The Past
around today first surfacing within a 30-
year period. The company that would
become New York Life was started in
1845; same for National Life Insurance Company in 1848; MassMutual
in 1851; Northwestern Mutual in 1857;
Equitable (now AXA Equitable) in
1859; Guardian Life in 1860; John Hancock in 1862; MetLife in 1864; Union
Central in 1867; Pacific Life in 1868;
Genworth Financial in 1871; and Prudential in 1875.
The boom cooled considerably during
the depression years of 1871-1874, with
46 life insurance companies ceasing
operations. But growth continued after
that, buoyed by the fact that Congress
exempted life insurance when it created
the income tax in 1913, largely because
it was seen as providing a safety net for
citizens. Life insurance sales rose dra-
matically following World War I, and
by the eve of the Great Depression,
there were more than 120 million life
insurance policies — roughly equiva-
lent to one for every person living in
the United States at that time.
More life insurance companies
emerged following World War II, and
the number eventually peaked at 2,343
in 1988. It has fallen steadily since, primarily due to mergers and acquisitions.
With an aging sales force and a penchant for targeting the affluent market
at the expense of a neglected middle
market, the U.S. life insurance industry
currently finds itself trying to reverse a
scary trend. LIMRA’s well-publicized
2010 report revealed that only 44% of
U.S. households have individual life insurance coverage — a 50-year low.
In its more than 250 years in America, the life industry has had to overcome a number of serious challenges.
Among them: the insurance of slaves
prior to the Civil War; an outright refusal to insure some segments of the
population and areas of the country;
the folly of deferred dividend or “
tontine” policies; race- and gender-based
premiums; internal and external fraud;
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wars and health epidemics; market
crashes; and tax and regulatory challenges.
The next chapter of the industry’s history will answer questions about that gap
in insurance coverage, as well as some
serious challenges on the legislative horizon. Will there be continued attacks on
life insurance’s favorable tax status in the
wake of the industry’s increased focus on
the affluent market? Is a universal fiduciary standard on the way, plus a possible
switch from state to federal regulation of
the insurance industry?
Stay tuned. In the meantime, we hope
you enjoy our pullout History of Life
Insurance timeline poster in this issue,
and remember to check out the expanded online version at www.LifeInsur-
anceSelling.com/timeline, which also
includes links to videos and company
history timelines. While we have tried
to be comprehensive, certainly we have
not been able to round up all worthy
inclusions. But as the online History
of Life Insurance timeline is a living,
breathing document, we can add to it. If
you have suggestions for additional entries, please email them to banderson@
sbmedia.com.
