, 131.

Women in Insurance – A History – The 1950s

1950s

Following the end of World War II, the US experienced a post-war economic boom. Having dealt with rationing for several years, Americans were ready to spend. Consumerism expanded rapidly, as did the suburbs. Many women, having entered the workforce during the war, now found that they wanted to stay. This allowed families, now with two incomes instead of one, to increase their standard of living.

In 1950, the Korean Conflict broke out, and throughout the 50s the Cold War and McCarthyism continued to develop. Army General Dwight D. Eisenhower, a WWII hero, was elected president in 1952 and reelected in 1956. The space race began in 1957 with the Soviet Launch of the Sputnik satellite, followed three months later by the launch of the US satellite Explorer 1.

The civil rights movement continued its march forward. With the landmark Supreme Court case Brown v. Board of Education in 1954, “separate but equal” laws were struck down, paving the way for integration and the major civil rights movement activities of the 1960s. The role of women in business expanded. As the decade moved along, women’s roles in the working world became hotly debated in the public press. In addition, the beginnings of the “equal pay” rallying cry from the women began in this decade.

LIFE INSURANCE DURING THE 1950S

The life insurance industry experienced strong growth during the 1950s, benefiting from the economic boom as much or more than any other industry. In 1951 there were 609 legal reserve life insurance companies. By 1955 there were approximately 800 life insurance firms in the US, and by the end of the decade, there were well over 1,000 life insurance companies.

In 1950, US legal reserve life insurance companies had approximately $235 billion of insurance in force. The new sales in 1950 were estimated at $30.8 billion and included ordinary, industrial and group life insurance. The payments made to beneficiaries totaled $4.25 billion, 63% of which were paid to living beneficiaries. In 1955, new sales reached approximately $47.4 billion, resulting in $373 billion in force. In that year, it is estimated that 80% of US men and 62% of US women held some amount of life insurance. By the close of the decade, the industry had approximately $580 billion in force.

In 1957, the second largest company in the US and the world was Metropolitan Life Insurance Company with $14.8 billion in assets followed by Prudential Life Insurance Company with $13.3 billion in assets. They both followed the biggest company, American Telephone and Telegraph Company with $18.4 billion in assets. Quite literally, life insurance ruled the world.

While sales were growing, mortality was also improving. Advances in the medical field continued throughout the decade, helping insurance companies to price ever-more competitively and to realize greater returns on mortality.The National Service Life Insurance continued to manage an enormous block of business; approximately 6,000,000 policies, representing $36 billion in protection.

With the military action in Korea, the war clause again became a matter of concern for the industry. Competitive action, and legislative action by certain states resulted in many different responses ranging all the way from shutting down sales to members of the armed forces to simply restricting aviation coverage. Early on in the Conflict, a large group of insurance companies came together in an effort to negotiate the pooling of the war risk, but no such deal was ever realized.

Regulation continued to be an issue for the industry. Early in the decade, the salary stabilization legislation was still in effect, not ending until 1953. Tax laws continued to change with two different formulae in the first three years of the decade. Social Security continued to be seen as a threat, especially as benefits were increased and more people qualified for this coverage.

An important advancement in life insurance was the introduction of automation. The potential effects of the ‘electronic machines’ was debated in the newspapers beginning in 1954. In 1955 it was reported that LOMA (Life Office Management Association) had formed an Electronics Committee that worked with a similar committee of the Society of Actuaries. The intent of these groups was to study the impact this ‘potentially revolutionary’ technology could have on the industry.

The industry, continuing the trend that began in the 1940s, was highly concerned with the quality of the Insurance Agent selling their products. A significant amount of energy was expended in developing exams that could determine the likelihood of success of a particular recruit, and robust training programs were made for those agents already in the field.

Competition in the industry grew significantly during the decade. In a 1955 article in Barron’s National Business and Financial Weekly, John C. Perham discussed new policies introduced that year that charged less for higher face amounts, calling them ‘special’ or ‘cut-rate’ policies. Other new policy innovations were introduced including the ‘family policy,’ a policy intended to cover an entire family at a lower rate than the individual rates, the ‘business women’s policy’, intended to offer disability coverage to the working woman, ‘family income plans,’ where the amount of the coverage decreased as the family’s children grow up, and the ‘guaranteed insurability rider’ that insured a client can purchase additional coverage in the future. In 1959, Northwestern Mutual Life introduced lower rates for women, stating:

Northwestern Life Mutual has felt that it is every woman’s right to be considered younger than her age – years younger than a man who has lived the same length of time. Recent mortality statistics now validate this view, and the new rates reflect it! N.M.L. is the largest life firm to recognize lower female mortality rates by reducing gross premiums on female policies, and we are the first company in the United States to give special recognition to present women policy holders thru dividends.

