The Proper Conduct of a Life Insurance Company

Almost as soon as he took office at the Metropolitan Life Insurance Company, Mr. Fiske addressed himself to widening the field of the company?s operations with a reorganization of the practically defunct ordinary department. The little ordinary business which had been on the books prior to the opening of the industrial department had shrunk to even less by 1891. The Metropolitan had become virtually an industrial company.

The Agents were concentrating on the writing of the weekly premium business. However, Mr. Fiske, with a farsighted view of the general improvement in standards of living, was convinced that the more than 4,000 agents in the field, coming into frequent contact with hundreds of thousands of families, had a rich opportunity to serve many of these people more effectively.

Large numbers of policyholders, schooled from childhood in the value of life insurance through their industrial policies, would also be in the market for larger policies on the ordinary plan. To such persons, the lower cost of the latter type of insurance would make available a larger amount of family protection.

To launch this venture was a stupendous undertaking. The agents then were, for the most part, a poorly trained and shifting group. Could they be trusted to carry the message of ordinary business convincingly to a more exacting public? Many had their doubts. But Mr. Fiske made a decision from which he never deviated: that every agent of the company must henceforth be of such high caliber that he could also conduct the ordinary business successfully.

He laid out permanent plans for instructing the agents regarding every phase of the new business, including the types of policies and plans available in competitive organizations as well as in the Metropolitan. Most agents welcomed this enlarged opportunity to increase their usefulness and to write the new line of business. As the earnings of the men increased, and the scope of their work widened, the job of ?agent? attracted men of higher and higher caliber.

Yet it was no easy matter in the early 1890?s to branch out into the field of ordinary insurance, or even home owner?s insurance (http://cheap-insurance-rates.com/home/). Many of the evils which had driven the Metropolitan out of that field more than a decade before were still rampant. There was this difference, however: the company had now been built up to the point where it was financially stable enough to make a forceful bid for business in the face of the competition of tontine and semitontine insurance.

These speculative policies promised to those policyholders who continued their insurance for a specified period, the surpluses accumulated by the dividends and paid-up values forfeited by those who dropped out of the group in the interim. This type of insurance, which paid large commissions to agents and promised large future dividends to the insured, was still in the full tide of popularity.

Mr. Fiske knew that this was a dangerous practice, and he would have none of it. In this, he anticipated by 15 years the exposures of the Armstrong Investigating Committee. The new ordinary policies of the affordable life insurance (http://www.youtube.com/watch?v=XLg8vXB2z-E) company were to be without such speculative frills?written at the lowest possible cost, preferably in limited amounts, on better circumstanced wage earners and salaried workers.

The keynote of the new department was sounded in the first manual issued to the Agents: "The Metropolitan believes the time has come when the plain, commonsense men who make up the bulk of life insurance policyholders are looking for a plain business contract. By plain business contracts we mean those that tell their story upon their face; which leave nothing to the imagination; borrow nothing from hope; require definite conditions and make definite promises in dollars and cents. The company would have no part in the current extravagances of the business.?

This early doctrine has been called the "creed" of the company and it has been the platform to which the company has steadfastly adhered. It enabled the Metropolitan to stand out as a veritable fortress for the proper conduct of ordinary insurance.

Sarah Martin is a freelance marketing writer based out of San Diego, CA. She specializes in the history of business, finance, and insurance. For affordable life insurance please visit http://www.equote.com.