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How This Billion-Dollar Insurance Company Called Metlife Inc Was Built


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.

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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.

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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.

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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.

Related: How to Choose the Best Life Insurance Company

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.

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