ABSTRACT
The economic earthquake of the Depression caused a significant decline in the production and sale of cars and trucks in the United States. Consumers also cut back on the purchase of services as well as goods. Insurance was no exception and the premium (and investment) income of insurers plummeted. The result was a dramatic increase in the competition between insurance companies as they struggled to hold existing policyholders and find new ones. Under these competitive and environmental pressures, Erie Insurance's claims manager, Samuel P. Black, Jr., decided in 1933 to venture into underwriting. His objective was to make a better automobile insurance policy that would provide policyholders with more coverage, while at the same time retaining the low cost and high level of service that the policies already offered. A better policy, the ERIE's claims manager realized, would provide the company's sales force with a more competitive and marketable product. Black's decision to innovate in product development was a major step toward making Erie Insurance a truly entrepreneurial firm.
