London Life is a Canadian provider of insurance services located in Downtown London, Ontario. A fully-owned subsidiary of The Great-West Life Assurance Company since 1997, it began life as a provider specifically of life insurance in 1874. It has been a constant on the London, Ontario business scene since its inception and is today a large provider of employment and corporate sponsorships in the London region. The story of London Life is a parallel for the city of London, in terms of history; the corporation itself is a symbol of the growth and ingenuity of the London spirit, but their headquarters, first built in 1927, is a perfect example of contemporary architecture and an impressive presence along the edge of Victoria Park. An anchor of the community, London Life is a modern-day insurance powerhouse.
London Life: A Canadian Insurance Dynamo
London Life is now, in the 21st Century, a subsidiary of Great-West Life, which is in itself part of an overarching corporate group called Power Financial Corporation. The company is located on Dufferin Street in Downtown London, directly across the street from gorgeous Victoria Park. As of 2016, London Life had more than 13 million Canadian customers, servicing approximately 36% of the Canadian population. This resulted in London Life being responsible for $9.1 billion in insurance payouts, broken down into a number of categories. Life insurance, naturally, was a large part of that payout structure. In 2016 London Life paid out $2 billion just in life insurance to 44,000 bereaved families.
London Life is now about more than just life insurance, however. Their disability insurance division dealt with insurance income for 76,000 disabled individuals. Medical and dental insurance for 56 million claims resulted in payouts of over $4.6 billion, and retired Canadians received annuity payments of over $800 million. That’s just the money going out. The insurance industry is big business, one of the biggest there is, and today London Life is a major part of the Canadian iteration of that industry. Today it’s a business worth billions, but the story of London Life has much smaller, more humble beginnings.
London Life: The Beginning
London Life was founded in 1874 in London, Ontario. Its birth is very much the product of its times. The beginning of London lay in land grants to pioneers coming over from Great Britain; the early half of the 19th Century found a steady, consistent growth in the number of subsistence farms in and around the London region. Those farms were the first industry of pioneer-era London, along with small fisheries along the shores of the Great Lakes. Everything from there unfolds from that simple starting position. Farms eventually begat markets to sell those goods, and the demand for other goods led to more specialized industries growing throughout the region. The City of London was incorporated on January 1st, 1855 and the future seemed like a wide open vista of growth and industrial progress. Indeed, the use of the railway engine billowing smoke on the city’s coat of arms seemed to indicate that the city’s founders considered their future economic strength to be well-founded.
Ironically, it was the collapse of railroad securities in the United States and the failure of the Ohio Life Insurance and Trust Company that led to the Panic of 1857 and the resultant global economic depression. The London economy was ravaged by this economic downturn, and it was only the advent of the Civil War in the United States that saved local businesses. The Civil War was originally thought by Union stakeholders to be over in short order; when it began to grow long, the need for a steady supply of grain increased for the United States Army. London provided that steady supply of grain, becoming quite prosperous as a result. Grain sales, and the resulting services that went along with that trade, accounted for much of London’s growth over the next twenty years, and that growth was considerable. By the time London Life was formed, ten years after the peak of the Civil War, there was a solidly large economic base. The first locally owned trust company, Huron & Erie, was formed in 1864; by 1874, London was a blossoming community of 20,000 with a robust system of banks, insurance agencies, and three daily newspapers. Ten years later, under the leadership of John G. Richter, London Life began targeting their life insurance programs toward the middle class that was growing exponentially as the result of industrialism.
Security For The Middle Class
This reorientation of the business toward the middle class paid off extremely well for London Life, and there’s a lot of historical evidence as to why. A 2001 study by Livio Di Matteo and J.C. Herbert Emery looked into the demand for life insurance in the late 19th Century with a sample pulled directly from the population of Ontario. They pegged the growth in the life insurance industry to a particular kind of growth in Ontario demographics. The growth of the Ontario economy from being a subsistence pioneer economy to being a more robust, industrialized economy occasioned the growth in a number of key metrics.
