Racial Segregation and Insurance Enterprise Among Black Americans in Northern Cities

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At the turn of the century, many white-owned insurance firms discriminated against blacks by denying them coverage or by charging them extraordinarily high premiums. This discrimination created a void that was successfully filled by black insurance entrepreneurs who built upon an old tradition of self-help. My study adds to this account by showing that, in northern cities during the Great Migration, there was a significant, positive association between the representation of blacks in insurance occupations and the spatial isolation of black populations. This finding suggests that, during the study period, many blacks were drawn into the insurance business by the prospect of serving a geographically based market of co-ethnic consumers. I conclude that residential segregation by race, an ecological factor, played an important role in the development of insurance enterprise among black Americans in the urban North.