The Beginnings of Accident and Health Insurance

From the beginning of the modern industrial era, loss of family income and consequent distress has often resulted not only from the death, but also from the serious sickness or injury of the breadwinner.

For this reason workers often banded together for their mutual protection in friendly societies, lodges, and other organizations, and made provision for disability benefits as well as for death benefits. It was natural for men facing common hazards to be drawn together. Thus, in many instances, mutual benefit associations of working people were organized in one plant or in a number of plants engaged in similar lines of business, and whole life insurance became available.

When affordable life insurance became a common, it was natural that free insurance quotes for the risk of injury or sickness should be provided as well. The most rapid development in Group Accident and Health insurance has been in recent decades and in close association with the growth of Group Life insurance.

The Metropolitan was among the pioneers in this country in developing Accident and Health insurance on the Group plan. At the time of the launching of the welfare program in 1909, Vice-President Fiske announced the intention of the Company to engage in the business of Health insurance.

His announcement dwelt upon the increasing role that the Metropolitan was playing in the field of social service and indicated that, if the demand were adequate, the Company would be prepared to enter the field of insurance against sickness, disability, and old age. They would even go so far as to offer health insurance quotes and online life insurance quotes.

This was a part of a broad program which Mr. Fiske envisioned to make the Metropolitan a more effective instrument for the security of the family, whose protection was increasingly engaging the attention of the American people. The plan was hailed as an important step forward in meeting the needs of working people, who up to that time had few of the protections which social insurance schemes had made available to the industrial population abroad.

Mr. Fiske had great faith that an organization like the Metropolitan, with its high order of technical skill and extensive Field organization in contact with millions of people, could, on a voluntary basis, extend the necessary coverage rapidly and effectively.

The Charter under which the Metropolitan was then operating limited the company's business to life insurance and annuities. Before the company could enter the new field of Accident and Health insurance, it was necessary that the New York Insurance Law be amended to permit the required changes in the Companies Charter. These became effective in 1913, and permitted the writing of Accident and Health insurance.

An additional change in the Charter was required when the company was made mutual in 1915. These amendments enabled the Metropolitan to write, first, group contracts providing life and accident insurance. They had several low cost life insurance policies for term life insurance as well as whole.

When the Company first explored the possibilities of writing Accident and Health insurance, it was confronted by the fact that the field had not been fully developed in this country, and that there was a scarcity of basic data. Accordingly, in 1912, the Company sent some of its Officers, including James D. Craig, then Assistant Actuary, to Europe to study the subject and to seek the advice especially of the leading British actuaries.

The Friendly Societies and other organizations in England had by this time accumulated a large experience and had already established the groundwork for the business. A considerable amount of material was collected and brought back, but there was no way of knowing how closely the rates of sickness abroad would represent conditions prevailing in our country.

Despite these difficulties, the Company decided to go beyond term life insurance and offer Health insurance as well, hoping to become the best life insurance company with the best life insurance policy, beginning on a limited and more or less experimental scale.

Accordingly, in July 1914 the Disability Insurance Division of the Company was created, and put under the charge of Dr. Lee K. Frankel, then Sixth Vice-President, who was responsible for the Companies welfare activities. In 1921 this work was absorbed by the growing Group Division under the leadership and direction of Mr. J. E. Kavanagh, then Third Vice-President, and of Mr. A. C. Campbell, then Superintendent of the Group Division.