Sharon Ann Murphy

Securing Human Property: Slavery, Life Insurance, and Industrialization in the Upper South

Beginning in the 1830s and continuing throughout the antebellum period, life insurance expanded rapidly among the urban middle class of the Northeast as a means of protecting families against the loss of their primary breadwinner. As life insurance spread to the South, it was most strongly embraced by slaveholders. Creative southerners of both races adopted insurance to alleviate some of the most evil consequences of the slave trade, while urbanites of the South promoted insurance as a means of mitigating the untimely loss of their slave property. By the 1850s, the industry was firmly established in Richmond–underwriting the lives of slaves engaged in dangerous occupations, valued as artisans or house slaves, or hired out for work in factories and railroads–and was expanding rapidly into the other industrialized areas of Virginia. Indeed, life insurance was fast becoming a key component of industrialization in the Upper South. With the purchase of insurance, urban slaveholders demonstrated their confidence in both the longevity of the slave system itself and the value of slavery for the future of southern industrialization.

Selecting Risks in an Anonymous World: The Agency System for Life Insurance in Antebellum America

Early American life insurers found themselves facing the problem of asymmetric information, as they needed to rely on applicants themselves to provide truthful, complete answers to a standard set of questions. In an attempt to repersonalize the relationship between their boards of directors and the individual applicants, firms selected highly respected local citizens to act as their agents. These agents were expected to evaluate the appearance of candidates, unearth evidence of unhealthy family histories or questionable habits, and attest to the respectability of people writing testimonial letters on an applicants behalf. In short, the initial purpose of the agency system was not to actively solicit customers, but rather to recreate the glass-bowl mentality associated with small towns or city neighborhoods.