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.

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Women in Insurance – A History – The 1980s

 

met life advert 1980s

From the disillusionment of the 1970s, the 1980s moved America to the right with the conservative politics of President Ronald Reagan. Elected by an overwhelming majority in 1980, despite his conservative views, Reagan oversaw the nomination of the first female Supreme Court Justice (Sandra Day O’Connor), saw the first American woman to go to space (Sally Ride), and ushered in the end of the Cold War with the fall of the Berlin Wall in 1989. When Reagan left office in 1989 he had the highest approval rating of any president since FDR.

Inflation that had risen significantly during the 1970s continued to rise in the 1980s. In 1982, the United States experienced the worst recession since the Great Depression. While the economy recovered rather quickly, another stock market crash on October 19th, 1987, highlighted to investors that the economy had entered a new era of volatility.

In terms of women’s rights, the legal battles over discrimination continued. In 1984, the US Supreme Court found it illegal for clubs such as the Kiwanis and Rotary Clubs to discriminate based on sex. In 1986, the Supreme Court found in the Meritor Savings Bank v. Vinson case that sexual harassment was a violation of Title VII of the Civil Rights Act of 1964, and as such was a form of illegal job discrimination.

In 1980, the first woman was elected to Congress without following a husband or father into the position. In 1981, Sandra Day O’Connor was appointed to the Supreme Court. In 1984, the first woman was nominated to be vice president on a major party ticket.

The 1980s saw the rise of the yuppie, the emergence of MTV, the introduction of the blockbuster film (E.T., Return of the Jedi, Raiders of the Lost Ark, to name a few), and the birth of the 24-hour news cycle.

LIFE INSURANCE DURING THE 1980S

The demographics of the US were changing dramatically during this decade. The traditional family, with the husband as the primary (and only) breadwinner was gone, and in its place were single-mother families (approximately 33% of all households in 1984), divorcees, new immigrants, people who chose never to marry, married couples with no children, and retirees. The population had grown 60% since 1960 to 236 million people. These demographic shifts had a marked impact on an industry built on the foundation of the traditional family with a father who needed to protect his family.

Life insurance sales had been flat throughout the prior decade, and the trend continued into the 1980s. In 1960, 64% of all individuals in the US carried some form of life insurance; in 1984, it was 63%. In 1960, 72% of all households owned life insurance purchased through an agent; in 1984 this had dropped to 56%.

In 1981, $371 billion in individual life insurance was sold. Group life insurance sales brought the total to $544 billion. Products shifted during this decade. The “family plan” policy that was popular in the 1960s virtually disappeared. Term insurance took on significant popularity. Due to the increase of women in the workplace, families covered by group life jumped by 12 million between 1976 and 1984.

One LIMRA study showed that replacement activity (dropping one policy in place of a new policy) jumped from 36% of all households in 1980 replacing a policy to 56% in 1984. This marked increase was attributed to agents working their existing market and neglecting new, hard-to-reach markets. Another contributing factor was the industry tendency to recruit existing agents that were more likely to sell to their existing customers rather than reach out to a new market.

Inflation continued to be a major issue for the industry. Loan activity was higher than ever, with policy holders able to earn significant gains by withdrawing their funds from their whole life policies and investing them elsewhere. This inflation along with the recession saw many consumers turning to term insurance and shunning the whole life policy that had been so popular for decades prior. Early in the decade, term insurance accounted for over half of the volume of life insurance sold.

Hotly debated during this decade was the tax-free build up of the accumulating cash value within life insurance policies. President Reagan’s tax plan would have eliminated this provision, and the life insurance industry would have “died a slow death” (New York Times, 1985) as the value in purchasing cash value life insurance dried up. Fortunately for the industry, after all the debate, the cash value was protected from taxes.

In 1985 the news was dominated by the debate in the insurance industry over the use of gender to determine insurance rates. That year, the National Organization of Women filed a lawsuit against Metropolitan Life Insurance Company accusing the company of discrimination in both life insurance and disability insurance pricing. Organizations throughout the industry took sides, and legislatures across the country debated this hotly contested issue.

In March of that year, the American Council of Life Insurance took out a full-page ad in the Boston Globe and other newspapers across the country in order to defend the industry against NOW. The advertisement read: “Some people would charge women more than their fair share for insurance and call it equality. Sound like a good idea to you? We hope not.” The implication here is that if unisex rates were to be implemented, women would have to pay more to compensate for the higher mortality rates of men. Advocates for the unisex rates and NOW’s lawsuit claimed, “The insurance industry is the only industry that practices sex discrimination overtly [by setting rates based on gender].”

Montana was the only state to have implemented the unisex rates when the Massachusetts legislature began to seriously consider mandating unisex rates for all types of insurance. It is important to note that this issue was larger than just life insurance. At the time, women were paying higher rates than men for health, accident, annuities and disability income insurance, but lower life insurance rates. In the end, likely due to the intense lobbying efforts by the industry, Massachusetts did not include life insurance in the legislation it passed. In 1987, a similar law was struck down in New York.

In 1987, the AIDS epidemic hit center stage for the US and for the life insurance industry. In that year, a test was developed for life insurance applications, and rules were set regarding when and where such a test could be required. Companies added new questions to their applications regarding AIDS, and a new era of medical testing was introduced.

