Minnesota Mutual Life Insurance Part 2: The Growth of the Company: 1880-1950
The Minnesota Mutual Life Insurance Company Building, located in Saint Paul Minnesota, was approved for listing in the National Register of Historic Places (NRHP) by the Minnesota State Review Board in March 2017, and is currently awaiting final review and listing by the Keeper of the National Register. PVN worked with a developer to determine that the building is historically significant under NRHP Criterion A as the home office of the Minnesota Mutual Life Insurance Company and under Criterion C as an early example of an International Style office building in Saint Paul. The building is currently being rehabilitated as housing. PVN is proud to be part of a team that is leading the way in the preservation and rehabilitation of Midcentury buildings in St. Paul.
This month, PVN is featuring a series of blog posts discussing the history and future of the Minnesota Mutual Life Insurance Building.
Find the rest of the collection here.
Life Insurance in the United States in the Nineteenth Century
The mid-nineteenth century was a pivotal time for the development of life insurance in the United States. According to scholar Sharon Ann Murphy,
Life insurance [served] as a countervailing force against these dramatic societal changes [including industrialization and urbanization]… By quietly pervading the entire fabric of American middle-class life, this new industry [provided] a crucial layer of support and stability to a nation in flux, enabling–and even facilitating–the transition from a rural, agriculturally based society to an urban, industrialized one.
Of course, life insurance companies also sought to turn a profit. A dramatic increase in policy sales occurred at the close of the Civil War, which resulted in a number of new companies entering the market. Many of these new companies relaxed the qualification requirements for policyholders, but did not require high enough premiums to offset their increased risk. As a result, companies were not able to consistently pay out insurance claims, creating a loss in consumer confidence, which eventually destabilized the market and caused the entire industry to crash in the 1870s.
By the 1880s, the insurance industry in the United States was rebounding and Saint Paul, in particular, appeared to be a likely location for a prosperous and profitable insurance company. The population of the city had doubled over the previous decade, climbing from around 20,000 to just over 40,000. Similarly, the city nearly tripled in physical size during the 1880s.
Beginnings of the Minnesota Mutual Life Insurance Company
The Minnesota Mutual Life Insurance Company, originally the Bankers Association of Minnesota, took advantage of the city’s prosperity, and the company was founded in Saint Paul on August 6, 1880 in Room 15 of the Fire and Marine Building at Third and Jackson Streets in downtown Saint Paul (demolished). Under the early leadership of Russell Dorr and Charles Bigelow, the business grew slowly as the young company cycled through other leaders and a variety of operational models. At the outset, the Bankers Association of Minnesota followed an assessment model, which was the prevalent form of insurance company in the Midwest at the time. Assessment companies charged yearly dues (which fluctuated greatly from year to year and from policy holder to policy holder) and on top of those dues assessed members whenever it became necessary to pay a death claim. Life insurance policies with the Bankers Association of Minnesota were restricted to “any male person not less than eighteen nor over fifty-five years of age… as approved by the Medical Director” according to early sales brochures.
In 1884, the company changed its name to the Bankers Life Company, feeling this more accurately reflected their business. Despite growing pains, by the end of the decade the Bankers Life Company had grown to the point that it occupied two rented rooms in the Fire and Marine Building and employed “a President [Dorr], Secretary [Bigelow], Medical Director, one stenographer, and one salesman [Clarence Secor].” Salesman Clarence Secor spent much of his time on the east coast, and wrote to the home office reporting national newspaper coverage of the company.
One such article appeared in The Spectator in New York:
Financial strength has ever been a leading feature of the Bankers Life Association of St. Paul. Its progress this year makes it safe to predict that its assets will touch $1,000,000.00 in 1898. These are largely made up of government bonds, and stamps the Bankers Life of St. Paul as one of the staunchest natural premium companies in the business. ‘Not how big but how strong.’
“Natural premium” was another name for the assessment model. As Bankers Life grew, maintaining natural premiums at reasonable rates became increasingly difficult. In 1899, the company’s leadership determined that the assessment model was too tenuous and voted to transition the company to a new business model – that of an “old line” or mutual insurance agency. The mutual insurance model offered level premiums to all policyholders and required the company to maintain a minimum legal reserve of funds.
