USA > Connecticut > Tercentenary pamphlet series, v. 3 The Beginnings of Roman Catholicism in Connecticut > Part 6
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The honorable and business-like manner in which those companies have met the exactions of this emergency, has secured to each an enviable position in the insurance field.
The Connecticut Fire Insurance Company, while not able to pay its losses in full, effected a compromise with its creditors and reduced its capital to a nominal figure. Subsequently, however, it increased its capital to the full charter limit and immediately resumed business.
At this historic conflagration in Chicago, scenes similar to those enacted at the New York fires of 1834 and 1845 helped to restore confidence in the dazed minds of the sufferers. When news of the fire reached the office of the Phoenix Insurance Company, President Kellogg tele- graphed to Marshall Jewell, a large stockholder and a director who happened to be in Detroit, asking him to do what he could in a personal visit. Woodward in his Insurance in Connecticut related his efforts:
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On the morning of October 13th Governor Jewell stood on the bank of the river overlooking three thousand flame-swept acres from which a mighty city had vanished. Around was a surging, sullen, half-crazed, despairing crowd, which seemed to feel that even the foundations of the earth were crumbling with the destruction of their fortunes. Aware that the Phoenix had both the means and the will to meet every claim, Governor Jewell, not less prompt to act than quick to see, lost no time in making known the purpose of the company. Mounted on a dry-goods box ... he announced that the Phoenix would pay all losses in full, and offered to draw his check on the spot for any claim approved by H. H. Magill, general agent of the western department. . .. Immediately the Tribune dropped from its window a huge placard, announcing that the Phoenix, of Hartford, had begun to pay its losses in full. As the news spread from one to another, the multitude cheered, and cried, and laughed by turns.
IV
AFTER the Chicago fire, there were eight Connecticut stock fire insurance companies licensed to do business. Of these, four were in Hartford: Aetna, Hartford, National, and Phoenix, with total assets of $11,768,600.33; while the Fairfield County of South Norwalk, the Mutual Security of New Haven, the Norwalk of Norwalk, and the Peoples of Middletown together had assets of $526,906.1I.
From the Chicago fire to the San Francisco earthquake and fire was a period of thirty-five years of steady growth in Connecticut fire insurance-a growth and strength that were needed to meet the extraordinary claims from that extraordinary catastrophe. On April 18, 1906, the San Francisco earthquake occurred. The resulting fire raged for three days. Reports from San Francisco could not greatly exaggerate the loss that faced the citizens or their despair on viewing the smoking ruins.
IO
A few days after this event, the finance committee of the senate was holding hearings in Washington on a proposed law regulating life insurance in the District of Columbia. At one session a man who had been a particu- larly active advocate of the restrictions adopted by the state of New York urged the senate committee to adopt similar restrictions. He followed up his argument with a statement that the government should also pass a law restricting the actions of fire insurance companies. "For," said he, "not a fire insurance company in the country today in the face of this disaster knows whether it is solvent or not."
Word of this statement reached one of the senators from Connecticut, Morgan G. Bulkeley, who immediately asked and received permission to be heard before the committee. He declared :
The statement reflecting upon the solvency of Connecticut fire insurance companies has been carelessly made by a man entirely ignorant of Connecticut fire insurance companies. I speak from the experience of a lifetime in Hartford and from that of a director of one of the largest fire companies in that city; and I do unhesitatingly affirm that the Hartford com- panies will pay in full every claim against them.
How well Senator Bulkeley's faith and confidence in Hartford fire insurance companies were grounded the following quotation from the report of the Connecticut insurance commissioner for 1907 will testify:
On October Ist, [less than six months after the disaster] I requested our home companies to report on the situation. That report showed that the companies had adjusted and paid practically all their losses in San Francisco. The figures are startling. The Connecticut companies alone paid in round numbers eighteen million dollars in that great disaster, and all of those companies are still in sound financial condition
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with no doubt as to their ability to protect their policy-holders the country over. The record is unrivaled in the history of fire insurance.
The estimate of the character of corporations, like the estimate of the character of individuals or nations, is formed from a study of the manner in which they meet crises in their lives. Consequently, the four tragedies here recorded provided a dramatic background for reading the character of Connecticut fire insurance companies.