One of the clearest indications of the economic change was the growth in savings; as farmers and the businesses who relied on them grew more prosperous, they were able to put more of their earnings away into the savings and loan companies. Between the 1870s, when London Life was founded, and 1910 aggregate savings grew from being approximately 8.7% of GDP to being 15.7% of GDP. This bourgeoning growth in savings led to a similar growth in the financial industry as a whole. In 1870, financial assets in the Canadian industry were worth $119 million (in 1900 dollars). By 1910, that same industry was worth $1.5 billion, a large swath of which was driven by life insurance products. The life insurance industry on its own was worth $171 million of that total. Who was the primary consumer of such insurance products at that time, though? Then, as now, the answer is fairly clear-cut. It wasn’t the wealthy who were purchasing life insurance products. After all, the wealthy had enough savings put away to weather whatever storms could come their way. Even if the unthinkable occurred, the wealthy had sufficient savings to take care of funeral costs and provide for their families afterwards. It was instead those still in the earlier part of their careers, when savings had not yet been sufficiently accumulated, that were the biggest consumers of life insurance. At the same time, Ontario farmers near the end of the 19th Century were also less likely to be purchasers of life insurance services. It’s a little ironic, considering where the initial spurt of economic growth in the London region came from. Previous studies cited by Di Matteo and Emery note that farmers tended to buy less life insurance (insurance products in general, in fact) because of the wealth they had stored in the form of land ownership, and of the capital good ownership inherent in farming. In this sense, it was as though they had the savings accumulation that wealthier non-consumers of life insurance enjoyed.
So, people with large accumulations of savings or land were not likely to also be purchasers of life insurance, because the benefits did not outweigh the costs. Instead, it was those whose economic life was less settled and more precarious who bought into the growing life insurance industry. In addition, life insurance purchases were more often done in households where economic survival was based around one person and their income. In late 19th Century Ontario, this demographic portrait of households that purchased life insurance meant that customers were more often found in the cities than in more rural areas.
Thus, the customers that London Life sought out under the auspices of John Richter are much the same people who buy life insurance today: middle class families, single income households, and others whose savings are not sufficient to allow them to fall back on them in times of crisis. London Life’s targeting of the key demographic drivers of life insurance growth allowed them to become a major player in the Canadian insurance industry.
A Company You Can Trust
In addition to getting in on the ground floor of growth in the insurance industry, London Life also proved that they were a cut above when it came to honesty and integrity. Monopolistic practices and price-fixing scandals at the turn of the 20th Century led to anti-trust investigations of the Canadian insurance industry, culminating in a Royal Commission on insurance practices. A number of firms exhibiting bad behaviour came to light as a result of the Royal Commission, and a number of recommendations were formulated and implemented in order to reform the industry. London Life was not one of these firms; in fact, London Life was held up by the Royal Commission as a model example of how to run an insurance company. The additional credibility that this finding gave London Life allowed them to continue their period of strong growth. In 1906, the year of the Royal Commission, there were 22 people working as staff in the head office of London Life. Twenty years later there were 250, capping two decades of extremely good growth for London Life’s business. Ten years after, in 1937, London Life not only managed to avoid the worst of the Great Depression but even expanded to other offices in other Canadian cities. That expansion had ramifications at home in London as well. London Life’s original headquarters was a rental; as the business grew to become something of a powerhouse in the insurance industry it became obvious that more permanent solutions were necessary in order to reflect the prestige and credibility that the firm had developed. In 1927 London Life opened their own headquarters on Dufferin Street, a building that remains a London landmark today. It’s original conception included a bowling alley, for employee entertainment, and a full-size auditorium to host company meetings and holiday parties. While it has been expanded on three times since, the original 1927 building is an imposing bit of architecture and definitely something to take a look at when exploring downtown London.
Success and growth continued after the Second World War, as well. By the time the first extension was built in 1948, there were 847 employees working at the London Life head office. This grew to 1,083 when the next rounds of extension to the building were completed in 1953. Investments in future technology were also a hallmark of London Life’s business. In 1959 they were one of the first companies to adopt the use of a computer into their practices, and in 1965 they swapped the original Univac system out for an IBM System/360, the same computer system that would, four years later, guide Apollo 11 to the moon.
London Life is best known especially among Baby Boomers for their “Freedom 55” advertisement campaign, first launched in 1984. Freedom 55 was a realignment of how to sell life insurance. It was seen too often as a rather morbid industry, with its focus on dealing with the aftermath of death or catastrophic injury. London Life decided to rework this image and focus on “life insurance for the living.” The idea was to use life insurance as a tool to realize the dream of retiring at 55; while the foibles of life often prevented that dream from being realized for many, it positioned life insurance as an integral part of any well-planned retirement portfolio, and continued London Life’s period of growth through the 1980s and 1990s. London Life’s merger with The Great-West Life Assurance Company in 1997 plugged the company into a greatly expanded global market for life insurance products. It is today a powerhouse player in a large global insurance conglomerate, providing a range of insurance services to millions across Canada and the world. It has, since the late 19th Century, provided a base of good jobs and steady business for the city of London, Ontario. As a business or as a landmark building, London Life is as much an integral part of London as Victoria Park, or the Thames River.