An article appeared in the Magazine Section of the Richmond Times-Dispatch on October 9th, 1949 and talked about "Old Mutual's" unique business model. The same philosophy of careful risk assessment is working well for us today, but other changes have been made in how the "Society" as we call ourselves today, conducts business.
The comments in italics below point out some of the changes that exist today.
Caution Is the Best Policy for "Old Mutual"
By John Wessels
The Mutual Assurance Society of Virginia, which carried policies on Mt. Vernon and Monticello at the beginning of the nineteenth century, is the South's oldest fire insurance company and probably its most cautious.
The "Old Mutual" began life in 1794 as "the Mutual Assurance Society Against Fire on Buildings of the State of Virginia." Policyholder No. 72 was John Marshall, the famous chief justice, who was the first general counsel for the company.
In 1796, Justice Marshall's home and outbuildings on what is now Marshall Street, were insured by the company for $5,900. The policy has been in continuous effect ever since, and there has never been a claim against it. Today, the historic brick building, less the vanished outbuildings, is considered by the "Old Mutual" to be a good $4,800 risk
We no longer insure this house as it has become a public building, and we only cover residential
properties today.
Thomas Jefferson signed an application for fire insurance with the "old Mutual" in 1800, protecting Monticello to the extent of $6,300. Five years later, the company insured the entire estate of Mt. Vernon against fire for a total of $25,720. Both policies were discontinued in 1820 when the company's country branch went out of existence.
"Old Mutual" surveyors (we call them inspectors today), then and now, conduct meticulous inspections of property to be insured. Dwellings must be constructed mostly of brick or stone (the rest of the paragraph is damaged).
This may be the area of greatest change. Improvements in building materials, access to public
water, and better fire suppression equipment have meant we can and do insure homes constructed of many types of materials. Our requirements focus more on liability, damage risk - such as storm surge, falling tree limbs, etc. - and home maintenance today.
Reports of these inspections, complete with sketches, have been a gold mine of information to historians, who pored over them until the company had microfilms made and placed in the State Library. Architects reconstructing Colonial Williamsburg copied dimensions of building after building from these records.
As you can imagine, after 227 years in business, we have thousands of documents we are still
cataloging. This article is one we found in a box full of goodies from around WWII.
The "Old Mutual" is very wary indeed on commercial property. A maximum of $5,000 is imposed for the protection of mercantile establishments which will pass inspection, and the company will insure only a limited number of commercial buildings in a block.
We no longer insure commercial properties at all.
The block itself must be properly located. The Mutual Building, which the company erected in 1904, is not considered a good risk by the "Old Mutual" because of its location in a highly congested area.
The company still has some policies on downtown buildings, harkening back to the days when East Main Street was the center of town, but the owners could not get a new policy today.
Not that the Mutual Building and all of the others are poor fire risks. They all have top-bracket ratings with fire underwriters. The "Old Mutual" doesn't have to take the risks in a congested area, and so it just doesn't write the policies.
Such conservatism has paid off, according to W. Meade Addison, principal agent. Today, it would take an atomic bombardment to force an extra "assessment" on policyholders. Business is pretty well restricted to the cream of residential property in principal Virginia cities, and there are plenty of applicants, despite the fact that the "Old Mutual" does not advertise.
"Cream of the crop" in the mid 20th century means the same to us today. Homes that fit this
category meet our risk assessment criteria, are well-maintained, and their owners are responsible caretakers. We've also expanded our coverage to smaller towns and cities where municipal water and established fire departments are available, and we offer coverage to renters and condo-owners as well.
The answer is the extremely low rates made possible by the gold-plated nature of the company's risk, plus periodic inspections to provide maximum protections. A typical "Old Mutual" philanthropy was the gift of a fire engine to the city of Richmond.
Financially, the company was well fixed enough to send each policyholder a receipt marked "paid" for all insurance in the year 1906 and again in 1945 to celebrate its fiftieth anniversary.
A staff of just seven runs the business from Mutual Building offices, including Addison, G. Moffett King, as secretary, and G. Moffett King Jr., as assistant secretary. The board of directors reads like a financial Who's Who in Richmond.
We are now a staff of 35 full-time employees with one intern. This year we'll be bringing on a staffmember to help with HR as well as another team member in the Claims Department. A sure sign we remain a "gold -plated" company that takes great care with its members.