V
ON January 1, 1907, there were seven Connecticut stock fire insurance companies with combined assets of $59,147,289.64. Of these, six: Aetna, Connecticut, Hart- ford, National, Orient, and Phoenix, were Hartford companies; the Security was domiciled in New Haven.
From 1907 the history of fire insurance in Connecticut has been a record of growth and strengthening and also of the addition of companies incorporated by the state. The table on the opposite page gives a list of the stock fire insurance companies operating in Connecticut De- cember 31, 1934.
The earlier fire insurance companies deserve the credit for beginning the important work of assembling data and working out scientific methods which have transformed insurance from a business more or less speculative in character into a profession, able to minister wisely to economic and social needs because of its scientific mastery of the immense body of relevant information. The com- panies engaged in each particular line of insurance have owed their success, in no small measure, to the thorough- ness with which they have amassed necessary informa- tion, perfected their control of it, and governed their procedure by the principles deduced therefrom. This
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CONNECTICUT STOCK FIRE INSURANCE COMPANIES
Capital
Assets
Surplus
Aetna
Hartford
$ 7,500,000
$ 43,989,433
$ 15,677,243
Automobile
Hartford
5,000,000
18,368,29I
4,667,679
Connecticut
Hartford
2,000,000
19,130,425
11,013,713
East and West
New Haven
1,000,000
2,739,590
1,176,602
Hartford
Hartford
12,000,000
84,343,198
33,939,770
Mechanics & Traders
Hartford
1,000,000
4,262,21I
2,027,086
National
Hartford
5,000,000
40,001,773
15,831,217
Orient
Hartford
1,000,000
6,113,615
2,750,539
Phoenix
Hartford
6,000,000
37,779,222
21,250,119
Rossia of America
Hartford
1,500,000
6,795,708
1,706,508
Security
New Haven
2,000,000
9,657,30I
2,982,791
Standard
Hartford
1,000,000
4,475,535
1,468,070
Travelers Fire
Hartford
2,000,000
18,473,116
2,558,842
World Fire & Marine
Hartford
1,000,000
4,819,488
2,567,022
$48,000,000
$300,948,911
$118,717,206
valuable and indispensable type of experience alone has not sufficed; for the larger managerial responsibilities the highest type of business acumen, and the finest kind of business integrity have been proven essential. The failure of many companies in the earlier days, and the continued success of a few have provided unimpeachable evidence of these truths and have created a body of honored tradi- tions which have for many years guided the Connecticut companies and assured them unquestioned prestige. As Woodward wrote, in words even truer today after the lapse of nearly forty years3 :
Here leadership has been gained, not by luck or accident or favoring circumstances, but by profound study of the facts and principles involved in the business, by high native intelligence, sharpened to a keen edge in frequent adversities, by patient endurance through periods of misfortune, by heroic courage in meeting exceptional calamities, and not least by scrupulous integrity in dealings with the public.
The business, too, is conducted in a cosmopolitan spirit. Present managers have won their places not through favorit- ism or inherited influence, but through merit alone. Ability, character, technical skill, special gifts are welcomed from every quarter.
VI
As already stated, the first insurance company to be incorporated in Connecticut was the Mutual Assurance of Norwich which received its charter in 1795 and is still in existence. Nearly forty such mutual companies have been chartered in the state; many of them continued for a few years and then faded out. Some, however, have grown strong, and most of the survivors can show more than two thirds of a century of service. They all write
3 This paragraph has been substituted by the editor for two brief para- graphs of less specific character by the author.
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policies in a restricted locality and do not endeavor to grow large in assets (at the expense of safety in under- writing) by expanding their activities.
The following table describes the companies in exist- ence on December 31, 1934, nine of them being small local corporations:
Incorporated
Assets
Hartford County
Hartford
183I
$3,156,930
Litchfield
Litchfield
1832
155,378
Middlesex Mutual
Middletown
I866
2,196,696
New London County
Norwich
1840
679,047
Danbury
Danbury
1850
Farmers'
Suffield
1853
Guilford
Guilford
1903
Harwinton
Harwinton
1856
Madison
Madison
1855
241,762
Mutual Assurance
Norwich
1795
Patrons'
Glastonbury
1888
Rockville
Rockville
1868
Washington
Washington
1862
$6,429,815
.
There are also two small specialized mutual insurance companies: Connecti- cut Valley Mutual Hail and Hartford County Tobacco Growers'.