(Investors Guide, Chicago Daily Tribune, 12 Jan 1959)

The Negro companies also continued to grow. Although they were started and initially grew serving only Negro customers (not by choice, but due to segregation), they were now becoming big enough to attract the attention of white customers. The largest companies included North Carolina Mutual, Southern Aid, Atlanta Life, and Supreme Liberty Life Insurance Company. In 1954, North Carolina Mutual hit a major milestone surpassing $200,000,000 in force by the end of the year. This put the company at #136 of all insurance companies in the US based on insurance in force, and #124 based on admitted assets. The company was #1 among the 66 Negro life insurance companies in operation in 1954.

An important study came out in 1950 showing that, despite years of thinking otherwise, race had no bearing on length of life. The insurance industry argued otherwise, stating that the mortality of blacks was 50% higher, and therefore a poor insurance risk. This debate was not settled until much later.

WOMEN IN LIFE INSURANCE DURING THE 1950s

Following the end of the War, the question of women in the workplace was a confusing matter. Many Americans expected women to go back home when the men returned to the workforce. The reality proved to be more complicated. In many cases, the need for workers had expanded to the point where women were necessary to fill all of the positions. And in many cases, women found that either their income was required to feed their children, or that they enjoyed work outside the home, and enjoyed the additional comforts for their families that were now possible with two incomes. This led to the question of what positions the women should and/or were capable of filling and how much the women should be paid, among other things.

The place of women in the workplace was debated in the press, most especially around the end of the decade. Headlines such as “Women Just Are NOT Good Bosses – Says a Man” (Chicago Daily Tribune, 27 Jan 1957), “Can Women Get Along Without Men?” (Los Angeles Times, 13 Oct 1957), and “Women in Business Advised Against Being Feminists” (Daily Boston Globe, 25 May 1958) show the contention that was beginning to surface in society.

Of great interest to the people of the times (based on the number of newspaper articles on the subject) was a dramatic shift in the number of married women, generally over the age of 35, working outside the home. In 1950, married women made up more than half of the female working population. One personnel manager suggested that this was in part due to the fact that the employers could pay married women less than single women (and single women less than men) because they had a husband bringing home his pay. Another shift saw more women working clerical office jobs than any other profession.

And yet, at the beginning of the decade, companies still were less inclined to hire married women, if they could avoid it. Some companies even had specific policies against hiring married women. The personnel director at Metropolitan Life Insurance Co. was quoted as saying, “It’s always been our general policy not to hire women who are married. But if they come to us single and get married later we’ll keep them as long as they want to stay.” The general reason given for these policies was that married women tended to miss more work than others due to their need to care for their children.

By the middle of the decade, opinions had changed. Companies were short on workers, and were willing to try new tactics to attract more. In 1956, Metropolitan Life Insurance Company and Aetna hired mothers for shorter shifts between 9am and 3pm so that the mothers could be home in time for their children to return from school. Prudential Insurance Company offered employees a paid day of vacation for recruiting their friends, and other insurance companies were paying bonuses for recruiting qualified candidates.

The total number of women in the workforce in the US rose to over 18 million in 1950. By 1955, estimates showed 20 million women in the workforce, and the number continued to climb throughout the decade.

In 1949, women doubled the amount of insurance they had purchased in 1940, reaching $39 billion in force, approximately 1/5 of all life insurance in the US. By 1952 it exceeded $45 billion. By 1957, the amount women held in life insurance exceeded $60 billion. Reasons given for this increase include the growing employment of women, their increasing understanding of their need to protect their families, and a desire for retirement income.

In 1954, Northeastern Life Insurance Company of New York introduced a special policy marketed as a special policy exclusively for women. Of particular interest is the statement in the press release that reads “the policy contains the same provisions and benefits as the company’s principle policy for men, a preferred life contract.” Not many companies at the time were advertising “men only” policies, so this is curious indeed.

An article from the Chicago Daily Tribune in 1955 emphasizes the need to treat women differently when selling to them. One agent “urges attempts to create appeals that acknowledge woman’s real importance and indispensability.” He states that “this would involve new advertising techniques based on a truer understanding of woman’s nature.”

