If the 1960s were a tumultuous decade in the US, the 1970s were simply a continuation of the chaos. With the protests against the war in Vietnam, the continued push for the Equal Rights Amendment, the fervent backlash to that legislation, and the resignation of a President under the threat of impeachment, the decade was full of controversy.
In 1972, Congress amended Title VII of the Civil Rights Act of 1964 to allow the EEOC (Equal Employment Opportunity Commission) to go directly to court to enforce the civil rights legislation. This resulted in significant litigation and settlements with companies reaching hundreds of millions of dollars. Many companies worked hard to comply, but sometimes the discrimination was so ingrained in a company’s culture, it was not easy to fix.
This increased litigation led to significant push-back on the EEOC and the aims of the agency. The criticism came from many directions. On one hand, the complaints coming in from employees who were reporting discrimination were so great in number, a backlog of 130,000 had amassed by 1977. This meant that most employees never saw their complaints addressed. On the other, corporations certainly did not want to face settlements or judgments that would cost them significant amounts of money.
In one instance that caused significant disturbance in the press, John Hancock Mutual Life Insurance Co. made what the Wall Street Journal referred to as a “surprise move” in 1978, and refused a request from the EEOC for personnel recorders for an examination of compliance with the anti-discrimination legislation. A government official is quoted as saying, “John Hancock…fears what the records will reveal. Historically, insurance has been a white male profession at the managerial level, a white female profession at the clerk level.” Meanwhile, John Hancock maintained that the government was overstepping it’s authority, and had not followed its own rules in making the request. Additionally, an official from the company stated the dispute was just another instance of “additional, continuing, increasingly oppressive…government intrusion that is counterproductive” (Wall Street Journal, 17 Feb 1978).
If women and minorities fought at the highest levels (legislation, etc) to reach equality during the 1960s, it was the 1970s when they began to insist and truly fight for those rights on the ground.
INSURANCE DURING THE 1970S
The growing inflation during the 1970s was a significant issue for the life insurance industry, now comprised of over 1,700 firms. Rising from 4% in 1971 to over 13% by 1980, policy owners saw the value of their insurance eroding as the cost of living grew. Insurance companies and their agents had to find new and innovative ways to sell their products. Because of the rising interest rates, loan and surrender activity grew significantly. Policy owners found that they could withdraw their money and reinvest it elsewhere for greater returns. Tax laws were undergoing significant changes, and insurance company investment strategies had to be restructured to meet this new economic environment.
In the middle of the decade, the amount of life insurance in force had reached over the $2 trillion mark. This continued to climb as the face amounts of policies increased, largely due to inflation. By the end of the decade, it had climbed to over $3 trillion. By 1974 and through the end of the decade, it was estimated that over 90% of all husband-wife families carried some amount of life insurance. Average amounts of coverage for this group were $25,200 per family, where the family had a mean disposable income of $11,200. The number of policies in force reached a plateau in the middle of the decade, climbing only slightly by the end of the decade. This slow-down in growth of policy numbers foreshadowed a decline in the number of policies in force in the 1980s.
The life insurance industry now found itself in considerable competition for household savings, given the higher yields investors could reap in alternative investments. Whole life insurance was no longer the attractive investment it had been for the last many decades. It is precisely this environment that gave birth to a new type of policy, the Universal Life Insurance policy. It was also this environment that gave fuel to the debate over whether an individual should buy an “ordinary life” (or whole life) policy or a “term life” policy and invest the difference.
The number of insurance agents during the decade was estimated at 135,000 at the beginning of the decade, growing by almost 100,000 by the end of the decade. The retention rates for these agents were, however, dangerously low. One study found that two year retention rates were at 39%, dipping to a very low 13% by year five of the agent-company relationship. Many reasons were given for this very low rate, including a lack of training offered to new recruits, a lack of continuing education for those already hired, and the unstable income of agents when they first began their careers.