VII
IN 1863 James Goodwin Batterson, a Hartford business- man who was born in the nearby town of Bloomfield, Connecticut, while traveling in Europe, became inter- ested in accident insurance as it was carried on there, and made a study of it with a view to introducing it in America. On reaching home he proceeded at once to interest his friends in the project, but found difficulty in persuading his fellow townsmen of the need for this in- surance. At the end of a friendly but heated debate be- tween Batterson and some of his business friends whom he had waylaid as they were starting home for their midday dinner, James Bolter, president of the Hartford
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Bank, asked, "What will you charge to insure me for $5,000 against accidental death on my way home to dinner and return?" "Two cents," snapped back the answer, and the two cents passed from Bolter to Batter- son. Bolter returned to his bank after his noonday meal and Batterson retained his two cents, which are now framed and hung in the office of the Travelers Insurance Company.
Whether or not this was the convincing argument for the need and safety of accident insurance, Batterson, in that same year, secured his charter and the stockholders for his company. Originally it was planned to insure against the risk of travel only. This accounts for the name of America's first accident company: The Travelers In- surance Company. The following year, however, the charter was broadened to allow the company to provide protection against other hazards.
Many and difficult were the problems that lay before this pioneer company. There were no records of accidents in the various mills and manufacturing plants of the country which would furnish the data for calculating the premiums that would be required to insure men em- ployed in the different occupations. Premium rates must be formulated by trial and experience, and many a similar company formed in the years succeeding the birth of the Travelers was buried by the losses resulting from inexperience in this hazard of accidents-and human nature. Only one of these unhappy companies was a Hartford corporation.
In 1865 the Travelers began to write life insurance on the nonparticipating plan. Its success in the accident field of underwriting enabled it safely to assume the heavy expense incident to the early years of writing life insurance at low stock rates. In addition, as society
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changed its habits of life and new risks to life, health, and property appeared, the Travelers has continually broad- ened its field of operations to provide protection against such hazards. The Travelers was the first company in this country to become a "multiple line company": that is, one that, through one or more of its various lines, can furnish practically any form of protection a citizen may need. The success of the Travelers lured other Connecti- cut companies to assume additional lines of insurance. The table on the next two pages shows the extent to which Connecticut companies are guarding their policy- holders against the various hazards to which they and their property are daily exposed.
No history of accident insurance in Connecticut would be complete without special mention of another form of protection entirely different from those already described. Woodward, in his book, Insurance in Connecticut, has well recounted the inception of this type of insurance:
In the year 1857 a coterie of young men in Hartford, drawn together by congenial aims, organized the "Polytechnic Club," with the view primarily of investigating and discussing ques- tions of science in relation to practical utilities. Among the members were Elisha K. Root, who succeeded Colonel Colt in the presidency of the armory, Francis A. Pratt, Amos W. Whitney, E. M. Reed, Professor C. B. Richards, of Yale; Charles F. Howard, Joseph Blanchard, J. M. Allen, and others. Several members of this earnest but unpretentious club have since won international fame.
As a power coming more and more into use, but then under very imperfect control, steam became a favorite topic in the club. The results of foreign study and experiment were eagerly appropriated. Members discussed the causes of boiler ex- plosions and means of prevention. It became known that the Manchester Steam Users' Association had already been organ- ized in England with the view of preventing such accidents by periodical inspection. Under the system as started there the
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CONNECTICUT ACCIDENT INSURANCE COMPANIES Net Premiums Written during 1934, According to Classes of Business
Accident and Health
Auto Liability
Other Liability
Workmen's Compen- sation
Fidelity and Surety
Plate Glass
Aetna Casualty and Surety
$
16,024.46 $ 4,010,442.83 $
844,478.15 $
921,127.77 $ 5,083,530.34
$ 501,097.90
Aetna Life (Acc. Dept.) ..
6,285,834.67
5,559,489.74
3,872,898.72 703,226.17
5,727,303.55 992,764.47
467,510.92
134,379.59
Connecticut General (Acc. Dept.) . ..
1,611,612.25
Connecticut Indemnity .
190,920.44
Connecticut Plate Glass
First Reinsurance. . .
194,340.48
256,449.81
98,813.54 3,603,341.09
15.20
Hartford Accident and Indem.