A number of women were elected or appointed to important, high-level positions in the life insurance industry. Each one of the women highlighted below was a “first,” and their nominations were well publicized.

Miss Lucinda B. Mackrey served as Secretary and Director of the Provident Home Industrial Mutual Life Insurance Company, and was one of the very few African-American women to hold an officer position in a large life insurance company at this time. Mrs. Mae Street-Kidd held the position of public relations director for Mammoth Life, and Mrs. Bertha Nickerson was a member of the board of directors of Golden State Life Insurance Company.

In 1950, Mrs. Millicent Carey McIntosh was elected the first woman director of the Home Life Insurance Company of New York. The president of the company explained that this appointment was indicative of the fact that women now had an important place in American business, and that a great number of the personnel in life insurance companies are female.

In 1951, the John Hancock Mutual Life Insurance Company elected its first female officer, Sophie Nelson, assistant secretary; Penn Mutual Life Insurance Company appointed its first female officer, Mary Foster Barber as assistant vice president; Connecticut General Life Insurance Company promoted Mrs. Charlotte Cowan as the assistant comptroller and Leila Thompson as head of the legal department.

In 1953, Bernice Sanders became the Vice President and Controller of the Supreme Liberty Life Insurance Company, and also handled all company training. She held a bachelors degree from Wilberforce University and did graduate work in mathematics and physics at Radcliffe College and Ohio State University. Quoting from an article in the Chicago Daily Tribune (10 July 1955), “Today she is mainly concerned with the challenges racial integration has brought both to her company and her race. She feels a new process of education is necessary for preparation for the new era dawning.”

In 1955, Northwestern Mutual Life Insurance Company appointed its first woman to the company’s board of trustees, Miss Catherine B. Cleary, a vice president of the First Wisconsin Trust company and former assistant treasurer of the United States. In the same announcement, the company shared that a woman, Mrs. Marie A. Stumb, placed second among 3,500 agents for sales in April.

In 1956, The Mutual Life Insurance Company of New York elected its first female member of the board of trustees, Mrs. Oveta Culp Hobby. She had served as the first director of the Women’s Army Corps, and the first Secretary of Health, Education and Welfare. At the time of her appointment, she was the president and editor of The Houston Press.

WOMEN AS LIFE INSURANCE AGENTS IN THE 1950s

Women were selling as much as ever. One estimate said that in 1950, there were approximately 5000 women selling life insurance. By 1954, three women (and 1237 men) had reached the life membership of the Million Dollar Round Table, selling over $1 million for three years in a row. Mrs. Grace Chow of Los Angeles was one, selling almost exclusively to the Chinese population in LA.

In 1957, the estimated number of women in the field had risen to 6,000 full time female agents with more than 275 women qualifying for the Quarter Million Dollar Round Table, and 13 women qualifying for the Million Dollar Round Table.

As with the executives in the home office, the success stories out in the field were often celebrated in the press, a testament to the singularity of the events. This decade certainly showcased more women than in decades past, but it was clear that successful woman were still a curiosity.

Miss Helen Ann Pendergast was a life member of the Women’s Quarter Million Dollar Round Table. She was quoted as saying that women did not normally enter the field before 30 because “you have to be a little bit older to tell a man how to provide for his family. But being a woman is no handicap, partly because men are accustomed to looking to women for advice all their lives about many things.”

Lesla M. Sabin, in 1951, was the only female general agent in Chicago. She had been in the business for 15 years at that time, and was the mother of nine children. She was nominated in 1951 for the Woman of Distinction by the Chicago Women Lie Underwriters in recognition of her leadership.

In 1953, Muriel Bixby Clark owned and operated her own insurance business in Los Angeles, and was the first woman named to the board of directors of the Insurance Association of Los Angeles, serving as Vice President. She said of the life insurance business:

You starve for the first two years…Really it is a wonderful profession for a girl. It requires a willingness to know your product and more than ordinary willingness to be of service…If you know more about your business and are willing to work just a little bit harder than your competitors, more power to you!

Another woman echoed these sentiments. Thelma Davenport, the national chairman of the National Committee of Women Life Underwriters, the distaff side, and life member of the Quarter Million Dollar Round Table, said in 1956:

The life insurance field is one of the real opportunities for career girls here and now…Women want to help people. They are interested in the welfare of the family, the protection of the home, the education of children – and life insurance provides for these things.