In that year, AIDS-related claims reached $487.2 million, a 67% increase over the year prior. This was thought to be an understatement of the effect on claims given that insurance companies rarely investigate the cause of death beyond the incontestability period (usually the first two years of the policy). In terms of claims counts, in 1987 1.2% of all individual life claims were attributed to AIDS, up from 0.9% the year prior.

The advent of AIDS introduced the industry to “living benefits,” although the concept was already in the introduction phase when the epidemic hit. The ability and willingness to pay out a portion of the life insurance proceeds to aid a person who is terminally ill came about at the end of the decade. Initially these benefits were offered to those with cancer, Lou Gehrig’s disease, and complications of AIDS. There were some initial concerns over this benefit, with many companies worried such a payment would be subject to taxation, that medical diagnoses could differ between doctors, and that some beneficiaries may disagree with the arrangements. Despite these concerns, this practice quickly became standard in the industry.

WOMEN IN LIFE INSURANCE DURING THE 1980S

In the beginning of the decade, over half of all adult women in the US were employed, and the vast majority of them were employed full time. The number of single women delaying marriage and/or having children was growing, as was the number of single mothers. This, in turn, meant that the number of female heads of households were increasing, reaching 7.7 million families in 1980. In 1981, women made up 54% of the workforce, and the numbers were increasing.

While women had started to climb the corporate ladder, they were well behind men in terms of pay. A study conducted near the opening of the decade showed that in the 1,000 largest industrial companies in the US, 28% of the officers were women. However, nearly two-thirds of these officers were earning less than $50,000 per year, and a third of them were paid less than $30,000 per year. The average business woman in 1982 earned $10,000 per year, while the average man earned $17,000 according to a report from a study done in Chicago. In 1984, 64% of the largest American companies still had no women on their boards, and only 8% had two or more women on their boards.

In the insurance industry, a study by the ACLI in 1987 showed that only 2% of the women working in this industry made more than $25,000 per year while 42% of the men did. Reasons given for this phenomenon included the possibility that men at the highest ranks of the companies had not yet grown comfortable with women in leadership roles, and that women in life insurance may have concentrated themselves in self-segregated groups, keeping them from the mainstream where jobs paid more.

One important issue causing trouble for working women was that childcare options were not keeping up with the change in women’s status. As more moms went to work, they had to battle a system that simply had not kept up. The number of daycares was extremely low, many had inconvenient hours, and the cost, if a woman could find one, was prohibitively high.

As women continued to gain access and higher level positions in the work place, they were still, in terms of life insurance, underinsured or in many cases not insured at all. In 1980, 65% of all adult women held some kind of life insurance, but this was nowhere near the 80% of adult men who held life insurance. In addition, the average face amount for women’s policies was $7,680 compared to men’s at $29,000.

The Life Insurance industry continued to recognize the importance of the women’s market. In one article the author stated, “Women are important enough as buyers and decision makers for insurance companies to be concerned with them” (Wexler, 1980). A marketing magazine suggested that the women’s market was a “special” market, and as such, deserved “special treatment.” Although what this treatment would entail is not defined, the author does indicate that there is a difference between single women and married women.

Nearly everyone was saying the same thing about the Women’s Market – it was new, it was something separate from the “mainstream,” and it was something worth paying attention to. The Boston Globe announced, “For the industry, there’s the prospect of an almost entirely new market.” A representative from Travelers Life stated, “We noticed the status of women had changed. Women were economically more valuable. They had a life insurance value” (Saltzman, 1980). Manager’s Magazine wrote “The last great untapped market is the women’s market” (Myers, 1983). Metropolitan Life was quoted as saying, “We think its [the women’s market] going to be a tremendous market…Traditionally insurance companies would talk to the so-called head of the household, the breadwinner…but with more women in the workplace…the distinction between earner and dependent has often ceased to apply” (O’Connor, 1981). The Globe Mail stated “Many industry insiders still consider women an untapped market…It would be utter folly to ignore such a vast market potential” (Stinson, 1982).

Some strides were made in reaching the women’s market. In 1981, John Hancock Mutual Life sold 32% of their policies to women, up from 20% in 1971. In 1989, AIG Life launched their Women’s Group, a network of female agents challenged with reaching the women’s market. While they do not present statistics on how effective the effort was, they did report that the first printing of their marketing material went out of stock extraordinarily quickly.

Sun Life introduced a product named HER, the main feature being that the rates were based on a separate mortality table for women instead of the setback method used in decades past. These new tables claimed to save women up to 40% on their life insurance premiums. Sun Life was not alone in adapting pricing for the new mortality gains recognized for women. Equitable Life Assurance developed a new classification for women based on new mortality tables, and Manhattan Life instituted discounts on the male 3-year setback for women.

An article in a 1983 edition of Manager’s Magazine encourages salesmen to avoid female stereotypes such as (1) women are basically emotional; (2) successful women are tough, pushy and less than feminine; and (3) woman’s place is in the home (Myers, 1983). Women were, in fact, looking at life insurance differently. A focus group in 1989 revealed that the main reason women purchased insurance was to help fund the education of their children. Women wanted more information on their options and how their life insurance would help them reach their goals.

WOMEN AS LIFE INSURANCE SALES REPRESENTATIVES

A prediction from an article in 1980 claims “During the 1980s, women will play a greater part in the distribution of insurance products…Currently the percentage of women in the agency forces has increased dramatically, due primarily to social and government pressures and good experience with women in sales” (Weech, 1980).

