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The Paul Revere Corporation Business Information, Profile, and History

18 Chestnut Street
Worcester, Massachusetts 01608-0828
U.S.A.

History of The Paul Revere Corporation

The Paul Revere Corporation ranks as North America's top provider of individual non-cancelable disability income insurance (DI), holding a market share of 18.4 percent at the end of 1993. The company, which had over a half-million individual DI policies in force in the early 1990s, is the only firm with a primary concentration on individual disability insurance, accounting for over two-thirds of total premiums and nearly three-fourths of income before income taxes in 1993. The remainder of Paul Revere's business is in annuities, individual life and group business, which are employed to complement disability products while contributing to earnings. The firm celebrates its centennial in 1995, having emerged as a publicly traded company after operating as a wholly-owned subsidiary of Textron Inc. from 1985 to 1993. Textron still held a majority (83 percent) stake in Paul Revere in 1993.

The corporation traces its history to the 1895 establishment of the Masonic Protective Association (MPA) in Worcester, Massachusetts. This fraternal accident, disability, and life insurance company was formed by James E. Farwell, Frank M. Heath, and Francis A. Harrington, who was named president. Groups like the secretive Freemasons proved vital to the insurance industry in these early years, helping to diffuse the hardships associated with loss. The MPA operated as a mutual cooperative owned by the policyholding members and was exempt from state insurance legislation due to its fraternal affiliation.

In 1909, however, mounting suspicion of such groups' business dealings spawned legislation that discouraged fraternal insurance organizations in Massachusetts. Thus, MPA reincorporated as a stock company owned by shareholders, all of whom, not coincidentally, were Freemasons. In 1918, Francis Harrington and his family won exclusive ownership of the MPA in what the company called a landmark legal case. The founder controlled the MPA for four more years, until his death, when son Charles Harrington succeeded him; the Harrington family would continue to lead the company for the next 50 years. In spite of its corporate reorganization and a 1922 name change to the more generic Massachusetts Protective Association, the MPA continued to sell policies exclusively to Masons until the formation of Paul Revere in 1930.

The MPA launched its first non-cancelable, guaranteed-renewable disability income product in 1918, and the concept of insurance companies offering disability insurance became popular in the 1920s. There were generally two types of disability protection, both of which were linked to life insurance benefits. One allowed the waiver of premiums without the cancellation of the life insurance, while the other, a more expensive plan, offered a premium waiver as well as a predetermined monthly income to disabled policyholders. The face value of the life insurance was often not reduced by such amendments and was payable in accordance with the original contract provisions at maturity. The policies usually designated a waiting period before disability benefits would be distributed, while providing for the termination of benefits if recovery from disability occurred. While many of these terms endured, contemporary disability insurance is often bound to income and/or earning power. MPA also pioneered non-medical life insurance, which did not require a physician's examination, through the creation of its Massachusetts Protective Life Assurance Company (MPLA) in 1924.

Although losses during the Great Depression and the 1935 creation of Social Security drove many companies out of the disability segment, MPA stayed with it. During this time, the company supplemented its income by offering life insurance products to the general public through a new subsidiary, The Paul Revere Life Insurance Company, which was formed in 1930. Insurance companies initially lost business during the Depression era, and insurance in force declined slightly to below $100 billion in 1933. Moreover, many insurance companies experienced decreased interest earnings and stock losses during this period. Nevertheless, premium income began to recover beginning in 1934, as life insurance emerged as a safe investment (especially in comparison to the volatile stock market), and "life insurance" became a synonym for absolute security and safety.

After World War II, Frank L. Harrington, Sr., nephew of Charles Harrington, succeeded to the leadership of the company. The new president brought sweeping change to the firm, merging MPLA with The Paul Revere Life Insurance Company and assuming the more easily recognized latter name in 1946. The company branched out into the nearly $30 billion group insurance industry that year. Group insurance covered a large number of people, usually the work force of a common employer, under a blanket policy without requiring medical examination and at a very low cost. This type of business grew rapidly in the postwar era. Paul Revere applied its investment expertise more broadly with the 1949 establishment of a brokerage organization. The company established a Canadian office in 1950 and soon became that country's largest disability insurer.

The 1960s brought new business activities, corporate consolidation, and a reorganization. The insurer established the Paul Revere Variable Annuity Company, which was awarded Massachusetts' first variable annuity charter, in 1965. This retirement benefit product differed from standard annuities in that its return fluctuated with the economy. The yield of variable annuities was linked to either the stock market or cost of living indices, and this investment vehicle grew more popular as inflation set in during the 1970s. The company established the Paul Revere Corporation in 1966 to direct a expanded program of investment activities.

