Founded in 1851, Massachusetts Mutual Life Insurance Company ( MassMutual ) is a leading mutual life insurance company that is run for the benefit of its members and participating policyholders. The company has a long history of financial strength and strong performance, and although dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyholders every year since the 1860s.
With whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of clients, such as life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and annuities. In addition, the company’s strong and growing network of financial professionals helps clients make good financial decisions for the long-term.
MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, Inc., member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.
History
Massachusetts Mutual Life Insurance Company (MassMutual) has evolved over a long period of time, and by doing so has undergone a complete metamorphosis: from personal insurer to financial giant with $125 billion in assets. MassMutual serves over xxx million clients worldwide and provides them with life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and annuities.. The MassMutual Financial Group--the marketing designation under which Massachusetts Mutual and its subsidiaries operate--has offices in the United States, Hong Kong, Japan, Taiwan, China, Macau, Chile, and Luxembourg.
Origins
MassMutual began operating in 1851 in Springfield, Massachusetts, in a room with three chairs, a table, and a city map on the wall. George W. Rice, a young insurance agent who was selling policies for Connecticut Mutual Life in Hartford, Connecticut, had wanted to open a business in neighboring Massachusetts. Like Connecticut Mutual, the new agency was a mutual company--a company owned by its policyholders.
Rice's Massachusetts Mutual was one of about a dozen mutual companies that had sprung into existence between 1843 and 1851. Mutual companies became attractive vehicles in the nascent insurance industry because they required little working capital, but a Massachusetts state law required an initial stock subscription of $100,000 for insurance companies, so Rice encouraged 31 investors to purchase stock in the new venture. In 1867, MassMutual retired the stock and became the mutual company it was intended to be.
Caleb Rice, a relative of George W. Rice, was the company's first president. He steered MassMutual's growth for its first 22 years, making him the longest-serving president in the company's history. Rice wore many hats. A former lawyer, state legislator, and county sheriff before coming to MassMutual, Rice was elected the first mayor of Springfield in 1852. MassMutual sold its first policy on August 2, 1851, to Harvey Danks, a MassMutual agent. Soon after, roaming agents like Danks sold policies to New England homeowners and workers. At higher premiums, MassMutual also insured railway and steamship workers, gold-rush adventurers, and people traveling south of the Mason-Dixon Line.
For the next several decades, MassMutual's expansion mirrored that of the United States. In the 1850s, the country was expanding westward. The company followed suit. By 1855, agencies were functioning in New York City, Cleveland, Chicago, and Detroit. In 1868, MassMutual reached the West Coast--before the transcontinental railroad was completed--and established an office in San Francisco.
Between 1850 and 1900, the volume of life insurance in force in the United States rose from $96 million to nearly $7.6 billion. Expansion and aggressive marketing were largely responsible for the growth. The late 19th century was an age of great technological advancement and ushered in a new era for life insurance companies. In 1885, MassMutual bought its first typewriter. Soon after, telephones were installed, which facilitated better communication between agents and the home office.
In 1886, Colonel Martin Van Buren Edgerly was named president. Edgerly had joined MassMutual in 1859 and spent his entire career with the company. He was the first of many career men to take the helm of MassMutual, which tends to look inward for leadership.
Regulated Growth: Late 1800s-Early 1900s
Edgerly oversaw a decade of carefully regulated growth and was replaced in 1895 by John Hall. Hall steered the company through the late 19th century, including the Spanish-American War of 1898--during which the company took minimal losses--and through the numerous business scandals of the early 20th century.
In these years of the robber barons, many insurance companies played fast and loose with laws governing their conduct. To encourage agents to sell more, firms paid excessive commissions. Dishonest executives used the sizable assets of their companies to control other corporations as well as for private purposes. MassMutual, however, kept clean and continued its regulated growth: the home-office staff grew from 16 in 1884 to 100 in 1907. MassMutual also continued, without change, its practice of selling only life insurance policies payable in a lump sum at death or maturity. The company's first innovation came in 1901, when it began offering policies under which proceeds would be paid over a fixed period or for life.
The company was not a target of the 1906 Armstrong Committee investigation, which uncovered many abuses by New York life insurance companies. The commission had been appointed by the New York state legislature, and its findings affected life insurers throughout the United States. Henceforth, companies were required to distribute dividends annually, to restrict the size of agents' commissions, and to regulate the nature of their investments. The investigation constituted a purge of sorts and signified the industry's maturation.
In the wake of the Armstrong investigation, insurance companies offered more services and products to attract customers who had been disenchanted by the exposed corruption. In 1914, MassMutual instituted a premium waiver in the event of disability, and in 1918 the company designed policies with clauses that provided income in the event of disability. Few significant losses were posted during World War I, although the influenza epidemic of 1918 hit the company hard. By 1924, there were 400 home-office employees, and the amount of insurance in force passed $1 billion.
The stock market crash of 1929 and the ensuing Great Depression hit MassMutual hard. Death claims and policy lapses increased greatly due to an unusual number of suicides and general economic hardship. So pervasive were policy terminations that the company's insurance in force on July 1, 1932 was less than it had been at the beginning of the year. MassMutual, aside from being an insurer, became a last resort for desperate people seeking financial help. The company doled out millions of dollars in low-interest policy and premium loans. In 1932 alone, the company made $26 million in new policy loans, and from 1929 to 1937 the company made $129 million in policy loans and another $63 million in premium loans. The Depression also saw the introduction of new products. In 1930, MassMutual introduced its first family-income policy. Seven years later, the firm issued its first substandard risk product, and in 1938 the first pension trust policy was issued. Under the leadership of President William H. Sargeant and Bertrand Perry, who succeeded Sargeant in 1936, MassMutual stumbled, but emerged from the Depression and World War II virtually unscathed.
Finding Postwar Opportunities
When Alexander MacLean assumed the presidency in 1945, he became the first actuary to take the reins of the company. Consequently, many new products and services were introduced during his tenure. As unions and collective-bargaining units grew in strength, the atmosphere became more conducive to the development of group coverage. In 1946, MassMutual first entered the growing group business, offering group policies and managing group pensions. MassMutual's first group product was a combination pension and insurance policy for Brown-Forman Distillers, the Louisville, Kentucky-based company that produced Jack Daniels whiskey. By 1950, the group department had grown exponentially, employing 200 people in the home office and in the field.
As the postwar economy boomed, MassMutual continued its steady growth. By 1951, assets totaled $1.4 billion and the company had more than $3 billion of insurance in force. The home-office staff numbered 1,350, serving a client base of more than 700,000. There were 87 general agencies and 110 district agencies in 44 states. This decentralization was key to the company's success. The company hired general agents who in turn hired and trained local groups of agents. Successful general agents were often promoted to the Springfield home office. To further develop the strength of field agents, MassMutual instituted a training program for field representatives and encouraged its workers to complete the American College's Chartered Life Underwriter designation. The system wor
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Founded in 1851, Massachusetts Mutual Life Insurance Company (MassMutual) is a leading mutual life insurance company that is run for the benefit of its members and participating ...