In some places, women were finally being seen the same as men. One author wrote, “Women will generally fail and succeed in the same ways as men, provided that they are selected in the same manner that is used to select males.” The women that were successful reported great satisfaction with their jobs. One agent for Metropolitan Life, June Visconti, said insurance sales was “one of the most financially and personally satisfying careers a woman can embark on.”

In 1980, Mutual of New York’s Pittsburgh agency formed a Women’s Unit, and found it to be a success. The company found that by capitalizing on the natural skills of women, including teaching, listening, nurturing and influencing, women were successful in reaching female customers. In 1981, 13% of the sales agents with both John Hancock Mutual Life and New York Life were women. In 1982, Sun Life of Canada, a company that had stepped up recruiting efforts in the women’s market, boasted 24% women in their new recruits.

One report stated that in 1983, there had been a significant increase in US women selling life insurance. A LIMRA report from 1984 stated that 12% of the agency force was female at that time. By mid-1986, it had risen to 18%. The reasons given for the increase in the number of female agents included the fact that no particular education level was required for the profession, that the pay had no ceiling and was the same regardless of gender, and that life insurance was rewarding for those who were looking to doing something good for other people.

In the 1980s, the retention of women agents increased to equal that of men, however most of the women entering the field were new. According to the 1984 LIMRA report, 40% of the women agents that year were in their first year of selling.

There was recognition that selling life insurance to women would require a different approach. Women typically needed more information and more time to make decisions. Companies and agents alike were called on to provide additional information and services in order to attract the female market. Women also were believed to trust other women, and were believed to be the decision-makers in the home when dealing with financial concerns.

As we move closer and closer to present day, it will be harder to generalize on the women’s market. We will try, however, to look at the 1990s next.
Sources:
Allen, Frank (1980). “Women Managers Get Paid Far Less Than Males, Despite Career Gains.” The Wall Street Journal, Oct 7, pg 35.
American Council of Life Insurance (1985). “Advertisement: Some People Would Charge Women More.” The Boston Globe, Mar 25, pg 5.
Anonymous (1983). “Did You Know?” Atlanta Daily World, Jul 15, pg 3.
Anonymous (1989). “Life insurance cash for terminally ill.” Chicago Tribune, Jun 15, pg 9.
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Anonymous (1980). “Recruiting Women Agents.” Manager’s Magazine, 55(8), 32.
Anonymous (1981). “Rewarding career for women.” New York Amsterdam News, Jun 13, pg 22.
Anonymous (1981). “Tells WLUC of Disparity in Cover for Women.” National Underwriter, 85(37), 14.
Arndt, Sheril (1986). “WLUC Exec Says Role Models are Key.” National Underwriter, Life & Health Insurance Edition, 90(40), pg 2.
Barnes, Don (1987). “The Woman in life Insurance.” National Underwriter, Life, Health, Financial Services Edition, 91(2), pg 17.
Brostoff, Steven (1989). “AIDS-linked claims jump dramatically.” National Underwriter, Life & Health – Financial Services Edition, 10, pg 1+.
Brozan, Nadine (1980). “Insurance: New Policies Toward Women.” The New York Times, Sep 22, pg. A24.
Burrows, Julie A. (1987). “Start Selling to 50% of the Population!” Insurance Sales, 130(12), pg 20.
Gerstenberger, Paula P. (1981). “The Women’s Unit.” Manager’s Magazine, 56(10), 29.
Jamison, Kent S., Retzloff, Cheryl D. (1987). “What the Numbers Show.” Best’s Review, 88(4), pg 36+.
King, Carole (1984). “Female agents: a progress report.” Best’s Review – Life-Health Insurance Edition, 85, pg 132+.
Kleiman, Carol (1982). “A Portrait of Chicago’s Working Women.” Chicago Tribune, Mar 7, pg J22.
Knox, Richard A. (1987) “AIDS test readied for life insurance.” The Boston Globe, Sep 12, pg 17.
Landes, Jennifer (1989). “AIG Women’s Grp. markets ins. to working mothers.” National Underwriter Life & Health – Financial Services Edition, 50, pg 7+.
Lewin, Tamar (1984). “Women in Board Rooms Are Still the Exception.” The New York Times, Jul 5, pg C1.
Lipson, Benjamin (1980). “Improvements coming in insurance for women.” The Boston Globe, Nov 3, pg 22.
Myers, Ann (1983). “Selling to the Woman on Her Way Up.” Manager’s Magazine, 58(5), 34.
Myers, Ann (1983). “Selling to the Woman at the Top.” Manager’s Magazine, 58(4), 12.
Nussbaum, Karen (1983). “9 to 5: women’s role has changed.” The Boston Globe, Jun 28, pg 48.
O’Connor, Bob (1981). “Beneficiaries to buyers: Women are growing market for life insurance.” The Baltimore Sun, Sep 27, pg T1.
Ross, Nancy L. (1987). “Women’s Group Dealt Setback On Insurance.” The Washington Post, Jun 25, pg F1.
Saltzman, Cynthia (1980). “Troubled Life-Insurance Companies Try Mass-Marketing tactics to Increase Sales.” The Wall Street Journal, Dec 19, pg 50.
Stinson, Marian (1982). “Increasing Financial Clout of Women Attracts Insurers.” The Globe and Mail, May 31.
Weech, C Sewell Jr. (1980). “Internationally Speaking…Women in Life Insurance Sales.” Manager’s Magazine, 55(8), 36.
Wessel, David (1985). “Insurers Battle to Stop Massachusetts From Adoption Gender-Neutral Rates.” The Wall Street Journal, May 20, pg 20.
Wexler, Beatrice L. (1980). “Marketing to Women: Women Really Do Count as Buyers and Decision Makers for Insurance Companies.” Insurance Marketing, 81(6), 26.