The MPA was retired in 1966 after over 70 years in business through a reinsurance agreement with Paul Revere that called for the former subsidiary to assume all of the liabilities and obligations of the original company. That year, Frank L. Harrington, Jr., succeeded his father as leader of the company and directed a "reverse merger" with Avco Corporation. Avco, a nationally-recognized financial services company, was actually acquired by Paul Revere, but the new entity assumed the better-known Avco name, while Paul Revere became a subsidiary. The Harrington family leadership ended shortly thereafter, when Frank Jr. resigned and George L. Hogeman was elected to replace him as president.

Paul Revere's services grew in proportion to increasing complexity of the insurance industry and the general economy in the twentieth century. The company founded a reinsurance division in 1972 to provide supplemental coverage to other insurance companies and created the Paul Revere Protective Life Insurance Company the following year. During the decade, the company began offering disability insurance to groups, including employee groups. In 1974, career Paul Revere associate and top salesman Aubrey K. Reid, Jr., became the company's sixth president. Reid worked to loosen up the traditionally conservative, regimented corporate culture by putting everyone on a first-name basis and espousing a delegative leadership style. Just over a decade after he assumed the top role at Paul Revere, the company and its parent, Avco, were acquired by Textron Inc., an international multi-industry corporation.

Reid lead the mid-1980s implementation of a Total Quality Management (TQM) program adapted from the Japanese manufacturing industry. Paul Revere was one of the first companies in the insurance industry to embrace TQM, a trend that later swept the financial services sector. Paul Revere's adaptation of the theories, dubbed the "Quality Has Value Process," stressed efficiency and customer service in all functions. Tangible results credited by the company to its quality process included a near doubling of annual premium revenues from 1987 to 1992. This growth far outpaced the industry average of 47 percent over the same period.

Paul Revere ended its involvement in the group health insurance sector in 1992, as health care reform became an important issue in that year's presidential campaigns. However, while disability insurance was often discussed in conjunction with health and medical coverage, Paul Revere's primary business was not threatened by the health care reform proposals proffered during the Clinton administration. In fact, the administration heralded an era of unprecedented potential for Paul Revere, as over 80 million workers entered their peak earning years, when their need for disability insurance also peaked. The insurer hoped to maintain its share of the disability market and increase it through the continued introduction of innovative products and policies.

From 1970 into the mid-1990s, Paul Revere emerged as North America's premier disability insurer, and its competitors exited the segment in droves. Out of 1970's top five disability insurers, only Paul Revere remained in the segment, and, from 1988 to 1993, numerous competitors closed their individual disability lines. Paul Revere stepped in to fill the void by forming a National Accounts Program to sell its disability products through other companies. As a pioneer of such strategic alliances, Paul Revere was able to maintain its competitive edge. By 1993, around 30 companies in the United States and Canada sold Paul Revere products through their own distribution systems. By that time, National Accounts constituted over half of annual premiums and was the company's fastest-growing segment.

In 1993, an eventful year for the Paul Revere Insurance Group, Textron sold 17 percent of its insurance subsidiary in an initial public offering on the New York Stock Exchange, an infused an estimated $100 million in capital into Paul Revere. Moreover, the firm, touting its near 100-year history in its first annual report, became the first American insurer to top $100 million in new disability premium in a single year.

Principal Subsidiaries: The Paul Revere Life Insurance Co.

Related information about Paul Revere

US patriot and silversmith, born in Boston, Massachusetts, USA. He was an excellent silversmith and ardent patriot, but a mediocre military leader. A member of the Sons of Liberty, he became the primary express rider for the Boston Committee of Safety, and his famous ride to Lexington (1775) was only the best-known of the many courier services he performed. He later was court-martialled and acquitted for his leadership during the failed Penebscot Bay expedition of 1779. After the American Revolution, he continued his silversmith trade with great success. He provided materials for the USS Constitution and worked with Robert Fulton in developing copper boilers for steamboats.

:For the American musical group, see Paul Revere & the Raiders.
Paul Revere (January 1, 1735 – May 10, 1818) was an American silversmith and a patriot in the American Revolution. Because he was immortalized after his death for his role as a messenger in the battles of Lexington and Concord, Revere's name and his "midnight ride" are well-known in the United States as a patriotic symbol. In his lifetime, Revere was a prosperous and prominent Boston craftsman, who helped organize an intelligence and alarm system to keep watch on the British military. Revere later served as an officer in one of the most disastrous campaigns of the American Revolutionary War, a role for which he was later exonerated. After the war, he was early to recognize the potential for large-scale manufacturing of metal goods and is considered by some historians to be the prototype of the American industrialist.

