Early interactions between the life insurance and computer industries: the Prudential's Edmund C. Berkeley

Abstract

This paper studies how a representative of one commercial user industry, life insurance, interacted with key players in the newly forming computer industry after World War II but before any computers were sold for commercial purposes. In particular, it shows how Prudential's early computer expert and proselytizer, Edmund Callis Berkeley, viewed computer technology and its potential uses in life insurance, as well as the ways in which he influenced its development. Immediately after the war, Berkeley set out to educate his superiors at Prudential and the life insurance industry as a whole about the potential uses of computers for insurance; at the same time, he communicated that industry's needs, especially in the areas of rapid input-output and verification, to potential computer vendors. His internal efforts culminated in the contract Prudential signed for a Univac computer. Although the contract was ultimately broken, Berkeley's efforts appear to have influenced J. Presper Eckert, Jr., and John Mauchly in their development of the technology. Berkeley's activities in the 1940s reveal that interaction between vendors and representatives of potential commercial users was earlier and more intense than historical accounts of computing generally recognize and that users may exert a powerful influence on the development of technology.

Audience Structure and the Failure of Institutional Entrepreneurship

“…We collected the discourse regarding office technology in general and specifically regarding the computer from the proceedings of these three associations. We also used the Edmund C. Berkeley papers at the Charles Babbage Institute of the University of Minnesota to document Berkeley's early interactions with the computer industry on behalf of Prudential Life Insurance Company (Yates 1997). These papers identify different groups with whom Berkeley interacted, including computer vendors, academics, and other technical professions.…”

The Application of Computers in the Business Sector:

“…As early as in the 1950s, computers were utilized for commercial pu rposes in the insurance industry, as Franklin Life Insurance and Pacific Mutual Life Insurance installed UNIVAC I in 1954. Even earlier, the Metropolitan Life installed UNIVAC I in 1953 [4]. These insurance companies then offer great samples for this article to look into how early computers were used in the insurance industry.…”

“…At Metropolitan Insurance, the motivation to deploy computers in its business indeed had little to do with the computer technology itself in the first place. In fact, at the time, Metropolitan insurance was suffering from severe labor shortage [4]. Being short-staffed, Metropolitan Insurance was interested in any kind of technology that could reduce its need for clerical labor.…”

“…This not only solved the problem of labor shortage at Metropolitan Insurance, but also saved the company a large amount of cost. At the time, Metropolitan Insurance used to rent IBM punched card tabulating equipment [4]. When computers were utilized to handle the actuarial applications, there was no need to rent such equipment from IBM.…”

Between Novelty and Fashion: Risk Management and the Adoption of Computers in Retail Banking

“…Indeed, the glamour and novelty of applications of computer and communications technologies for a while overshadowed research on how organizational processes, procedures and routines changed (or not) following the adoption of mechanical, electromechanical and digital machinery (Cortada, 2011). Information is the fundamental component of the modern corporation (Yates, 1989(Yates, , 1997(Yates, , 2005). Yet focusing on innovations associated with information technology will help to articulate an overview of the evolution of both commercial banking and computing as well as the history of their industrial organization.…”