Integration Without Decentralization: The Financial Geography of U.S. Life Insurance, 1880–1940

This paper studies the transformation of American life insurance, the largest contractual savings institution in the United States before Social Security. As the market for insurance became national, did control over the savings it collected disperse with it? Using a newly digitized annual firm-by-state panel of premiums and losses covering nearly every U.S. life insurer from 1888 to 1940, I distinguish the geography of collection from the geography of control: where premiums were paid, and where the firms receiving them were domiciled. The industry was remade over these six decades. Real premium income rose more than twentyfold, the number of active insurers grew sixfold, incorporation shifted decisively from the Northeast toward the Midwest and South, and within-state concentration fell by nearly half. Control was rearranged, not dispersed. Chartering domestic insurers raised local retention almost entirely at the extensive margin. Across regions, this closed a large gap, as the Northeast retained nearly eleven times as much of its premium as the South in the 1890s and only twice as much by the 1930s, with nine-tenths of the convergence coming from Southern states acquiring domestic sectors where they had none. The national total held: firms domiciled where premium was raised collected just under a quarter of it in the 1890s and just over a fifth in the 1930s, even as household participation converged steadily across states. Legal permission to operate nationally sufficed to integrate the market in which insurance was sold, but not to disperse control over the investable cash it collected.