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The Once and Future C&F - Building an Empire
F rederick Crum and John Forster might have been prototypical “boring” insurance guys, but boring is in the eye of the beholder. Three years after the Financial Panic of 1893 — in the middle of an economic depression — they saw their opportunity and went for it. To do anything entrepreneurial during a depression would have taken a fair measure of vision — and confidence. The opportunity sprang from New York’s protectionist regulations that required insurance companies to have physical operations in the state. This rule made sense from the customer’s perspective: if they had a claim or an issue with their insurance company, it would have made them feel more secure knowing that they could show up in the insurance company office to state their case (the ability to communicate with people in other states or countries would have been limited). At the same time, hometown companies were happy to limit the field of competition to locals. Crum and Forster recognized that there was an unmet demand, and that established insurance companies outside New York wanted to get in on the action — while partnering with people who knew what they were doing. Crum, Forster and Ackerman scraped together $501 ($19,000 today) in working capital and launched a partnership: Crum & Forster, “an agency with the purpose of managing the affairs of insurance companies in New York.” They opened for business at 95 William Street with a staff of 10 people. From the beginning, John Forster was C&F’s guiding spirit. He had arrived in New York City as a penniless Scottish immigrant, and at age 17 got a job as an office boy at Guardian Fire Insurance Company. Five years later, he took a position as clerk at North River, where he soon moved into underwriting. Then, as now, the insurance business promoted social mobility for someone like Forster — with an active mind and a commercial attitude, he quickly moved up the underwriting ranks.
Portrait of John Forster.
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