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 1970s

prudential 1970sIf the 1960s were a tumultuous decade in the US, the 1970s were simply a continuation of the chaos. With the protests against the war in Vietnam, the continued push for the Equal Rights Amendment, the fervent backlash to that legislation, and the resignation of a President under the threat of impeachment, the decade was full of controversy.

In 1972, Congress amended Title VII of the Civil Rights Act of 1964 to allow the EEOC (Equal Employment Opportunity Commission) to go directly to court to enforce the civil rights legislation. This resulted in significant litigation and settlements with companies reaching hundreds of millions of dollars. Many companies worked hard to comply, but sometimes the discrimination was so ingrained in a company’s culture, it was not easy to fix.

This increased litigation led to significant push-back on the EEOC and the aims of the agency. The criticism came from many directions. On one hand, the complaints coming in from employees who were reporting discrimination were so great in number, a backlog of 130,000 had amassed by 1977. This meant that most employees never saw their complaints addressed. On the other, corporations certainly did not want to face settlements or judgments that would cost them significant amounts of money.

In one instance that caused significant disturbance in the press, John Hancock Mutual Life Insurance Co. made what the Wall Street Journal referred to as a “surprise move” in 1978, and refused a request from the EEOC for personnel recorders for an examination of compliance with the anti-discrimination legislation. A government official is quoted as saying, “John Hancock…fears what the records will reveal. Historically, insurance has been a white male profession at the managerial level, a white female profession at the clerk level.” Meanwhile, John Hancock maintained that the government was overstepping it’s authority, and had not followed its own rules in making the request. Additionally, an official from the company stated the dispute was just another instance of “additional, continuing, increasingly oppressive…government intrusion that is counterproductive” (Wall Street Journal, 17 Feb 1978).

If women and minorities fought at the highest levels (legislation, etc) to reach equality during the 1960s, it was the 1970s when they began to insist and truly fight for those rights on the ground.

INSURANCE DURING THE 1970S

The growing inflation during the 1970s was a significant issue for the life insurance industry, now comprised of over 1,700 firms. Rising from 4% in 1971 to over 13% by 1980, policy owners saw the value of their insurance eroding as the cost of living grew. Insurance companies and their agents had to find new and innovative ways to sell their products. Because of the rising interest rates, loan and surrender activity grew significantly. Policy owners found that they could withdraw their money and reinvest it elsewhere for greater returns. Tax laws were undergoing significant changes, and insurance company investment strategies had to be restructured to meet this new economic environment.

In the middle of the decade, the amount of life insurance in force had reached over the $2 trillion mark. This continued to climb as the face amounts of policies increased, largely due to inflation. By the end of the decade, it had climbed to over $3 trillion. By 1974 and through the end of the decade, it was estimated that over 90% of all husband-wife families carried some amount of life insurance. Average amounts of coverage for this group were $25,200 per family, where the family had a mean disposable income of $11,200. The number of policies in force reached a plateau in the middle of the decade, climbing only slightly by the end of the decade. This slow-down in growth of policy numbers foreshadowed a decline in the number of policies in force in the 1980s.

The life insurance industry now found itself in considerable competition for household savings, given the higher yields investors could reap in alternative investments. Whole life insurance was no longer the attractive investment it had been for the last many decades. It is precisely this environment that gave birth to a new type of policy, the Universal Life Insurance policy. It was also this environment that gave fuel to the debate over whether an individual should buy an “ordinary life” (or whole life) policy or a “term life” policy and invest the difference.

The number of insurance agents during the decade was estimated at 135,000 at the beginning of the decade, growing by almost 100,000 by the end of the decade. The retention rates for these agents were, however, dangerously low. One study found that two year retention rates were at 39%, dipping to a very low 13% by year five of the agent-company relationship. Many reasons were given for this very low rate, including a lack of training offered to new recruits, a lack of continuing education for those already hired, and the unstable income of agents when they first began their careers.

New types of employment opportunities began to develop in the industry. With advances in technology, companies were now looking for computer operators, programmers, and system analysts instead of the file clerks and assemblers of the past. Overwhelmingly, these new positions were filled by men while the clerical and administrative work was nearly 100% handled by women. Overall, there were approximately 1.5 million insurance company employees nationwide.

WOMEN IN LIFE INSURANCE DURING THE 1970S

life insurance 1970s.jpg

In the 1970s, women were graduating from college and joining the workforce in ever-increasing numbers. Because of the limited number of possible occupations for women, this led to a significant issue. A Labor Department report from 1970 cautioned that if women did not expand the range of careers for which they prepared, strong competition would develop in the female labor market. The same report spoke to a coming shortage of chemists, dentists and physicians, careers typically filled by men.

By 1973, more than 19.8 million married women were a part of the workforce, and from 1961 to 1973, there was an 86% increase in the number of married women who had both children and a job. In 1976, there were nearly 35 million women in the workforce, and 60% of them were married.

