The late 1840s brought a population shift as people flocked west after the discovery of gold. Nearly 300,000 people embarked on the dangerous journey to make their fortunes. Those who made it were met with harsh conditions, making injury or death likely.
Mutual insurance was a fairly new business in 1849, and while many of those going to California would benefit from the product, companies were reluctant to underwrite policies due to the risk. Those looking to finance their journeys and provide for their families turned to New York Life.
Shortly after the discovery of gold, agents began offering three-year term life policies at 3 percent over the standard premium. Taking advantage of this market, New York Life’s overall premiums doubled from 1849 to 1850. By taking this risk, agents were able to set themselves apart from the competition and gain market share. It also established New York Life as an innovator in the industry, willing to take prudent risks.
The 1860s brought rapid expansion westward, and New York Life took advantage of the growth to build out a national footprint and introduce innovative products. This decade began 30 years of growth as the US population grew from 31.4 million people to almost 63 million by 1890. The nation also added 11 new states, creating opportunities for the company to move into new areas.
New York Life grew by building a nationwide agency field system. At first, agents were appointed by the company and mostly worked part time. In 1862, it became apparent that New York Life needed to rework how agents’ jobs were structured in order to take advance of the potential for new business.
The company moved quickly to introduce the General Agency System where agents controlled large territories and had the ability to operate independently. Agents hired staff and sales managers who worked directly for them. This system rewarded agents for quickly expanding New York Life’s business throughout their territories.
And it worked. In 1862, the company issued more than half of the policies by insurers based in New York. That growth continued through the next couple of decades as New York Life became one of the “Big Three” insurers, setting standards for the industry.
The late 1800s established New York Life as one of the premier life insurers, willing to take bold steps to build market share and serve customers. By offering innovative products and structuring the company in a way that benefitted agents and clients, the company built the foundation for continued growth in the next century and beyond.
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