Structuring the Information Age: Life Insurance and Technology in the Twentieth Century (review)

Structuring the Information Age delineates the incorporation of the computer into the life insurance bureaucracy and how life insurance affected the rise of computers. The life insurance industry is an excellent choice for a study of how information technology 'revolutions' actually are incrementally appropriated by enterprises and society. Insurance as a financial intermediary depends on information for its existence. Changes in information manipulation fundamentally affect management practice. Moreover, it was a large market for producers of business machines. The industry also was highly organized through industry-wide cooperative associations that set standards for their members. These organizations acted as information clearinghouses that exerted pressure on corporations to build hardware and software to meet industry needs. JoAnne Yates also intervenes into debates on technological transformation relying on Anthony Giddens's structuration theory. This dualistic theory posits that technical change can only take place within the confines of institutions and human action. "Structures, whether an industry association or a particular work process in a firm, both enable and constrain, but do not determine, individual human action," she argues (p. 5). Finally, this study will shed some light on why productivity gains may have lagged behind the introduction of new technologies.

Using a wide variety of sources especially rich from the life insurance industry perspective (including company archives, trade publications, and association proceedings), Yates carefully notes not only how the technology was introduced but also how insurance management haltingly changed to maximize machine innovation. Her sources on technology are deep, and much to the credit of the text, Yates unearths what technologies failed and why.

During most of the nineteenth century, records were generally handwritten or typed. As the industry grew, it required more space for these records as well as ever-larger clerical staffs. In 1890 Herman Hollerith, working for the Census Bureau, demonstrated his tabulator to the Actuarial Society of America. His machine used punch cards to store information that could be manipulated much more rapidly, setting the groundwork for changes in management ideology and practice. Yates describes the slow implementation of this technology, how insurance companies shaped the process, and how they directly pressed vendors to produce or provide devices that could print reports, documents, and policyholder bills. For the next several decades, companies experimented with a variety of different devices marketed by the precursors to IBM and Remington as well as machines that were produced in-house or through associations. Companies that invested in one machine rather than renting it were more often than not stuck in a technological dead end.

The Tabulator Era ended as the first generation of computers proved to be faster and possess much greater functional capacity. Computers developed during Second World War, in part from federal government needs to maintain information and to fight the war, especially ballistics. Insurance men who participated in the logistical waging of the war became important in the postwar period in the experimentation and implementation of machines emerging out of the war. Edmund Berkeley, an actuary at Prudential, served with the Naval Reserves at Harvard, where he had first-hand experience with the Mark I and II. He became a strong proponent of computers within the industry and sought manufacturers who might produce a computer with attributes conducive to industry needs as determined through its trade associations.

Ironically, Prudential's biggest competitor, Metropolitan, was the first firm to purchase a computer in 1954. The lag period between the first computers and their introduction into the industry reinforces Yates's argument. Companies wanted the certainty that the machines would be cost-effective and that they were capable of being integrated into idiosyncratic company operations. They insisted that computers transfer information stored on cards to tape and download back onto cards, because it was imperative to have a physical document. Most companies also cautiously incorporated computers into their large operations sometimes on a department-by-department basis. Thus, computers initially...