Eliphalet Adams Bulkeley

Born: Colchester; June 20, 1803
Died: Hartford; February 13, 1872

Entry by James P. Walsh

Connecticut became known as the "insurance state" not because it invented the business of insurance, but because so many of Connecticut's nineteenth-century insurance companies proved their reliability in a field often marred by fraud and failure. Eliphalet Bulkeley is a good example of the conscientious businessman who gave the state its reputation for honest dealing.

Bulkeley was born to a long-established and wealthy family. He went to Yale, graduating in 1824, and shortly after moved to Alabama in search of business opportunities. He soon returned to Connecticut and began to practice law in East Haddam. One of his clients was the Aetna Insurance Company which at that time insured only against fires. In 1850 Bulkeley formed a subsidiary within Aetna, called the Annuity Fund, for the purpose of issuing life insurance policies. Three years later the subsidiary became the Aetna Life Insurance Company.

Bulkeley made one significant change in the way Aetna was organized. Traditionally, those who purchased life insurance policies became part owners of the company. Bulkeley made the Aetna a regular stock company, owned by those who invested and managed by a board of directors responsible to the stockholders. Policyholders were customers, not owners. Bulkeley felt that the Aetna could be better managed in this way, and he was right. The new company rode out the Panic of 1857, even though older companies went bankrupt.

The Civil War introduced a period of great expansion. In 1861 Aetna sold 589 life insurance policies; in 1863 it sold 1,722. By that time, life insurance had become a common middle-class purchase, and in 1867 Aetna wrote 15,251 policies. At that point, Bulkeley felt that Aetna was expanding too rapidly and took measures to put it on a sounder financial basis. In the competition to sell policies, insurance companies usually gave very generous credit terms to their customers. The danger, of course, was that a company's reserves were never built up enough to cover extraordinary losses. Bulkeley realized this problem and began to restrict the amount of credit Aetna extended to its policyholders. In the short run, the Aetna suffered a loss of business, but the Company grew financially stronger.

Bulkeley's foresight was soon vindicated. In October 1871 most of Chicago burned to the ground. The victims of the fire soon began to make claims on their insurance policies which covered about $92 million worth of property. Most companies could not pay. In Connecticut eleven different companies had written policies covering life and property in Chicago; of them, only four survived. The Aetna lost about half of its capital in order to pay claims, but it paid every claim in full and survived the severest challenge to its existence.

It was typical of Bulkeley's dedication to his business that when he died he was, although nearly blind, at his desk in his office.

For Further Reading

There is no full-length biography of Bulkeley. He received some attention in Richard Hooker, Aetna Life Insurance Company: Its First Hundred Years (Hartford, 1956). See also the entry in the Encyclopedia of Connecticut Biography (Boston, 1917), IV, 172-173.

* Entry under revision.