A Mutual Model
The full transition to the mutual model depended on the Minnesota Legislature to pass a bill legalizing the change in business model. Once the change to the mutual model was finalized, the Bankers Life Company would be a true mutual insurance company owned by its policyholders. This transition in organizational structure was typical of the United States insurance industry at large and improved the industry’s standing in the public consciousness. In 1901, the transition was legalized and soon after, policy holders voted to approve the transition and to change the company name to “The Minnesota Mutual Life Insurance Company.” Minnesota Mutual was now one of approximately 500 active insurance companies in the country. New York-based Guardian Life Insurance Company and Connecticut-based Travelers Insurance Company, the two companies that would eventually become Minnesota Mutual’s direct competitors, had yet to open offices in Saint Paul.
For Minnesota Mutual, the new business model was a success. By 1904, the company had outgrown its rooms in the Fire and Marine Building, and relocated to the Commercial Building at Sixth and Cedar Streets. At this time, Minnesota Mutual Life Insurance Company was operating in seven states, with the Saint Paul home office consisting of 24 in-office employees plus eight field agents. As a result of its geographic expansion, Minnesota Mutual was operating at a market share that competed with national level insurance companies, generally based on the east coast.
Over the next 45 years, despite two World Wars and the Great Depression, the company continued on its growth trajectory. By 1912, an expanding staff forced Minnesota Mutual Life Insurance Company to move again, this time to the Commerce Building at Fourth and Wabasha in Saint Paul. A vigorous market for “war risk insurance” for men in the United States Armed Forces kept the company busy during World War I. Following the war, Minnesota Mutual diversified its insurance portfolio - adding individual policies for females in 1917, and group pension plans in 1930.
In 1934, Minnesota Mutual Life Insurance Company purchased its first home office building – the 13-story Builders Exchange at Sixth and Jackson (demolished, March 1965). Initially, many of the floors served as rental space, with the expectation that Minnesota Mutual Life Insurance Company would slowly grow into the building. Impressively, growth outstripped expectations, as in 1936, the company’s insurance in force passed the two hundred million dollar mark. Again driven by war activity, Minnesota Mutual Life Insurance Company’s insurance in force doubled between 1944 and 1949, reaching over $600,000,000 (as compared to a national mean average of $125,000,000). As the country began to transition following World War II, Minnesota Mutual Life Insurance Company was poised for its next phase of growth.
 Sharon Ann Murphy, Investing in Life: Insurance in Antebellum America, (Baltimore: The Johns Hopkins University Press, 2010), 3; In her recent book, Murphy acknowledges a lack of scholarship in the area of the history and effects of the insurance industry in the U.S. and calls upon scholars to fill the gap in historiography. With regard to this application, the author was unable to locate secondary source material directly related to the history of the insurance industry in Saint Paul, Minneapolis, or Minnesota.
 Ibid, 8.
 Minnesota Mutual Life Insurance Company, “Three Score and Ten Years,” Application (Official Publication of the Minnesota Mutual Life Insurance Company Saint Paul, Minnesota), June 1949. Minnesota Historical Society Collections. The Minnesota Mutual Life Insurance Company has published additional company histories that contain very similar information: 75 Years Developing with Minnesota: The Story of the Minnesota Mutual Life Insurance Company, (Saint Paul: Minnesota Mutual Life Insurance Company, 1955). Minnesota Historical Society Collections; and Looking Ahead to Look After You, (Saint Paul: Minnesota Mutual Life Insurance Company, 1980). Minnesota Historical Society Collections.
 Minnesota Mutual Life Insurance Company, “NEWS RELEASE: 70th Anniversary”…
 As quoted in: “Three Score and Ten Years”…
 Minnesota Mutual Life Insurance Company, “Three Score and Ten Years…”; Wright, 22-23.
 James S. Machowski, A History of the St. Paul (Saint Paul: St. Paul Companies, 1988), 17. and George Malcolm-Smith, The Travelers: One Hundred Years, (Hartford: Travelers Insurance Company, 1964), 121.
 Minnesota Mutual Life Insurance Company, “Three Score and Ten Years…”
 Minnesota Mutual Life Insurance Company, “Three Score and Ten Years…”