The Insurance Women of Los Angeles, one of 200 similar groups across the country in the 1950s, had the express purpose of elevating and expanding the role of women in the insurance industry. The president of the organization said, in 1954:

Women are receiving more and more recognition in the insurance field and are constantly finding new worlds to conquer…Although women do not often reach executive positions, many who start at the bottom do attain high supervisory capacities.

The 1950s were clearly a decade of significant growth for the life insurance industry and for the women in the industry, and the female customers of life insurance.

Up next, the 1960s.

Sources:

Anonymous (1955). “Insurance Notes.” Chicago Daily Tribune, Jul 25, pg C7.

Anonymous (1956). “Mutual Life Chooses First Woman Trustee.” New York Times, May 24, pg 44.

Anonymous (1955). “N. Car. Mutual Passes $200 Million Insurance In Force.” Philadelphia Tribune, Mar 26, pg 16.

Anonymous (1955). “The Women’s Corner.” Chicago Daily Tribune, Oct 10, pg. E5.

Anonymous (1959). “The Women’s Corner.” Chicago Daily Tribune, Jan 12, pg C4.

Anonymous (1959). “The Women’s Corner.” Chicago Daily Tribune, Aug 3, pg C6.

Anonymous (1951). “Women Buying Insurance.” New York Times, Jun 21, pg 42.

Anonymous (1951). “Women Make Good.” The Baltimore Sun, Aug 26, pg SO26.

Anonymous (1952). “Woman Rises From Clerk to Sec’y of Life Insurance Co.” Pittsburg Courier, Jan 12, pg 20.

Anthony, Julian D. (1952). “Running a Life Insurance Company is Fun.” Journal of Risk and Insurance, (19),1, 40.

Bachrach, Bradford (1950). “First Woman Director of Home Life Insurance.” New York Times, Dec 19, pg 54.

Barnes, Alerne (1954). “Insurance Group to Hold Annual Parley.” Los Angeles Times, May 23, pg D5.

B.M.W. (1953). “Insurance Woman is Philanthropist.” Los Angeles Times, May 10, pg C2.

Burns, Frances (1954). “She Works Just as Hard on Volunteer Jobs.” Daily Boston Globe, Oct 10, pg 69.

Clarke, M.C. (1950). “Insurance Executives Have Faith in Future.” Pittsburg Courier, Aug 19, pg 6.

Elston, James S. (1951). “Part II – Review of the Year: Life Insurance.” Journal of Risk and Insurance, (18), 1, 112.

Ford, Elizabeth (1956). “She Leads Women in Life Insurance.” The Washington Post and Times Herald, Sep 26, pg 28.

Galpin, Stephen (1950). “Women: They’re Grabbing Off a Greater Share of Jobs In Office and Factory.” Wall Street Journal, May 24, pg 1.

Ives, David O. (1956). “Companies Hire More Women, Part-Timers to Ease Office Pinch.” Wall Street Journal, Nov 28, pg 1.

MacKay, Ruth (1951). “Mother of Nine Trades Her Cookbook for Rate Book.” Chicago Daily Tribune, Nov 2, pg A8.

MacKay, Ruth (1952). “Women Turning More to Work Outside Homes.” Chicago Daily Tribune, Jan 7, pg C8.

Olsen, Lief (1953). “Americans Stock Up on Purse Protection with Record Rapidity.” Wall Street Journal, Sep 1, pg 1.

Perham, John C. (1955). “Premium on Competition.” Barron’s National Business and Financial Weekly, Jan 10, pg 3.

Stein, Sonia (1950). “Insurance Gives Distaff Side a Big Welcome.” The Washington Post, Jul 7, pg C4.

Wallace, S. Rains Jr. (1954). “Research in Life Insurance.” Journal of Risk and Insurance, 21(1), 22.

Williams, Carroll E. (1957). “More Women Attracted to Insurance.” The Baltimore Sun, Apr 3, pg 25.

Women in Insurance – A History – WWII

wwii

World War II broke out in Europe in 1939. During the first few years of the war, the US remained, or attempted to remain, neutral. The economy was significantly improved from the days of the depression, and even as Americans watched the horrors unfolding across the ocean, life was returning to normal.

