PC360 decided to take a look at the oldest insurers in the United States—a journey that has led to some interesting findings about the birth of insurance in this country.
In the mid-18th century, Benjamin Franklin and fellow firefighters founded what is said to be the first, lasting insurance company under the mutual principle “whereby every man might help another without any disservice to himself,” he said.
There was another short-lived company in the U.S. (before it was the U.S., of course) prior to Franklin's start-up. The Friendly Society for Mutual Insurance of Houses Against Fire was founded in Charles Towne (now Charleston), S.C. in 1736. It was bankrupted by the Great Fire of 1740, which destroyed more than 300 buildings.
So Philadelphia Contributionship starts off our list of the oldest…
Founded in 1752 by Benjamin Franklin, The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire, a mutual insurance company, first focused on fire prevention in the brick-and-stone city of about 15,000 people and eight volunteer fire companies. Besides running the Pennsylvania Gazette and publishing Poor Richard’s Almanac, Franklin also organized Philadelphia’s Union Fire Company.
The insurer elected directors in April 1752 and by June, seven-year, renewable-term polices were written for structures. The company sent surveyors out to a building. The directors reviewed the report and set the rate. Houses not built to legal specifications were denied insurance. Houses with trees in front of them were denied because early hoses could not get around them.
In 1753, a house on Water Street became the first insured property to burn. In the Gazette, Franklin reported that the damages were to be immediately repaired without cost to the owner.
In 1999 ACE acquired the global property and casualty business of CIGNA Corp., which included the Insurance Company of North America (INA).
A group of prominent citizens in Philadelphia in 1792 founded INA, the first marine insurance company in the U.S., and the nation’s oldest working stockholder-owned insurer. The insurer’s first policies covered the hull and cargo of the ship "America" on a voyage from Philadelphia to Londonderry, Northern Ireland. INA issued its first life insurance policy in 1794 to a sea captain against death during a voyage.
The company’s first brush with a major catastrophe was in 1871, when the Great Chicago Fire destroyed 2,000 acres of land and left 100,000 people homeless within two days. The INA paid all of its claims, amounting to $650,000, in full.
In 1865 the Connecticut General Life Insurance Company was incorporated.
Baltimore Equitable was actually the second insurer in Maryland. The first, the Maryland Fire Insurance Co., was incorporated in 1787 but it was short-lived. Residents met to create a fire company at the start of 1794 (George Washington was president) and soon thereafter, the Baltimore Equitable Society for Insuring Houses from Loss by Fire.
The first policy was written in April. By the end of the company’s first year, 104 policies had been written for a total coverage of $129,016. The insurer’s second year saw its first loss—two brick houses at Light and Baltimore streets that also consumed neighboring businesses, homes and a church.
“We’ve been through everything that’s happened,” says Gerald Roach, president of Mutual Assurance Society of Virginia, founded in December 1794. During the Civil War, Richmond, Va., the Confederate capital, burned and caused an evacuation of military forces from the city. At the time, the building’s policies excluded war losses, so Richmond—along with the company—had to re-build by assessing and restoring investment funds.
According to the Library of Virginia, “Rates of hazard were determined by the material composition of the buildings, by the uses to which the buildings were put, and by what may be kept in them. Mills, playhouses, liveries, and buildings containing machinery propelled by steam or in which combustible articles were stored could be insured only by special contract. Revaluations of insured property were required every seven years or whenever additions were made to a policy.”
Chartered in Providence in 1800 by the General Assembly of Rhode Island, Providence Mutual Fire Insurance Co. originally focused on insuring homes and manufacturing within a 10-mile radius of what was a village of about 8,000 people. Providence in 1801 wrote a policy for the Slater Mill, the cotton textile factory that is considered the birthplace of America’s Industrial Revolution. The multi-employee mill presented a plethora of new and unforeseen property and casualty risks, some of which are still present in modern manufacturing.
Eight years into its existence, “gentlemen” in East Greenwich and Bristol were appointed agents to transact business. The next year, Providence began writing in Massachusetts.
The Hartford Fire Insurance Company was incorporated in 1810 by the Connecticut General Assembly. During the Civil War, it sold a policy to Confederate commander Robert E. Lee for his family home, “Arlington,” in Virginia. President Abraham Lincoln later purchased coverage from The Hartford for his property in Springfield, Ill.
In 1822 The Hartford reinsured the New Haven Fire Insurance Co.—one of the first instances of reinsurance in America. In 1825 the insurer was the first to issue a policy to an institute of higher learning—Yale University.
What is known today as the Vermont Mutual Insurance Group—Vermont Mutual Insurance Co., Northern Security Insurance Co., and Granite Mutual Insurance Co.—has been protecting families and businesses in New England and upstate New York since 1828 when the Vermont Mutual Fire Insurance Company was founded by Daniel Baldwin, a young entrepreneur and chief engineeer of the local fire company.
Baldwin dedicated nearly 50 years of his life (34 years as its president) to the insurer, which from about 1832 to 1869 was headquartered in part of his home.