New types of employment opportunities began to develop in the industry. With advances in technology, companies were now looking for computer operators, programmers, and system analysts instead of the file clerks and assemblers of the past. Overwhelmingly, these new positions were filled by men while the clerical and administrative work was nearly 100% handled by women. Overall, there were approximately 1.5 million insurance company employees nationwide.
WOMEN IN LIFE INSURANCE DURING THE 1970S
In the 1970s, women were graduating from college and joining the workforce in ever-increasing numbers. Because of the limited number of possible occupations for women, this led to a significant issue. A Labor Department report from 1970 cautioned that if women did not expand the range of careers for which they prepared, strong competition would develop in the female labor market. The same report spoke to a coming shortage of chemists, dentists and physicians, careers typically filled by men.
By 1973, more than 19.8 million married women were a part of the workforce, and from 1961 to 1973, there was an 86% increase in the number of married women who had both children and a job. In 1976, there were nearly 35 million women in the workforce, and 60% of them were married.
At the same time, businesses were beginning to understand the importance of a diverse workforce. In one article in The Baltimore Sun, the CEO of a mid-west mutual fund company was quoted as saying “It makes good business sense to bring interested and motivated women into the financial services industry. After all, our products such as life insurance and mutual funds represent security to millions of Americans. Who knows more about security than a woman?”
Companies that were not as successful in understanding the need to employ minorities faced major lawsuits. A landmark settlement in 1973 with AT&T called for an immediate payment of $15 million in back pay to women and minority employees, and an additional $23 million budgeted for future wages and promotions. Overnight, recruitment for women and minorities went up dramatically across all industries. A year later, however, women were still not making it to the executive suite, in most cases seeing their careers stall out at the middle management level. In 1974, there were 268 seats on the boards of directors for the largest insurance companies. Of those, not a single one was filled by a woman. In 1976, 97% of the individuals earning a salary over $15,000 were white males. In 1978, the EEOC settled a sex and race discrimination suit against Farmers Insurance Group for $1.5 million. One of the issues holding women back from the executive suite: in 1974, only 5.5% of all graduate and doctoral business students were women.
In 1970, the Institute of Life Insurance put out a publication entitled, “Your Financial Worksheet, a Guide for Women Returning to the Job,” with the purpose of helping women determine whether they could afford to work. The guide suggested a woman take into account taxes, child care, lunches, additional wardrobe, grooming, transportation, among other things, before she decides to return to work. While certainly meant to be helpful, a contemporary perspective shows this to be counter to efforts toward equality for women, encouraging them to stay home.
In decades past, the life insurance industry seemed to stay out of the social and political drama of the times. In the 1970s, this changed. The Equal Rights Amendment affected the industry directly and the industry was forced to react. In 1971, the largest companies operating in New York made a joint announcement that they were committed to at a minimum ‘doubling the number of minority group members and women in technical, sales, professional and executive jobs in two years.’
Some companies reported having already begun addressing the inequality of minorities in hiring and promotion activities. Equitable claimed that in 1971, 40% of new hires came from minority groups and of those, 13% were in executive training programs. Equitable found particular value in hiring black women, and worked to recruit and promote them. Metropolitan Life reported efforts to visit black college campuses in order to recruit minorities to that company. In 1977, they launched a major campaign to recruit minorities, especially women, into their sales force.
Regarding the purchase of life insurance, an interesting article in the New York Times reported that while young business men were typically receiving a call from an insurance salesman once every month, young business women, whether married or single, were never approached. It is not surprising then that in 1972 women carried on average $9,700 in insurance while men carried an average of $20,000 in insurance. The article makes the following statement: “…It gives the insurance man a new approach – selling insurance to the wife for her own benefit,” as if it were a new and novel concept. Another article from 1974 states, “…Very little attempt is made to sell insurance to women. The industry admits that agents (who are predominantly male) often do not take women seriously about insurance and will make their presentations only when the husband is at home.”
By 1978, the situation may have been changing. Insurance companies seemed to be awakening to “The Female Market.” Single women were now reporting more calls from agents, and some agents were beginning to understand the value of selling to working married women. Awareness of the fact that it would take more than a new marketing campaign or new product was growing. It would, however, take a major attitude shift to reach the women’s market.