That all changed, of course, on December 7th, 1941, when the Japanese bombed Pearl Harbor, and the US declared war on Japan the very next day. Suddenly jobs shifted from civilian to war efforts. Taxes were raised and precious war-time commodities were rationed. Men from all walks of life were pulled into service, and the landscaped of the American workplace was changed forever.

LIFE INSURANCE IN THE EARLY 1940S

Life insurance faced several hurdles in the 1940s. One particular impediment was the renewed fight over the New Deal, and whether life insurance was a federal or state concern. In a particularly impassioned article from 1940, written by Frank Gannett and entitled “Now Is the Time to Act: Save the Nation from Chaos,” he writes:

Life insurance has built in the short span of one century the greatest social security system that any people have ever known. Life insurance is the very embodiment of democratic ideals of individual responsibility….The total amount now in force in the United States is approximately 114 billion dollars. No wonder the Washington bureaucrats, having exhausted their genius for inventing new taxes, are itching to get their fingers on this 30-billion-dollar-prize…

Another difficulty was, quite obviously, the war. With the outbreak of the war, life insurance companies acted quickly to add the war exclusion rider to all sales, thereby protecting themselves from excessive claims due to war-time casualties. They were, of course, still liable for all policies purchased prior to the implementation of the war exclusion.

Because of the war, the industry suffered a shortage in salesmen and home-office employees. One particular specialty recruited to the war effort were the actuaries, needed for their mathematical skills. There was also a shortage of medical doctors. This put additional pressure on new life insurance sales. In response, companies began to extend their non-medical limits, allowing more life insurance sales to be placed without an examination.

To help those men and women who enlisted in the armed forces, the government stepped up, and by 1943 was the largest life insurance “company” in the country.

It is important to note that the Jim Crow laws were still in effect during this decade, and the life insurance industry was no exception. Much like the “white” companies, the negro companies weathered the Depression well, and came into the 1940s as strong as ever. In fact, these insurance companies were on the front lines of racial issues, as Dr. P.P. Cruezot, President of the National Negro Insurance Association, shared on a radio program the “manner in which forty-odd Negro life insurance companies are pioneering in the education, training, and higher standard of living for several million young men and women, and galvanizing the confidence between companies, the policyholders and the public.”

In 1940, the admitted assets of US life insurance companies totaled $30.8 billion. This was up from $15.9 billion in 1928. One interesting statistic: in 1940, throughout the US, there were 9 life insurance claims over $1 million, 2 of which were over S$2 million and 2 of which were over $3 million.

By 1942, sales had slumped due to war-time tax increases, decreases in the insurance workforce, and the gasoline rationing that made insurance sales much more difficult. Sales rebounded in 1943, and in 1944 sales reached a new peak of $148.4 billion in force. At the same time, claims and other benefit payments were also rising due to wartime losses, but the industry remained as stable as ever.

WOMEN IN INSURANCE IN THE EARLY 1940S

In general, the 1940s were a boon to women in the workplace. With men deployed oversees, women were sought to fill the vacancies men left behind. Even married women were being recruited to positions previously unimaginable for them. A Chicago Tribune article from 1942 reported a 300% increase in demand for female workers.

Women were even moving into top leadership positions where needed. An article from the Washington Post in 1942 discussed this, and also shared the downside of the situation – the fact that the men would return, and the women would be a problem when they did. One expert in employee relations was quoted as saying:

If this war lasts another year or two, women will move in large numbers into important executive and managerial positions. Then there’ll be the puzzler of what to do about it when the war is over and men come back.

The Metropolitan Life Insurance Company handled the situation in this way:

“In the last war Metropolitan moved women into executive positions. No successful method was found for demoting or advancing them when it was over. And, in the cases of some who still hold those jobs today, the situation is neither very satisfactory for the women nor the management. This time Metropolitan is not attempting to fill war-created vacancies job-for-job.”

Some saw the problem as self-correcting; women, they felt, would naturally leave the workforce to marry and become housewives just as the men were returning from war. Two surveys, both conducted in 1944, reflected the differing opinions. One survey of 50,000 employed women indicated that only 6% of these women intended to keep their current positions after the end of the war, and another 19% who would keep their jobs only if it did not replace returning service men. Another survey, conducted by the women’s advisory committee of the war manpower commission, reported that 71% of women intended to stay in the workplace and only 17% planned to return home.

By 1946, demand for female workers had dropped dramatically, and had shifted back to traditional jobs for women including teaching, secretarial work, and clerical positions.