At the same time, businesses were beginning to understand the importance of a diverse workforce. In one article in The Baltimore Sun, the CEO of a mid-west mutual fund company was quoted as saying “It makes good business sense to bring interested and motivated women into the financial services industry. After all, our products such as life insurance and mutual funds represent security to millions of Americans. Who knows more about security than a woman?”

virginia schein.png

Companies that were not as successful in understanding the need to employ minorities faced major lawsuits. A landmark settlement in 1973 with AT&T called for an immediate payment of $15 million in back pay to women and minority employees, and an additional $23 million budgeted for future wages and promotions. Overnight, recruitment for women and minorities went up dramatically across all industries. A year later, however, women were still not making it to the executive suite, in most cases seeing their careers stall out at the middle management level. In 1974, there were 268 seats on the boards of directors for the largest insurance companies. Of those, not a single one was filled by a woman. In 1976, 97% of the individuals earning a salary over $15,000 were white males. In 1978, the EEOC settled a sex and race discrimination suit against Farmers Insurance Group for $1.5 million. One of the issues holding women back from the executive suite: in 1974, only 5.5% of all graduate and doctoral business students were women.

In 1970, the Institute of Life Insurance put out a publication entitled, “Your Financial Worksheet, a Guide for Women Returning to the Job,” with the purpose of helping women determine whether they could afford to work. The guide suggested a woman take into account taxes, child care, lunches, additional wardrobe, grooming, transportation, among other things, before she decides to return to work. While certainly meant to be helpful, a contemporary perspective shows this to be counter to efforts toward equality for women, encouraging them to stay home.

In decades past, the life insurance industry seemed to stay out of the social and political drama of the times. In the 1970s, this changed. The Equal Rights Amendment affected the industry directly and the industry was forced to react. In 1971, the largest companies operating in New York made a joint announcement that they were committed to at a minimum ‘doubling the number of minority group members and women in technical, sales, professional and executive jobs in two years.’

Some companies reported having already begun addressing the inequality of minorities in hiring and promotion activities. Equitable claimed that in 1971, 40% of new hires came from minority groups and of those, 13% were in executive training programs. Equitable found particular value in hiring black women, and worked to recruit and promote them. Metropolitan Life reported efforts to visit black college campuses in order to recruit minorities to that company. In 1977, they launched a major campaign to recruit minorities, especially women, into their sales force.

Regarding the purchase of life insurance, an interesting article in the New York Times reported that while young business men were typically receiving a call from an insurance salesman once every month, young business women, whether married or single, were never approached. It is not surprising then that in 1972 women carried on average $9,700 in insurance while men carried an average of $20,000 in insurance. The article makes the following statement: “…It gives the insurance man a new approach – selling insurance to the wife for her own benefit,” as if it were a new and novel concept. Another article from 1974 states, “…Very little attempt is made to sell insurance to women. The industry admits that agents (who are predominantly male) often do not take women seriously about insurance and will make their presentations only when the husband is at home.”

Thelma 1971

By 1978, the situation may have been changing. Insurance companies seemed to be awakening to “The Female Market.” Single women were now reporting more calls from agents, and some agents were beginning to understand the value of selling to working married women. Awareness of the fact that it would take more than a new marketing campaign or new product was growing. It would, however, take a major attitude shift to reach the women’s market.

In 1978, Monumental Life Insurance Company released a kit to help agents sell to the female market. Among the helpful hints the company urged agents, “If [the prospect] is single, don’t imply she will not marry…Expect many questions – Generally a woman will ask more questions than a man since she has had less opportunity to discuss life insurance.” These comments certainly seem funny from today’s perspective.

Throughout the decade, however, the amount of insurance carried by women was still significantly below that of men. In 1976, the amount of insurance carried by single women had increased to $28,400, but single men had also increased the amount of insurance they carried, up to an average of $31,000. At the beginning of that year, women owned $325 billion of life insurance, a new record, and a 150% increase from a decade earlier.

In addition, an old debate continued. Should a married woman carry insurance? In a column of the New York Times, Personal Finance, the reporter shared arguments from both sides, two years apart. In 1971, she discussed the need for “wife insurance,” arguing that the value of a wife had increased to a point where it should be insured.

In 1973, she shared that in many families, the money that would be spent on insurance was instead being spent on training and educating the wife for a career. Other reporters throughout the decade shared other opinions on the difficulty in the determination of whether to insure a wife. One life insurance agent explained, “It is fine for a woman to have full coverage, but, generally, if a working woman dies, her husband can get along okay as long as he can work…If he needs a loan, it’s easier for him to get one than it is for a woman.”

Mary Roberston 1972

In 1975, due to the increased attention on sales to women, insurance companies began to examine the life expectancy of insured women. At this point many of them decided to increase the set-back from men’s policies to 4 or 5 years, from 3 years as they had done in the past. This meant premiums became even lower for women. By 1978, separate mortality tables were being developed for women.

The data indicates that more women were purchasing more term insurance than ever before; over 4.3 million women took out term policies in 1972, a 20% increase from a decade earlier.

WOMEN AS LIFE INSURANCE AGENTS IN THE 1970S

women ins 1970.png

The number of women selling life insurance in the 1970s had not shown marked increases from decades past. In 1977, there were approximately 4,000 women selling life insurance out of a total of 135,000 agents. The women who did choose the profession, however, seemed to do well.

