Billion-Dollar Baby

James Jarrell, president of Chicago's Old Republic Credit Life Insurance Co., likes to call himself the Woolworth of the insurance business. Says Jarrell, with a note of pride: "We're in the five-and ten-cent insurance business--and we like it that way." He well might. Like Woolworth's, Jarrell has built a multimillion-dollar business by scooping up the small insurance premiums in a comparatively new insurance field that many insurance companies have hardly bothered with. The field: insurance on installment buying and small-bank loans. By concentrating on credit insurance, Jarrell boosted the company up from a prewar nonentity to twelfth place among U.S. insurance firms in the amount of new premiums paid in. From $139 million in 1946, Old Republic pushed its insurance underwriting to a whopping $650 million in 1951.

This week Jarrell gave the company another hearty boost. Old Republic made a deal with Hess Bros, of Allentown, Pa. .to offer policies to its customers on all installment buying, among the first such plans in department-store history. The cost: $1 to $3.20 a year for every $100 of installment credit insured. If the insured dies or is injured so he can't pay, Old Republic will. It also plans to start selling similar installment credit-buying policies in stores throughout the U.S.

One-Woman Company. Jarrell, 49, an old hand in the insurance business, thought credit policies were a good thing even in the '30s, when there was comparatively little credit buying, and the company had a hard time keeping afloat. When World War II came and installment buying started drying up, he had an even harder time. Jarrell and his staff went into the service and left the company in the hands of Carmine McNeill, secretary-treasurer and only employee. At war's end, Jarrell gathered around him a hustling staff of young ex-servicemen to cash in on the booming credit business: Arthur Cade, Jarrell's right-hand man, is 32; two other vice presidents are 29.

To get their finger in the credit pie, Jarrell sold hundreds of banks and finance houses on the idea of offering an Old Republic policy every time they made a loan. Old Republic went after loans of $1,000 and less, while other credit houses and companies preferred to stick to bigger loans. To cover every situation, Jarrell offered two types of credit life insurance. Under the first plan ($1 a year for every $100 borrowed), the balance of the loan still outstanding at death is paid off; under the second ($2 a year per $100), the loan balance is paid off and the family reimbursed for the amount of the loan already paid.

Trump Card. Old Republic's trump card was its offer to the financial houses themselves of a straight 40% commission for every policy written. It waived such time consumers as physical examinations, abandoned the usual practice of a policy scale that slid up with the age of the insured. As a result, Old Republic suddenly found itself swamped with business, signed up by credit people in some 4,100 banks and financial houses.

Old Republic expanded into credit accident and health insurance (if the insured is totally disabled, Old Republic pays his installments), is now getting into the home-mortgage insurance field.

This year, with business already up 63.2% over last year's, Jarrell expects to write a billion dollars worth of insurance, hopes to make a profit on the $20 million in premiums. And the market has hardly been tapped. With U.S. installment credit up to $13.8 billion a year, only a small percentage is insured.

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