In stark contrast to the previous decade where women were nearly invisible, women came back into focus in the life insurance industry as customers, sales representatives, and home-office workers. The industry now had a “whole new market” with so many women now entering the workforce.

Women purchased over 900,000 ordinary life policies in 1940, accounting for 20% of all sales. Over 50% of these purchases were made by business women, and 1/3 were housewives. Most frequently, the policies were purchased by women under the age of 30. By 1942, women accounted for 30% of total life insurance sales, and in 1943 sales to women were up to 35% of total sales. By 1944, women were buying 83% more life insurance than they did in 1942. Although the percent did increase over time, in general the amount of insurance purchased by women was roughly 50% of the face amount purchased by men.

One major step forward took place in 1947 when New York Life Insurance Company announced the election of their first female director. Mildred McAfee Horton also served as the president of Wellesley College. Upon her election, George L. Harrison, president of New York Life, stated “With a large number of women holding insurance or named as beneficiaries in policies, it is only natural that they should be represented on the directorate. The selection of Mrs. Horton indicates that my associates and I agree on the importance of having a woman on the board.”

WOMEN AS LIFE INSURANCE AGENTS

An article published in 1940, entitled “A Portfolio of Insurance Women,” profiled 13 different women who were forging their careers in the insurance industry. Quite obviously, these women had been engaged in insurance prior to 1940, and yet it is exceedingly difficult to find any mention of them before the decade turned over. These women were all agents (one managed the women’s division in a home office), working for companies such as Equitable in New York, Boston’s John Hancock agency, Fidelity Mutual, Penn Mutual, and Massachusetts Mutual. The article begins this way:

‘Insurance selling – what a job!’ So says Beatrice Jones, CLU (standing for Chartered Life Underwriter), New York insurance woman, supervisor of the women’s division of the Wilson Agency of the Equitable Life Assurance Society, chairman of the women’s division of the National Associate of Life Underwriters, and educational vice president of the New York Life Underwriters Association….’Selling life insurance,’ she says, ‘has put me to the test as no other work I ever did began to do, and yet I wouldn’t exchange it for anything.’

Insurance women

Another article from November of 1940 put the number of female life insurance agents in that year at 4,000, and citing a survey conducted by the Women’s Committee of the National Association of Life Underwriters, stated that these women had written policies on 956,000 people, providing $2.4 billion of life insurance protection for their families. The study showed that most women selling life insurance at that time were in their late 40s and sold 43% of their business to men.

In 1944, an article appeared in The Washington Post titled “Woman Agent in Insurance Here to Stay.” The author states:

Among the important changes that have taken place [during the years of the war] are: …The realization, on the part of life insurance agency executives, of the place of the woman agent in our business. Although there have been successful woman agents in life insurance for many years, and some have attained high honors, it took the war and the consequent manpower shortage to cause companies to recruit and train women in large numbers. There is nothing temporary about “women in life insurance” because they are being trained on a career basis.

There was still a strong bias against women’s financial competency and ability to conduct business during this time. Most men assumed that after the war women would return to their kitchens and living rooms. One particular lawyer, speaking to the American Society of Chartered Life Underwriters in 1944 highly recommended the practice of putting life insurance and other assets into family trusts in order to “protect [women] from their own weaknesses.”

In another talk, given to the women employees of Metropolitan Life Insurance Company in 1946, the speaker claimed that the great tragedy of the war was the breakup of the home, and stated that “the key to peace was to be found in ‘three great roles’ for women, in the home, in the community and in seeking equity rather than equality.”

An interesting study was published in 1940 (Seder) looking at the differences between the vocational interest of professional women, and whether they differed from men. One of the test samples was of insurance salesmen and women, where she found that there was no indication of any difference between the two genders. In other words, contrary to thought of the day, women and men, when engaged in the same occupation, were likely to have similar interests. This was an important step forward in the women’s movement.