In 1975, the “Top Salesman” for Prudential Life Insurance company was a woman, Mrs. Estelle Holzer. That year, she sold $2.4 million of life insurance and garnered the prizes that came along with the award. In an amusing article in the Los Angeles Time, a company official explained that the award consisted of a silver trophy in the shape of a man carrying a briefcase, a men’s suit with three tie tacks and a pair of cufflinks, among other ‘male-oriented’ items. Clearly, they were not expecting a woman to win. Mrs. Holzer was quoted as saying:

Men, both co-workers and clients, don’t think we women are in this seriously…Men assume that because you are not the breadwinner in your family, you are working because you have nothing better to do or because you’d simply like a little extra spending money. Therefore, a woman has to work much harder to prove her worth and ability.

In 1975, only three women in Maryland held the CLU (Chartered Life Underwriter) designation. By 1977 nationwide approximately 770 women had earned the CLU, with approximately 125 new women qualifying each year. In 1972, 490 women qualified for the Women Leadership Round Table ($350,000 in sales or higher), 38 of whom qualified for the Million Dollar Round Table. In 1976, these numbers had jumped to 985 for the Women Leadership Round Table and 78 who qualified for the Million Dollar Round Table.

A New York Times article from 1975 (Aug 24, pg 78), reminiscent of similar articles from decades past opens:

Steady, men. That friendly woman’s voice on the telephone may not be the life insurance agent’s secretary. It may well be the life insurance agent herself.

Slowly – and activists in the field contend, far too slowly – life insurance companies are awakening to the marketing potential of women agents.

A similar argument for women entering the field was presented several times throughout the decade. In 1978, an article in the Chicago Tribune read:

The advantages of a career in insurance sales for women is that it lacks discrimination in both earning potential and public acceptance…In insurance sales, a woman can enjoy unlimited earning potential – agents are paid on the basis of results, not seniority or sex.

Sources:

Anonymous (1978). “An Insurer Accepts $1.5 Million Accord In Job-Bias Dispute.” The New York Times, 4 Jan, B4.

Anonymous (1972). “Black Woman Appointed to John Hancock Board.” Wall Street Journal, 9 May, 32.

Anonymous (1970). “Chasing Women Viewed as Good for Business.” The Baltimore Sun, 11 Dec, C13.

Anonymous (1976). “Insurance Can Mean Happily Ever After.” Atlanta Daily World, 1 Jul, 16.

Anonymous (1971). “Insurance firms agree to fair promotion policy.” The Baltimore Afro-American, 25 Dec, 3.

Anonymous (1974). “Marriage or Career? ‘Both’ Cry Women.” Atlanta Daily World, 11 Oct, 5.

Anonymous (1973). “More Women Buying Term Life Insurance.” Los Angeles Times, 9 Aug, C2.

Anonymous (1975). “Mrs. Tall, first woman in state to hold CLU.” The Baltimore Sun, 13 Sep, A13.

Anonymous (1971). “United Mutual Names First Woman Director.” New York Amsterdam News, 3 Jul, C16.

Anonymous (1970). “Women’s Career Market.” The Washington Post, Times Herald, 6 Dec, F3.

Anthony, Toni (1971). “A woman’s niche in a growing field.” Chicago Daily Defender, 29 Jun, 18.

Auerback, Alexander (1974). “Women Aim Sights at ‘Chauvinist’ Insurers.” Los Angeles Times, 3 Feb, H1.

Bralove, Mary (1974). “Where the Boys Are.” Wall Street Journal, 18 Apr, 1.

Brookins, Portia S. (1977). “Metropolitan Recruits Minorities In Sales.” Atlanta Daily World, 30 Jan, 2.

Caralmela, Edward J. (1973). Staffing and Pay Changes in Life Insurance Companies. Monthly Labor Reivew, Aug, 66-68.

Carmichael, Carole A. (1978). “Diverse groups find opportunity in insurance.” Chicago Tribune, 17 Dec, ND1.

Cray, Douglas W. (1977). “Life Insurers Putting Premium on Women.” New York Times, 24 Aug, 78.

Curry, Timothy, Warshawsky, Mark (1986). “Life Insurance Companies in a Changing Environment.” Federal Reserve Bulletin; Federal Reserve Bank of St. Louis, July, 449-460.

Fowler, Elizabeth M. (1973). “Women May Find Numerous Benefits Are Possible Through Life Insurance.” New York Times, 8 Mar, 55.

Johnson, Thomas A. (1971). “Rights Accord Set on Insurance Jobs.” New York Times, 11 Dec, 1.

Kleiman, Carol (1970). “Does it Cost You to Work?” Chicago Tribune, 26 Apr, F15.

Maynes, E. Scott, Geistfeld, Loren V. (1974). The Life Insurance Deficit of American Families: A Pilot Study. The Journal of Consumer Affairs, Summer, 66-81.

McElheny, Marge (1975). “Top Saleswoman in ‘Man of the Year.'” Los Angeles Times, 23 May, F16.

Mills, Kay. (1976). “Single Women Found Underinsured.” Los Angeles Times, 14 Mar, F19.

Rousmaniere, James A. Jr. (1978). “Women’s Insurance Gains New Status.” The Baltimore Sun, 19 Feb, K7.

Stuart, Reginald (1975). “Personal Finance: Women’s Policies.” New York Times, 4 Sep, 48.

