How Black history shaped insurance history

As with most corners of American history, there are often overlooked stories of Black contributions to every part of American life, and insurance is no exception. For Black History Month, Branch is taking a look at the history of Black influence and the Black experience in the insurance industry.

Where we started

The first Black-owned insurance company in the U.S. was the African Insurance Company, which was founded in Philadelphia in 1810 and operated for only three years, but ultimately laid a foundation for later businesses.

After the Emancipation Proclamation in 1863, enslaved people were theoretically freed, but there was a long way to go. In fact, a book called “Race Traits and the Tendencies of the American Negro” was published in 1896, and was widely used to justify race-based discriminatory practices in insurance.

Shortly after in 1898, John Merrick—who was born enslaved—co-founded North Carolina Mutual Life Insurance Company, which would become the largest Black-owned insurance company in the United States. Before this point, insurance was largely unavailable to the Black community. This offering of property insurance within a mutual framework was a major contributor to the development of Black Wall Street.

Segregation and slow reform

The housing landscape became intentionally segregated in 1934 with the introduction of red lining by the Federal Housing Administration. Shortly after, insurers developed comprehensive homeowners policies to attract new suburban homeowners, but this product was largely unavailable to Black homeowners in redlined urban areas.

Meanwhile, Black communities also struggled with access to auto coverage. In World War II, typical auto materials were being used for wartime purposes, which created a shortage and by extension, an auto part price hike. In response, insurers tightened underwriting restrictions and systematically dropped Black customers. To address this crisis, the Loyal Automobile Insurance Company issued its first policy in February of 1950, aiming primarily to offer auto insurance to Black communities.

Around the same time in New York, Ernesta Procope founded her insurance agency, E.G. Bowman, out of a storefront in Brooklyn in 1953. This would go on to become the largest minority and woman-owned brokerage in America. Though the Civil Rights Act was passed in 1964, it wasn’t until a few years later that the Fair Housing Act was passed, making redlining illegal and prohibiting discriminatory practices in housing sales and financing. In this process, Procope herself advocated for the passing of legislation to create Fair Access to Insurance Requirements (FAIR) plans for New York state, which were then established in order to ensure urban, formerly redlined areas, had access to insurance. This became a model for similar plans across the country. 

In 1979, E.G. Bowman moved its business to Wall Street, making it the first Black-owned business on Wall Street and aptly dubbing Procope as the First Lady of Wall Street.

Building toward better

This history is ongoing, and ever-developing. In 1997, Jerald L. Tillman founded the National African American Insurance Association in Cincinnati, Ohio to empower Black insurance professionals and expand their representation in the industry and in leadership. As recently as 2017, several studies from ProPublica and the Consumer Federation of America suggest that the Black community tends to pay more for their home and auto coverages than white communities with similar risks. 

Branch remains committed to making insurance more accessible for everyone—which also means fair pricing and availability for Black and other minority communities. We continue to honor Black contributions—both historically and within our own organization—as a reminder of how far we’ve come and the work that still needs to be done. It’s why we maintain our B Corp Certification, to ensure we uphold high standards of social responsibility. Fairness, equality, and accessibility are key to the mission of Branch, and crucial to the future of insurance.

This blog is by no means an exhaustive history. If you’d like to continue learning with us, we recommend the works of Jarrard “Rod” Powell Sr., including Black Pioneers of the American Insurance Industry and Black Innovators of the American Insurance Industry.

Our references:

• https://evolutionofraceandinsurance.org/2000s
• https://actuary.org/article/the-pioneering-dream-of-a-black-auto-insurance-company/
• https://scalawagmagazine.org/2019/07/black-wall-street/
• https://blackpast.org/african-american-history/african-insurance-company-1810-1813/
• https://static.moaf.org/docs/Procope.pdf
• https://naaia.org/about-us/