So, while women in general took a huge step forward during the war, then a small step back after the war, women in insurance continued to solidify their place in the workforce. The business still viewed them as “other,” but continued to recognize their importance to the future success of the industry.
Sources:
Anonymous (1947). “Head of Women’s College Elected to Directorate of New York Life.” New York Times, Aug 21, 35.
Anonymous (1946). “Job Prospects for Graduates Termed Good.” Chicago Daily Tribune, Jun 24, 28.
Anonymous (1941). “Life Insurance Payments in Chicago Rise.” Chicago Daily Tribune, May 16, 29.
Anonymous (1942). “New Graduates Get Many More Offers of Jobs: Pay Is Much Higher; Women in Demand.” Chicago Daily Tribune, Oct 17, 25.
Anonymous (1941). “Women Big Buyers of Life Insurance.” The Washington Post, Sept 13, 13.
Anonymous (1940). “Women Gaining as Underwriters.” The Washington Post, Nov 6, 16.
Associated Press (1940). “Life Insurance Assets Top 30 Billion Dollars.” Chicago Daily Tribune, Dec 7, 23.
Gannett, Frank (1940). “Now is the Time to Act: Save the Nation from Chaos.” Delivered to the Connecticut Council of Republican Women, at the Bond Hotel, Harford, Conn., April 30.
MacKay, Ruth (1944). “White Collar Girl.” Chicago Daily Tribune, Mar 34, 17.
McCullough, Trudie (1942). “Women Now Hold Top Jobs In Business.” The Washington Post, Jul 12, R7.
Mitchell, Robert B. (1944). Review of Life Insurance in 1943. Journal of Risk and Insurance, 11(1), 61.
O’Donnell, Charles W. (1944). “Woman Agent in Insurance Here to Stay.” The Washington Post, Jan 2, R4.
Whitney, L. Baynard (1940). “Calvin’s Digest.” The Plaindealer (Kansas City, KS), 5-31, 7.

Women in Insurance, a History, Part 4 The 1920s

votes for women

One of the most significant steps forward in the battle for women’s equality took place on August 20th, 1920, when the 19th amendment to the US Constitution allowing women the right to vote was certified into law by the US Secretary of State. This had been a long time in coming. Women had been fighting for this right for nearly one hundred years through marches, protests, campaigns, and political maneuvering.

Women were making progress in other areas as well. In 1929, women controlled approximately 41% of the individual wealth in the United States. The report by Lawrence Stern and Company included impressive statistics:

  • Women [were] the beneficiaries of 80% of the $95,000,000,000 of life insurance in force in the US
  • Women [paid] taxes on more than $3.25 billion of individual income annually
  • Women millionaires, as indicated by individual income tax returns, [were] as plentiful as men
  • Women to the number of more than 8,500,000 [were] gainfully employed

Women were entering the workforce in greater numbers than ever before. That said, women were not generally accepted as equals in the workplace. Blatant sexism was common. In a Forum article from April/May 1920, an argument was put forth that women were, as a rule, incapable of success in business. The author stated “There are more reasons than would fill these pages why women fail in business.” He claimed that women who achieved any level of success did so through pure luck.

One particular statement gave me pause because it may, in fact, be true. Regarding successful women, the author stated:

“And we read about these women over and over again, simply because they are the rare exceptions which prove the rule that women, as a whole, are notoriously unsuccessful in business.”

While I disagree wholeheartedly with the premise of the statement, I worry at the idea that we still read of these singular women today. This, though, is a thought for another post.

In some places knowledge of the nature of the inequality of women was emerging. An interesting 1919 article from the Lancet reads:

“No one has ever denied that a woman is handicapped on account of her potential motherhood, but this handicap is, as a rule, far greater than is necessary… Only in very rare and exceptional cases is it possible to compare with any degree of fairness the ability, both physical and mental, of men and women. Their upbringing has been different and their training and development have been forced along different lines.”

The essay explains that the difference in the responsibilities placed on a young woman at home necessarily puts her behind her male counterparts in terms of education and thereby impedes her abilities to achieve high levels of success throughout life.

WOMEN IN INSURANCE

Women were entering the insurance industry home offices in ever increasing numbers. The vast majority of these women were employed to handle stenography, bookkeeping, and other routine, clerical jobs. Very few women advanced beyond this level. An article from 1924 stated “Men, as a rule, fill the posts requiring extended training, because the majority of women employees take positions only for a limited period between school days and marriage.” According to one report, only 25 officers in the insurance industry were women in 1927.

Although women were insuring their lives at a greater rate than ever before there were still objections to the purchase of life insurance. One woman, describing her own situation, stated that when her husband proposed to buy insurance on his life, her reaction was similar to that of her friends:

“I don’t want my husband to spend money on insurance for me; I think it would be wrong to insure his life; besides, he is in perfect health.”