Taylor, Angela (1974). “To Women, Insurance Companies Are at Fault on Many Things.” New York Times, 9 Feb, 35.

Umble, M. Michael, York, Paul F., Leverett Jr., E.J. (1976). Agent Retention Rates in the Independent Agency System. The Journal of Risk and Insurance, 481-486.

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, 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.

Women in Life Insurance, A History (A difficult chapter)

juneteenthIn my series of posts on the history of women in life insurance, I have worked our way up to the1920s. I realize now, however, I have skipped over an important topic that deserves its own space. It is a topic that is extremely uncomfortable and downright despicable for the industry and for me. I share this information purely as education into some of the dark early days of this industry. The subject matter does not pertain solely to women in the industry and yet I feel compelled to include it. The topic at hand: slave insurance.

I came across two excellent papers written on this subject. The first is entitled “Securing Human Property; Slavery, Life Insurance, and Industrialization in the Upper South,” written by Sharon Ann Murphy, a professor at Providence College. The paper was published in 2005 in the Journal of the Early Republic. The second paper is titled “Actuarial Issues in Insurance on Slaves in the United States South,” written by Cheryl Rhan-Hsin Chen and Gary Simon, and published in the Journal of African American History in 2004. Much of the information I will share can be found in those two papers.


In the 1830s, the Baltimore Life Insurance Company was one of the most successful life insurance companies operating in the United States South. The company’s intent was to write “white lives,” exactly as their competitor companies were doing in the North. The demand in the South, however, was not the same, and in looking for ways to diversify earning, they landed on the insurance of “negro lives.” This insurance, however, only partially mirrored the life insurance offered on “white lives.”

Slave insurance might actually be better described as “property insurance”. Chen and Simon make these distinctions: “(1) the beneficiary upon the death of the slave was never the slave’s family; (2) the face amount of the policy was directly linked to the market value of the slave; (3) the term of the policy was short,” with most policies on record for a year or less, with the maximum being seven years.

Many times, slave owners would purchase insurance on slaves they rented out for dangerous work, such as railroad building or working on the steamboats. Or else they purchased insurance on skilled artisans and house workers. Still other times they purchased the insurance as a means to fund the manumission, or freeing, of the slave. Records indicate this was often done as a means to keep families together when a slave was otherwise to be sold away to the Lower South.

There were difficulties with slave insurance. First, there was the concern that an owner might find more value in the insurance than in the life of the slave. For this reason, companies would limit the amount of insurance to 2/3 of the market value of the slave, and would write policies for short periods of time, allowing them to examine the slave more often should there be a request for a renewal. Records show that in the early days, policies were never written above $800 for males, $500 for females, and the amounts did not go up until the 1850’s when competition was stronger for these policies and the value of slaves had grown.

Closely related to this was the concern that a slave’s owner or overseer would mistreat a slave, thereby diminishing the market value of the slave. This, as above, could result in a situation where once again the slave is worth more dead than alive. In many instances, the insurance company would be underwriting the slave owner as much as the slave him/herself in order to ensure the slave would be treated well.

The third difficulty was in the pricing of the insurance. There were virtually no records on the mortality rates of slaves, so the insurance companies had to simply guess when developing their premium tables. In most instances, they simply doubled the rates charged for white lives of the same age. They would also include risk charges for slaves who were engaged in dangerous employment, and a ‘climate premium’ for slaves traveling south of the border of Virginia or Kentucky.

While the Baltimore Life Insurance Company was the first on the scene selling this type of insurance, many competitors joined the space in the late 1840s and early 1850s. Reflecting the ‘property insurance’ nature of slave insurance, many Fire Insurance companies began to sell these policies. Also, life insurance companies from the North thought they saw an opportunity here as well. According to Murphy, among the companies selling this insurance were New York Life, North Carolina Mutual Life, Aetna Life of Hartford, Hartford Life, Richmond Fire Associate of Virginia, Asheville Mutual Insurance Company of North Carolina, and Georgia Insurance and Trust Company of Baltimore, among others.

We do not have full statistics on how many policies were written, nor how many claims were paid. Murphy reports that the Richmond Fire Association wrote over 1,700 slave policies in Virginia, and that by the late 1850s over 3/4 of the business written by North Carolina Mutual was written on slaves. In addition, of the first 1,000 policies written by New York Life (then known as Nautilus Insurance Company), 339 of them were written on slaves.

Emancipation, signed into law by Abraham Lincoln on this date in 1862 rendered all of these policies void, and many of the southern insurance companies that relied on these sales were forced out of business.

In 2002, the state of California passed a law that required companies to disclose any profits they made through participation in the slave trade. Only three companies in existence today came forward, all of them expressing deep regret for their participation in this market. New York Life was able to produce evidence of 610 policies, Aetna of Hartford produced 19 policies, and AIG produced 173 policies. The analysis Chen and Simon did on these three sets of policies, given the extremely limited information they had, seemed to indicate that these companies did not profit from this business, but in fact likely lost money on these policies.

This was indeed a horrible chapter in the history of life insurance. I felt the need to include it in my history of women in life insurance because of the obvious fact that some of the slaves were women. But also because I feel it is important to recognize all of our history as an industry and as a nation. It helps us understand more about where we are today, and if we use the information right, it will  help us to avoid ever making the same mistakes again.

Thanks for reading, happy Juneteenth, keep it positive, and smile!