791,753.ยบ3
8,454,395.53
6,760,872.13
-- 2,720.07 5,064,381.21
466,717.94
Hartford Steam Boiler.
Travelers (Acc. Dept.).
12,214,437.24
15,110,548.42
5,875,210.23
13,990,901.25
Travelers Indemnity.
359,592.71
238,593.99
677,934.13
$21,247,217.04 $35,965,003.79 $15,236,561.89 $28,392,984.37 $10,612,702.40
$1,780,129.56
Century Indemnity
133,214.91
2,023, 164.31
CONNECTICUT ACCIDENT INSURANCE COMPANIES Net Premiums Written during 1934, According to Classes of Business (cont.)
Burglary and Theft
Steam Boiler and Machinery
Auto Property Damage and Collision $3,416,950.18
Other Property Damage and Collision
Various
Total Net Premiums
Aetna Casualty and Surety
$1,627,933.05
$ 135,785.93
$ 99,997.71
$462,419.42 $17,119,787.74
Aetna Life (Acc. Dept.) ..
Century Indemnity
196,941.75
630,133.15
18,023.35
5,299,358.62
Connecticut General (Acc. Dept.)
62,205.89
253,126.33
Connecticut Plate Glass
First Reinsurance. . .
26,410.59
1,544.56
630.56 182,951.83
575,484.67
Hartford Accident and Indem ..
1,710,882.76
73.71
2,861,234.48
3,766.03
29,900,369.74
Hartford Steam Boiler
5,867,443.42
5,867,443.42
Travelers (Acc. Dept.)
47,191,097.14
Travelers Indemnity. ..
2,172,024.95
1,216,293.02
5,284,523.97
257,652.32
10,206,615.09
$5,734,193.10
$7,219,596.08 $12,256,592.23
$559,255.77
$466,185.45 $139,470,421.68
21,445,526.68
1,611,612.25
Connecticut Indemnity .
manufacturer paid a certain sum annually for examination, receiving in return either a certificate of the safe condition of his boiler or a report condemning it, but the certificate, like those in some places since issued by direct appointees of the state, involved no pecuniary obligation whatever, and if disaster occurred, the paper, while relieving the holder from the charge of carelessness, entitled him to no indemnity.
Although not one of the members of the Polytechnic Club was connected with insurance, the body unconsciously drew inspiration from the local predominance of the interest, which was then making Hartford famous as the home of skilled underwriters. In the course of the debates on the subject the attention of members was attracted to the feasibility of com- bining a guaranty with the inspection, thus giving both parties to the contract a pecuniary interest in the safety of the boiler. So far as known, the conception had not at that time material- ized elsewhere. Although distinctly evolved in the club, the seminal idea waited several years for further development on account of the intervention of the Civil War.
A charter was procured in June, 1866, incorporating The Hartford Steam Boiler Inspection and Insurance Company, "for inspecting steam boilers, and for insuring against loss or damage to property arising from explosions or other accident in the use of steam boilers."
Their plan of combining inspection service with a guaranty in the form of insurance was so new that at first there was a reasonable doubt whether the project would be successful. But once again the story of Hartford in- surance was retold-the story of character written into Hartford companies by Hartford men. The confidence of the public-plus the faith and persistence of the projec- tors, themselves-finally won. Today, in the Hartford Steam Boiler Inspection and Insurance Company, there exists a strong, successful organization that is unique in this respect: only a small portion of its premiums is paid out in satisfaction of claims, while by far the greater part is invested in a humane, invaluable service-the pre- vention of accidents.
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VIII
IN spite of the prominence attained by fire and marine insurance, after the first Connecticut company was founded in 1795, more than half a century passed before the state was ready to charter its first life insurance company. Even then, the idea was opposed by many good people who felt it was irreligious and immoral to sub- stitute reliance on a human agency for confidence and trust in Divine Providence. A typical incident was told by Woodward in Insurance in Connecticut:
Elder Swan, a revivalist famous for rough eloquence, and for the lurid colors in which he painted the terrors of the law, in a sermon at an annual state convention, resolved to crush the pernicious novelty at a blow. Rising to a climax in denun- ciation, he said: "Suppose that Jesus, on His way to the Jordan, had met John among the foothills, and to the question, 'Whither goest thou?' John had answered: 'Behold, all these years have I trusted in the God of Israel, and have been sorely pressed by many troubles. Wist thou not that I go up to Jerusalem to get my life insured?' Would the church, my hearers, have outlived the few and feeble days of infancy had treachery so foul been permitted to occur and to pass unre- buked? If lack of faith was a sin then, it is a sin now. Avoid the snares of a perverse generation and say to the tempter, 'Get thee behind me, Satan.' "
If Elder Swan were alive now and were to choose a text appropriate to Connecticut's Tercentenary, he could preach a sermon-with even greater vigor and conviction -from Psalms 118:22, "The stone which the builders refused is become the head stone of the corner."