Not all companies were willing to write business on female lives. Those who did most often included some sort of physical hazard waiver against pregnancy, protecting the companies from a death directly or indirectly related to pregnancy. Some companies included this as a clause covering the first policy year or years. Others outright excluded any deaths related to pregnancy.

One important advancement however, established by the Supreme Court, determined that pregnancy, in and of itself, was not a violation of a warranty of good health. In other words, a woman who is not asked about pregnancy during an application for life insurance, and signs a statement of good health, but then dies shortly thereafter due to complications related to pregnancy cannot be denied benefits.

WOMEN AS LIFE INSURANCE AGENTS

A report from the National Association of Life Underwriters estimated that in 1927 there were approximately 202,000 men and women licensed to sell life insurance in the US, and that 85% of the business was written by 15,000 men. The life insurance business was clearly a man’s business, as exemplified in this quote from a female agent:

“There is a great dovetailing of business. Men give concessions to other men.”

Another woman is quoted as saying:

“Undoubtedly this correlation of business and exchange of patronage does exist. Then, too, men prefer to deal with men when they buy insurance.”

There were certain groups of women who found success in this industry during this decade when they might not have found it elsewhere. Those were women who wished or needed to work part-time, women who were older, and women who were not college educated. Most insurance companies at this time would not employ women under 30, and while college education was desired, it certainly was not required.

Retention of women agents was a concern. Many of the older women recruited into the industry were not able to handle the early lean years almost universal in the industry. Most of the time these women were entering the workforce because of an immediate and acute need for funds that could not be provided in the first few years of an insurance sales career.

Some women were successful. An article from 1927 highlighted several successful women in the life insurance industry. Mrs. Florence Shaal and E. Marie Little are profiled as the only women to head all-female agencies (The Equitable). Mrs. Shaal is credited as the first woman to be elected to office in the National Association of Life Underwriters, and was named the manager of the first ever women’s department in the country.

Emma Ditzler (Connecticut Mutual Life), who wrote policies almost exclusively on women, was “believed to have established a world’s record for her sex in insurance by writing at least one application a week for life insurance for 150 successive weeks.” Sarah Crannell Wells (New York Life) wrote enough insurance to qualify for the Two Hundred Thousand Club, and is credited as one of the most successful insurance women in New York. She is quoted as saying, “I believe women have a special field in family work in insurance…It’s hard work. It means new shoes, or at least new soles every month.”

Another female agent warranted a full page story in a 1924 edition of National Business Woman. Elizabeth Kenney, widowed at a young age, entered the work force as a school teacher in Iowa. She joined the local Business and Professional Women’s Club and became one of the most active members. After attending a national convention of this organization one summer, she was inspired to become an insurance salesperson, working for the Mutual Life Insurance Company in New York. She experienced immediate success, doubling her annual salary in her first six months on the job. Her manager is quoted as saying:

“With practically no experience, she wrote more applications during the third quarter than any other representative in this Agency, comprised of 45 counties, besides having many other duties to engage her attention.”

She was quickly thereafter promoted to district manager over four counties. Her friends said of her:

“Much of her success as a businesswoman rests on the fact that she is so human herself and has such a deep understanding of human nature….[she] gives of herself freely and impartially whenever needed, and brings inspiration to all with whom she comes in contact.”

As in decades past, the life insurance industry has recognized the desire for attracting women both as insurance agents and as policy holders. The industry has not, though, figured out the best way to do this.

Next up, the 1930s. As always, keep it positive and smile!
Sources:
Anonymous (1928). “Insuring the Future.” National business woman, 8(7), 340-341, 380-381.
Anonymous (1929). “Women Control 41 Per Cent of Nation’s Wealth.” Bankers’ Magazine, 118, 5.
Anonymous (1919). “Women in Industry.” The Lancet, July 26, 167-169.
Anonymous (1927). “Women in Insurance.” National business woman, 12(6), 17, 45.
Bruere, Henry (1924). “Number One Madison Avenue.” The Independent, Dec. 27, 113, 3891.
“Excepted Risks in the Law of Life Insurance: Part II.” (1925). The Central Law Journal, 98(20), 350.
Norman, Henry (1920). “The Feminine Failure in Business.” Forum, April/May, 455.
Ravlin, Bernice (1924). “Elizabeth Kenney Insurance Underwriter.” National business woman, 2(8), 11.
Wallace, Eugenia (1927). “Business, Altruism and Insurance.” National business woman, 12(6), 14-16.