Abstract

http://ssrn.com/abstract=1151491
 
 

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


Sharon Ann Murphy


Providence College

June, 25 2008

Business History Review, Vol. 82, No. 1, 2008

Abstract:     
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 applicant's 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.

Keywords: life insurance, agency system, asymmetric information

JEL Classification: D81, D82, G22, N81

Accepted Paper Series


Not Available For Download

Date posted: June 27, 2008  

Suggested Citation

Murphy, Sharon Ann, Selecting Risks in an Anonymous World: The Agency System for Life Insurance in Antebellum America (June, 25 2008). Business History Review, Vol. 82, No. 1, 2008. Available at SSRN: http://ssrn.com/abstract=1151491

Contact Information

Business History Review (Contact Author)
Unaffiliated Authors
Sharon Ann Murphy
Providence College ( email )
United States
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