“Those who cannot remember the past are condemned to repeat it.”–George Santayana
It is, I believe, important not to be anchored to the past, but it is just as important to remember the lessons learned from past experience. Today we enjoy a great legacy, earned by the hard work and dedication of countless insurance people, many largely unknown today.
Writing in his book, “Marketing Life Insurance, Its History in America,” J. Owen Stalson said, “Historians have perhaps been too preoccupied with mortality tables, and the founding dates of companies to consider the astonishing influence that selling method, or lack of it, has had upon the development of life insurance in every age.”
When the sale of life insurance first began to take hold in the United States, there were no agents. Companies placed ads in newspapers and produced pamphlets to attract buyers. Very few came, and most of those early companies faded from the scene. In the mid-19th century, new companies were formed that realized life insurance is sold rather than bought. Agents were hired and the transition from “life insurance waiting to be bought to life insurance waiting to be sold” began.
But those next 50 years were tough. There were no standards and little or no regulation. Competition was cutthroat, with rampant rebating and twisting, which hurt the public, insurance companies and their agents. It was essentially a lose-lose situation and it is remarkable the system survived under those conditions.
Speaking of the business, Jacob L. Greene, president of Connecticut Mutual at the time, summarized the conditions and consequences of these unhealthy practices. “It has dishonored its own policies by offering them at less than their popular price, or else it has tried to get too high a price whenever it could. It has raised the question whether its premiums as published have any relation to the policy contract.”
“It has violated mutuality at the outset. It has charged different prices for the same thing to different men to whom it professes impartial mutuality.”