In 1978, Monumental Life Insurance Company released a kit to help agents sell to the female market. Among the helpful hints the company urged agents, “If [the prospect] is single, don’t imply she will not marry…Expect many questions – Generally a woman will ask more questions than a man since she has had less opportunity to discuss life insurance.” These comments certainly seem funny from today’s perspective.
Throughout the decade, however, the amount of insurance carried by women was still significantly below that of men. In 1976, the amount of insurance carried by single women had increased to $28,400, but single men had also increased the amount of insurance they carried, up to an average of $31,000. At the beginning of that year, women owned $325 billion of life insurance, a new record, and a 150% increase from a decade earlier.
In addition, an old debate continued. Should a married woman carry insurance? In a column of the New York Times, Personal Finance, the reporter shared arguments from both sides, two years apart. In 1971, she discussed the need for “wife insurance,” arguing that the value of a wife had increased to a point where it should be insured.
In 1973, she shared that in many families, the money that would be spent on insurance was instead being spent on training and educating the wife for a career. Other reporters throughout the decade shared other opinions on the difficulty in the determination of whether to insure a wife. One life insurance agent explained, “It is fine for a woman to have full coverage, but, generally, if a working woman dies, her husband can get along okay as long as he can work…If he needs a loan, it’s easier for him to get one than it is for a woman.”
In 1975, due to the increased attention on sales to women, insurance companies began to examine the life expectancy of insured women. At this point many of them decided to increase the set-back from men’s policies to 4 or 5 years, from 3 years as they had done in the past. This meant premiums became even lower for women. By 1978, separate mortality tables were being developed for women.
The data indicates that more women were purchasing more term insurance than ever before; over 4.3 million women took out term policies in 1972, a 20% increase from a decade earlier.
WOMEN AS LIFE INSURANCE AGENTS IN THE 1970S
The number of women selling life insurance in the 1970s had not shown marked increases from decades past. In 1977, there were approximately 4,000 women selling life insurance out of a total of 135,000 agents. The women who did choose the profession, however, seemed to do well.
In 1975, the “Top Salesman” for Prudential Life Insurance company was a woman, Mrs. Estelle Holzer. That year, she sold $2.4 million of life insurance and garnered the prizes that came along with the award. In an amusing article in the Los Angeles Time, a company official explained that the award consisted of a silver trophy in the shape of a man carrying a briefcase, a men’s suit with three tie tacks and a pair of cufflinks, among other ‘male-oriented’ items. Clearly, they were not expecting a woman to win. Mrs. Holzer was quoted as saying:
Men, both co-workers and clients, don’t think we women are in this seriously…Men assume that because you are not the breadwinner in your family, you are working because you have nothing better to do or because you’d simply like a little extra spending money. Therefore, a woman has to work much harder to prove her worth and ability.
In 1975, only three women in Maryland held the CLU (Chartered Life Underwriter) designation. By 1977 nationwide approximately 770 women had earned the CLU, with approximately 125 new women qualifying each year. In 1972, 490 women qualified for the Women Leadership Round Table ($350,000 in sales or higher), 38 of whom qualified for the Million Dollar Round Table. In 1976, these numbers had jumped to 985 for the Women Leadership Round Table and 78 who qualified for the Million Dollar Round Table.
A New York Times article from 1975 (Aug 24, pg 78), reminiscent of similar articles from decades past opens:
Steady, men. That friendly woman’s voice on the telephone may not be the life insurance agent’s secretary. It may well be the life insurance agent herself.
Slowly – and activists in the field contend, far too slowly – life insurance companies are awakening to the marketing potential of women agents.
A similar argument for women entering the field was presented several times throughout the decade. In 1978, an article in the Chicago Tribune read:
The advantages of a career in insurance sales for women is that it lacks discrimination in both earning potential and public acceptance…In insurance sales, a woman can enjoy unlimited earning potential – agents are paid on the basis of results, not seniority or sex.
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