History of Black Americans in the Insurance Industry

This Black History Month, IFS would like to bring your attention to the Black history in the insurance world and how it has disproportionately affected the generational wealth gap of Black Americans. Black history is American history. Therefore, it is our duty to seek after the overall goal of eliminating this wealth gap, but we can’t take steps to do that until we have an awareness of it. So today we invite you to join us in learning about Black history in the insurance world. 

We begin in the late 1800’s with insurance agent, entrepreneur, and business owner, John Henry Merrick. 

Merrick was born into slavery and worked his way up from brickyards to shining shoes to the barber business, and by the turn of the century, Merrick relocated to Hayti, the famed historic Black community in Durham, North Carolina, and owned five barbershops, a haircare line called Merrick’s Dandruff Care, and several rental properties, sharing ownership with a few other Black entrepreneurs. 

In this time, insurance was unattainable for most Black Americans since nearly all insurance companies catered to whites.

Merrick is best known as one of the leading co-founders of North Carolina Mutual Life Insurance Company in Durham, the largest and one of the first Black-owned insurance companies in the United States. The founding of NC Mutual in 1898 filled a huge gap. To the extent that such services existed, they were provided through Black social clubs and fraternities, like the Royal Knights of King David, which pooled its members’ resources to cover expenses like burials. In partnership with seven other co-founders, including Dr. Aaron McDuffie Moore and his nephew C.C. Spaulding (who eventually served as NC Mutual’s president), Merrick used NC Mutual to transform insurance opportunities for Black people, and also offered policyholders a stake in the company. 

“The success of this mutual enterprise was a tremendous source of pride for African-Americans in Durham and across the country in those early days of freedom.”

North Carolina Mutual Life Insurance Company History Page

When NC Mutual was relocated to Parrish Street, it became a cornerstone of a group of Black-owned businesses. Parrish St. was soon nicknamed “Black Wall Street“, one of several Black business districts of its kind across the country.

If we fast-forward to the civil rights movement where the desegregation of insurance began in the 1960’s, we can see that Black American insurance companies have experienced a significant decline in their profitability and stature. This, in an economic sense, consists of white-controlled businesses and black consumers increasing their interaction with each other. Black insurers waged an increasingly difficult struggle to survive. The only way African American insurance companies were able to counteract this disturbing trend was to voluntarily merge into other “mega” companies. This maneuver empowered consolidated black insurers to better serve African American consumers.

However, anyone can tell that the merge of Black Americans into the insurance industry wasn’t fully successful. Today, Black Americans are severely underrepresented in the insurance industry — especially in the executive and management ranks. It’s an industry rife with unconscious bias; a lack of high-level executives who can serve as mentors and sponsors; nepotism and favoritism in hiring; and a lack of exposure to potential employees of color.

Those are the findings of The Journey of African American Insurance Professionals, a new report by Marsh and the National African American Insurance Association. It included 312 online surveys, 25 interviews, and seven focus groups.

We know this history lesson can be a little discouraging, but this is the history of how Black Americans have been treated in America. You might be asking, ‘well what can I do to fix it?’

The answer: learn! You took a fantastic step today, now keep at it. Racism, racial bias, and white supremacy will not end unless individuals take actions to achieve diversity and inclusion.

“What gets measured is what gets done. Without those measures and accountability, diversity and inclusion will not happen.”

– Margaret Redd, executive director, NAAIA

This Black History Month, we hope you join us in dedicating more time and efforts into supporting Black Americans. IFS continuously strives to dismantle systems that produce inequality in the health sector. Making sure all employees have the benefits they need to thrive is our passion and we have no plans of letting that passion die anytime soon. 

More resources: 

• A conversation with Robert Weems, the Willard W. Garvey distinguished professor of business history at Wichita State University helps us shift our attention to the wealth gap between Black and white Americans and how we can take steps to eliminate the gap. 

• Read more on how to fight racial bias in the insurance industry

Written by Tomás Carradero