Only a comparatively few years after similar com- panies had been organized in New York, Massachusetts, New Jersey, and Pennsylvania, the state of Connecticut, during the May session of its general assembly in 1846,
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incorporated its first life insurance company. This was the Connecticut Mutual Life Insurance Company of Hartford. Like the first fire insurance company, it has always operated on the mutual plan and it is still in existence. It has never had any capital stock. In its early years, prompt payment of claims was assured by a guar- anty fund of $50,000 provided for in the charter. When no longer needed, this fund was retired. From the outset, the company has been officered by men prominent in finance and civic affairs, who have made it an important factor in molding those practices which have given to Connecticut life insurance the enviable reputation it bears.
The formation of other life insurance companies inevitably followed the successful launching of the Con- necticut Mutual. But it was just as inevitable that they would not all succeed. Their brief histories are included, however, as a matter of record; and also because their failures indicate the extent to which they lacked the very characteristics that brought other Connecticut companies through to conspicuous success.
In 1847, the American Mutual Life Insurance Com- pany of New Haven was organized. While it had the word "mutual" in its name, it had a capital stock and was anything but a mutual company in reality. In 1878, after its name had been changed to the National Capital Life Insurance Company, it succumbed to unwise hand- ling of its assets.
The Connecticut Health Insurance Company was chartered in 1848 to insure the health of individuals. Buoyant imagination, however, ran far ahead of prac- ticable possibilities, and losses, resulting from ignorance of the hazards involved, soon caused the company to withdraw from this branch of the business. Two years later its name was changed, and as The Hartford Life
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Insurance Company, it was empowered to insure lives. For a while the company prospered and then, in attempt- ing to enter the field of group insurance by insuring ship- loads of negro slaves and coolies, it met its inevitable fate.
In 1850, the Charter Oak Life Insurance Company was organized. It began with a good directorate and it was successful in writing policies. But most of its capital stock had been paid for by notes and, in an endeavor to overcome this handicap, unfortunate financial plans were adopted. Later, its financial structure was further weak- ened by what would now be considered most unwise in- vestments. In the end, the company went into a receiver's hands in order that its remaining assets might be sold for the benefit of its policyholders.
In 1862 the Continental Life Insurance Company of Hartford was chartered, and two years later its organiza- tion was completed-with a capital of $150,000. Like the Charter Oak, this company seems to have been the financial football of certain individuals who, to say the least, were unwise. By order of the insurance commis- sioner, the Continental was placed in the hands of a receiver in 1887.
Looking from the high place which life insurance now holds in the financial structure of this state and of the nation, it is difficult to adopt even a charitable view toward these early failures. Yet, it should be remembered that in those pioneer days conditions were radically different from those now prevailing. The science of life insurance was then in its infancy. Financial resources and even available working data were often inadequate. A few individuals were actuated by private motives rather than by public welfare. Time was required to build tradi- tions and to obtain much needed experience. For the same reason, all the more credit is due to those men whose
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judgment, foresight, and ability did overcome the handi- caps of those early years, and whose courage and robust character guided Connecticut's other life insurance com- panies safely through difficult times and laid the ground- work for their present enviable position.
IX
IN 1851, at a time when the country was stirred with the thought that the way to salvation lay through total abstinence, a group of enthusiasts, among them promi- nent lawyers and philanthropists of Hartford, conceived the idea that a life insurance company which insured only total abstainers would enjoy a lower mortality than other companies. Accordingly, they organized the American Temperance Life Insurance Company under a Connecti- cut charter which required each applicant for insurance to sign a pledge of total abstinence. If the pledge was broken, the policy was to become void. Many agents of the company were temperance exhorters who, after their meetings in the various towns, gave their listeners an opportunity to serve God and insure in a good company at the same time.
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