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The Once and Future C&F - Captain Whiley’s Enterprise
River Insurance Company (Noortrivier was the early Dutch name for the Hudson). This was unusual for the time in that most insurance companies were capitalized with promissory notes instead of hard cash. The North River Insurance Company opened for business — at 192 Greenwich — on March 6, 1822. Captain Whiley became the first president at an annual salary of $1,200 (about $32,000 today). Back then, Peter Warner — who would go on to run North River years later — earned $800 ($21,000 today) a year as an office boy and received the added benefit of rent-free living in the room above the business, in return for sweeping the office every night. It required vision and courage to launch an intrinsically hazardous business, but Captain Whiley also had to attend to the practical realities of running a successful insurance company. Judging from his notes in the original policy registers and board meeting minutes, Whiley was deep in the details of his business — which is a good thing because 1822 might have been a simpler time in many ways, but not for a fire insurance business. By the modern standard, the properties in New York City back then were risky business. Frame buildings, in close quarters — with maybe a few corners cut during construction — were built to meet a newfound impulse for “taller and taller.” While gas was beginning to be used for illumination, most heat and light still involved oil or candles – and fire. Fire departments would often fight over who got to handle a particular fire. Competition between fire-fighting companies was intense and extinguishing the fire could be secondary to triumphing over a rival fire company. On occasion, the fire was allowed to rage while citizens brawled over possession of buckets. Captain Whiley took all of this in and instinctively established a set of conservative underwriting guidelines. He required a thorough inspection
of all buildings before agreeing to insure them. He would not insure any building over 80 feet — the height above which firefighting equipment could not help. This still left the issue as to how to price the business. Rates ranged from 22 cents per $100 for “buildings of brick or stone, covered with tile, slate or metal; the doors and windows of solid iron” all the way up to $1 for “buildings entirely of wood.” North River was a member of the Salamander Society (a predecessor to the New York Board of Fire Underwriters), whose goal was to get the members to adhere to published rates. That didn’t work out. Even so, Whiley kept to his conservative approach to building the business. As often happens in insurance, your model really gets tested when there is a big event — and for Whiley and North River, this underwriting test was the Great Fire of 1835. The fire occurred in the heart of the New York City business district on a night when the temperatures dropped to 18°F below zero, freezing the
Detail from an advertisement circa 1935 depicting the Great Fire of 1835. Companies referenced in the ad were U.S. Fire and The North River.
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