The Introduction of the Prudential of London

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It is known that President Dryden of Prudential and President Knapp of Metropolitan were both close friends of Prudential of London. Both were able to see the operation of the business firsthand when they went to London. They were treated with every kindness by Stewart L. Woodford (the Metropolitan’s Attorney), and Mr. Knapp. They returned with a clear understanding of management and completed the file with all the necessary forms for a complex business like industrial insurance.

The company’s records show that procedures and forms of Prudential of London were strictly followed, which undoubtedly contributed to its immediate success. Obviously, there were important adjustments that needed to be made to American conditions. For example, the basis upon which reserve liability was calculated was fundamentally different. A company could only transact business in the United States if it was life insurance or cheap auto insurance. To do so, it had to have reserves that were calculated on the net premium basis. This made it more difficult for American companies to keep larger reserves than the ones on similar business in England.

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It was difficult to calculate premiums in the early days before mortality experience and the expense rate for such business were known. The Company’s Actuary James M. Craig was able to launch the business safely and correctly. On November 17, 1879, 34 Industrial policies were issued by the Metropolitan for $3.95 per week premiums. There were 5,143 policies totaling $516,618 in face value, and the Metropolitan’s industrial business was already on the books before the year ended. The helm realized that the new venture was meeting an actual need. The Metropolitan’s industrial business had outsold the other two companies by the end 1880.

As the company expanded, there was no sign that it was insecure. The Metropolitan had the greatest advantage due to the fact that it brought from England a large group of men who were well-trained in life and home insurance. This was a historic decision as it is the best transfer of old-world marketing techniques in the history industry. It appears that the first group of 21 men arrived in 1880. The men had all been trained well, with most of them previously having worked for the Prudential of London.

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These included the energetic old-timers Goldthorpe and Higginbotham, Booths, Selkirks, Shackletons, Roberts, Staniland-men, who were instrumental in making Metropolitan history in its early days. They were most often appointed as assistant or superintendents of districts offices in larger cities. Then they set about building a strong field organization. Importations from overseas grew rapidly. Brice Collard commuted literally between New York City and London, signing up over 800 potential field men in the country.

It is estimated that around 2,000 people, together with their families, came over as a result of this direct migration. In his 1897 company history, Mr. Craig stated that “To these, in additional to its own home force was assigned the task; of educating an efficient body of coworkers; training and perfecting them in the complex matters of bookkeeping, accounts and the many forms inherent in a business of such detail.