Metlife Inc: The Billion-Dollar Insurance Company Origin
How was this insurance company called Metlife built? Is Metlife Inc actually a billion-dollar insurance company? And what are the things you need to know about Metlife before buying a policy with them?
The Metropolitan Life Insurance company started 151 years ago.
Organized by a group of New York City businessmen in 1863, the National Union Life and Limb Insurance Company began business in July 1864 insuring Civil War sailors and soldiers against wartime-related disabilities.
It was a difficult beginning for Metlife. By the end of 1864, National Union had written only 17 life and 56 accident policies, and was in last place among the 27 life insurance companies operating in New York State and was running a deficit of $1,400.
After five difficult years in business and several reorganizations and name changes, President James R. Dow, (a medical doctor) and the board of directors decided to drop the casualty business and focus solely on life insurance business. And so began Metropolitan Life Insurance Company.
When MetLife opened for business on March 24, 1868 (selling a small number of policies on that date) the telephone had not yet been invented and electric lights were still uncommon.
The population of the United States was approximately 37 million, and there were 37 states in the country. The company’s first home office consisted of two rooms – enough space for its six employees.
This new venture also faced difficulties. A severe business depression that began in the early 1870s rapidly put half of the 70 life insurance companies operating in New York State out of business.
Only very large, long-established ordinary life insurance companies remained strong. Policy lapses over successive years forced the company to contract until it reached its lowest point in the late 1870s.
In 1879, MetLife President Joseph F. Knapp turned his attention to England, where “industrial” or “workingmen’s” insurance programs were widely successful.
American companies had not bothered to pursue industrial insurance up to that time because of the expense involved in building and sustaining an agency force to sell policies door to door and to make the weekly collection of five- or ten-cent premiums.
How Metlife Became The America’s Largest Life Insurer
By importing English agents to train an American agency force, MetLife quickly transferred successful British methods for use in the United States.
By 1880, the company was signing up 700 new industrial policies a day. Rapidly increasing volume quickly drove down distribution costs, and the new program proved immediately successful.
The MetLife agent became an important person in the lives of these striving families.
MetLife developed manuals which guided agents to call at a home at the same time each week to ensure familiarity and contact.
In the process of collecting premiums, insurance agents listened to the problems, concerns, and hopes of their clients.
So successful was this approach that by 1909, MetLife became the nation’s largest life insurer in terms of insurance in force, a leadership position they continue to hold today in North America
By 1930, MetLife insured every fifth man, woman, and child in the United States and Canada.
The company financed the construction of the Empire State Building in 1929 as well as provided capital to build Rockefeller Center in 1931.
During World War II, MetLife placed more than 51 percent of its total assets in war bonds, and was the largest single private contributor to the Allied cause.
In 1981, MetLife purchased what became known as the MetLife building for $400 million from a group that included Pan American World Airways.
How MetLife Insurance Became “Systemically Important” To The American Economy
In 2000 Metlife moved to become a public company. With an initial public offering (IPO) from being a mutual insurance company operating for the benefit of its policyholders. Policyholders received some stock in the new company in this process.
Over the years from 1992 to date Metlife have bought up some other insurance firms or entered a partnership with them.
Insurance Companies Acquired By MetLife Insurance Since 1992
Merging with United Mutual Life Insurance Company
Acquired Executive Life’s single premium deferred annuity business, MetLife also acquired the firm’s life insurance business.
Acquired New England Mutual Life Insurance Company
Acquired Security First Group
Acquired Lincoln National Corporation’s individual disability income unit.
Bought out reinsurance provider GenAmerica Corporation , as well as its subsidiaries, Reinsurance Group of America and Conning Corporation
Acquired Grand Bank of Kingston, New Jersey, which was renamed MetLife Bank.
Acquired Citigroup’s Travelers Life & Annuity and all of Citigroup’s international insurance businesses
Bought American Life Insurance Company from AIG
As a result of its expansion, it was listed by the government as “systemically important” to the American economy. Otherwise known as “too big to fail”.
It’s listed within the first 50 of the fortune 500 companies.