The insurer began in a tiny clapboard building. Vermont Mutual's current office is located on the same land where the original building stood.
In 1835, Zachariah Allen, a textile mill owner, made improvements to his property to minimize the chance of fire loss. He asked for a reduction in his insurance premiums but was denied. So Allen turned to other mill owners who shared his loss-prevention philosophy and together they formed what today is known as Factory Mutual Insurance Co., which does business as FM Global. The first policy was issued for $2,500.
Fire prevention and regular inspections did result in fewer losses but more capacity was needed because one mutual company could not handle the financial impact of the loss of an entire plant. So Allen formed another insurer, Rhode Island Mutual, in 1848. Several other mutual were formed in the next two decades to create the “Factory Mutuals.”
There were ultimately 42 insurers who were part of the Factory Mutual System. Those companies consolidated over time until finally merging into one company, FM Global.
The General Assembly of Maryland chartered the Mutual Insurance Company of Frederick County in December 1843. The company provided fire protection to the state’s citizens, and received its first claim on August 5 of the next year. Barbara Fritchie, the heroine of John Greenleaf Whittier’s fictionalized poem about an old woman who defended the Union flag before Stonewall Jackson, held a Frederick Mutual policy for her home.
Southern Mutual was chartered on December 29, 1847 and has called Athens, Ga. home since 1847. The insurer was founded by a group who saw the need for fire coverage for those outside the larger metropolitan areas. The company is now affiliated with the Donegal Insurance Group.
Gilmore & Skole
The seed of this Greenfield, Mass. agency was planted in 1819. It is the oldest independent agency in the U.S.
Gilmore & Skole was founded long ago as the Franklin Ripley Agency. That year, Franklin Ripley countersigned an Aetna policy for $2,000 insuring “certain goods, wares and merchandise” in a store belonging to Franklin and Jerom Ripley. Ripley handwrote this policy as his own responsibility, without home office authorization. It is said to be the first policy ever issued by an agent in this manner.
Hickok & Boardman
Founded in 1821, Hickok & Boardman Insurance is the oldest and one of the largest retail insurance agencies in Vermont. The origins of the agency go back to 1821 when Aetna Insurance Co. was searching for representation in Vermont. It was at this time that Aetna signed a contract with William Follet of Griswold & Follet, which marked the beginning of what is now known as Hickok & Boardman, Inc.
Julius Hickok joined one of the early founders in 1888. In the early 1920s, I. Munn Boardman was working as a chauffeur for Henry Hickok (son of Julius) while Boardman worked his way through college. Upon graduating, the agency and became a partner a few years later.
WHAT WE’VE LEARNED
We knew there was a possibility we might have left someone off our original list and we received some emails and comments to tell us about it. So, here is some additional information regarding the history of insurance in the United States.
To see our list from the start, click here.
We had CIGNA listed second to Philadelphia Contributionship because CIGNA could trace its beginnings to the founding of the Insurance Company of North America (INA) in Philadelphia in 1792.
However, in 1999 ACE acquired the global property and casualty business of CIGNA Corp., which included INA. Therefore, ACE inherits the history of one of the first insurers in the U.S.—and the first marine insurance company.
According to Harford Mutual, it should be between FM Global and Frederick Mutual on our list because on Nov. 23, 1842 a group of citizens founded the Mutual Fire Insurance Company in Harford County and started writing fire and lightning policies in 1843 on an assessable basis—meaning the company could charge additional premiums if it didn’t have enough to pay claims. This rule lasted for 100 years.
The company, which has been known as Harford Mutual since 1947, calls Bel Air, Md. home.
C.T. Lowndes & Co.
One prideful comment to our list came from this agency in Charleston, South Carolina—also the place where possibly the first U.S. insurer, The Friendly Society for Mutual Insurance of Houses Against Fire was founded in 1736. But it only last several years.
In 1850, Charles Lowndes started an insurance agency which he called C. T. Lowndes & Company. It remains in the Lowndes family.
The 1854 a hurricane battered Charleston with high winds and flooding, but the early policies did not provide wind or flood insurance—so it is likely the agency’s first major catastrophe was a fire in December 1861 that destroyed 540 acres of buildings in town.
The Green Tree?
Another reader comments: “Where is the [Green Tree] in your article?”
We saw the green tree—the (very collectible) fire mark of the Mutual Assurance Company for Insuring Houses from Loss by Fire in Philadelphia.
The company no longer exists so it wasn’t included on the list, but admittedly that omission left out some interesting insurance history.
The Mutual Assurance Company in Philadelphia was organized by former policyholders of the Philadelphia Contributionship because in 1781 it had decided to no longer insure any building that had trees near it. The Philadelphia Contributionship felt that trees were a fire hazard and interfered with the fire fighters' efforts. The fire mark selected by The Mutual Assurance Company was a tree in full foliage, and the company quickly became known as the "Green Tree."
The Mutual Assurance Company merged into the National Grange Mutual Insurance Company in 1996. (Thanks to the very informative website of the Mutual Assurance Society of Virginia for the information).
Vermont Mutual also wrote in with additional information since the list was published. You can see their slide here.