 

 

 

 

Women from the history of Life Insurance, Part 1

 

I have been doing quite a bit of reading on the history of the life insurance industry in the US. This is due in large part to the fact that I work in this industry, but also because I find that it is fascinating story filled with countless inspiring individuals. I think we can find heroes anywhere if we just simply look, and the life insurance industry is no exception.

A few quick points on the early history of the industry to help orient you:

  • The concept of life insurance can be traced back to ancient Babylon where it is found in the Code of Hammurabi – the family of merchants killed by brigands were awarded silver1
  • 1583 – The first recoded life insurance policy, a 1-year term policy that paid out a 400 pound sterling benefit2
  • 1759 – The first life insurance company in the US is established in Philadelphia: The Corporation for Relief of the Poor and Distressed Presbyterian Ministers and the Poor and Distressed Widows and Children of Presbyterian Ministers
  • 1839-1840 – States pass the Married Women’s Property Act which allows, among other things, life insurance proceeds to be passed to a widow without being subject to the demands of the husband’s debtors3

Women have played an important role in this industry from nearly the start. In this post, I’d like to share two important women from the early years of life insurance in the US.

The first is Bina West Miller.

Bina West Miller (1867-1954) was an incredible pioneer and entrepreneur. She saw a problem, understood how to fix it, and put her plan into action. She did this so well that the company she founded is still here today.

Bina began her career as a young school teacher in Michigan. Through her work, she witnessed first hand the struggles a family went through when the mother of two children passed away while the children were still young. The father carried life insurance on himself, but at that time, no company would cover women – in large part due to maternal fatality rates during childbirth. The father, left with no means to care for his children was forced to send his children to foster homes where they were sent out to work.

Bina saw the injustice in this situation and took bold steps to address it. In 1892, Bina founded the Women’s Benefit Society in 1892. Her objective was to be “The Largest, Strongest, and Most Progressive Fraternal Benefit Society for Women in the World. Offers more opportunities to women than any other fraternal insurance society.”5 Her organization offered women more than life insurance; it offered women a support network and a way to connect to their communities.

Bina successfully served as the CEO of her company for over 56 years. In 1996 the organization was renamed Woman’s Life Insurance Society, (I have linked to the company page on their history) and remains in business today. There is quite a bit of research out there on Bina West – I will list a few sources at the end of the article and I highly recommend you take a look.

The second woman I would like to introduce to you is Minnie Geddings Cox. Minnie’s story is rather different than Bina’s, but like Bina, she was a pioneer, an entrepreneur, and an important leader in the history of the life insurance industry. Much of what Minnie is known for revolves around what is known as the Indianola Affair. Minnie, serving as the first African-American postmistress in Mississippi (serving in Indianola), was forced to flee her city due to racial tensions and personal threats. When she attempted to resign from her post, President Roosevelt refused to accept it, and instead closed the post office for more than a year. Eventually, Minnie did return to Indianola.

Minnie was born in Mississippi in 1869 to former slaves. She attended Fisk University, and initially set out to be a school teacher. After her return to Indianola in 1904, she and her husband opened a bank, the Delta Penny Savings Bank, only the second African-American owned bank in Mississippi.

Shortly thereafter (1908), Minnie and her husband started the Mississippi Beneficial Life Insurance Company, the first African-American owned life insurance company in Mississippi. This life insurance company and the bank were described by Minnie’s husband as “monuments of protest to the injustices inflicted upon him and his wife.”6

When Minnie’s husband passed away in 1916, Minnie immediately stepped into the leadership role of the bank and the insurance company, and began improving the company. She expanded the company to nearby states, added training programs, and organized and held district meetings for her agents. Despite significant hurdles, Minnie was a rousing success. She passed away in 1933. The company no longer exists today, but was swept away in a variety of acquisitions by larger insurance companies.

There is an excellent paper written by Shennette Garrett-Scott on the story of Minnie Geddings Cox and her life insurance company, and I am linking it here. I encourage everyone to give this a read – you will not be disappointed.

To know that in 1892, a woman started her own life insurance company, and in 1916, an African-American woman was running her own life insurance company, should give us considerable hope for the future. We need to talk about these women, celebrate these women and recognize all of the female role models we have in this industry.

As always, keep it positive and smile!

1: Anonymous. “Life Insurance – It Goes Back a Long Way.” Nation’s Business, Jan 1975, p. 24

2: Walford, Cornelius FIA (1885). History of Life Assurance in the United Kingdom. History of Life Assurance, Jan, 114-133

3: Jones, Bernie D. (2013). Revisiting the Married Women’s Property Acts. Journal of Gender, Social Policy & the Law, 22(1), 1-57

4: Anonymous. “Bina West: Founder of the Woman’s Life Insurance Society.” http://www.historyswomen.com/socialreformer/binawest.html Accessed 3 May 2018.

5: https://fee.org/articles/bina-west-miller-pioneer/

6: From the Mississippi Historical Society: http://www.mshistorynow.mdah.ms.gov/articles/421/minnie-geddings-cox-and-the-indianola-affair

Additional source on Bina West Miller:

From the Michigan Women’s Hall of Fame website: http://www.michiganwomenshalloffame.org/Images/Miller,%20Bina%20West.pdf

Additional source on Minnie Geddings Cox:

From blackpast.org: http://www.blackpast.org/aah/cox-minnie-m-1869-1933