Early years

Paul Revere was born on 1 January 1735. According to the records of the New Brick Congregational Church in Boston, he was baptized on 22 December 1735. This date is given in the "Old Style" Julian Calendar that was used in the British Empire until 1752. The date translates to 2 January 1735 in the "New Style" Gregorian Calendar.

Revere was the oldest surviving son of Apollos Rivoire, a Huguenot refugee from Guyenne who had anglicized his name to Paul Revere. Once in Boston, he apprenticed to Mr. John Coney to learn the trade of a gold- and silversmith. After Sarah's death, he married Rachel Walker (1745-1813) in 1773, and together they had five sons and three daughters.

Revere became a proficient copper engraver in the years before the war. One of his best known tells the patriot story of the Boston Massacre. He was one of the Boston grand jurors who refused to serve in 1774 because Parliament had made the justices independent of the people for their salaries; was one of the thirty North End mechanics who patrolled the streets to watch the movements of the British troops and Tories; and in December 1774 was sent to Portsmouth, New Hampshire to urge the seizure of military stores there, and induced the colonists to attack and capture Fort William and Mary —

The midnight ride

The role for which he is most remembered today was as a nighttime messenger before the battles of Lexington and Concord. His famous "Midnight Ride" occurred on the night of April 18–19, 1775, when he and William Dawes were paid by Dr. Joseph Warren to ride inland from Charlestown to warn the militias at Lexington and Concord of the approach of British army troops from Boston. Robert Newman and Captain John Pulling held the two lanterns in the Old North Church, indicating that the British soldiers were crossing the Charles River. Later, Dawes and Revere were joined by Samuel Prescott, a doctor who was just returning from a visit to Lexington. his warning was: "The regulars are out!"

He reached Lexington around noon and brought news of the British advance to Samuel Adams and John Hancock, who were spending the night at the Hancock-Clarke House. Revere, Dawes and Prescott were captured by British troops in Lincoln at a roadblock on the way to nearby Concord. In 1860, over forty years after his death, the ride became the subject of "Paul Revere's Ride", a poem by Henry Wadsworth Longfellow. As a result, historians in the 20th century sometimes considered Revere's role in American history to have been exaggerated, becoming a national myth. Other historians have since stressed his importance, however, including David Hackett Fischer in his book Paul Revere's Ride (1995), an important scholarly study of Revere's role in the opening of the Revolution. The army that assembled during the night of his famous ride would become the nucleus of the Continental Army.
Today, parts of the ride are posted with signs marked "Revere's Ride". The full ride used Main Street in Charlestown, Broadway and Main Street in Somerville, Main Street and High Street in Medford, to Arlington center, and Massachusetts Avenue the rest of the way (an old alignment through Arlington Heights, Massachusetts is called "Paul Revere Road").

War years

In 1775, Revere was sent by the Massachusetts Provincial Congress to Philadelphia to study the working of the only powder mill in the colonies, and although he was allowed only to pass through the building, obtained sufficient information to enable him to set up a powder mill at Canton.

He was commissioned a Major of infantry in the Massachusetts militia in April 1776; was promoted to the rank of Lieutenant Colonel of artillery in November; He served in an expedition to Rhode Island in 1778, and in the following year participated in the disastrous Penobscot Expedition. Additionally, he became a pioneer in the production in America of copper plating, covering the original wooden dome of the Massachusetts State House in copper in 1802, and of copper spikes for ships—most notably the USS Constitution. Alexander Hamilton's national policies regarding banks and industrialization exactly matched his dreams, and he became an ardent Federalist committed to building a robust economy and a powerful nation. His family was known to actually hide the John Singleton Copley portrait (seen at the top of the article) in later years, as it showed him working with his hands.

In 1795, as grandmaster of the Massachusetts Grand Lodge of Masons, he laid the cornerstone of the new statehouse in Boston, and in this year also helped found the Massachusetts Charitable Mechanic Association, becoming its first president.

He died in Boston on May 10, 1818, at 83, his death tolled by bells that he himself had manufactured.

Paul Revere appears on the $5,000 Series EE Savings Bond issued by the United States Government. His likeness is also alleged to appear on some labels of the popular beer Samuel Adams. A True Republican: The Life of Paul Revere U of Massachusetts Press, 1998

"Paul Revere, Artisan, Businessman and Patriot -- The Man Behind the Myth," Paul Revere Memorial Association, 1988.
Edith J. Steblecki, "Paul Revere and Freemasonry," PRMA, 1985.

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