On May 9, 1868, Pacific Mutual Life's first policy was ceremonially issued to Leland Stanford, the company's first president from 1868-1876. While serving his second term as a United States Senator from California, he founded Leland Stanford, Jr. University (known today as Stanford University) as a memorial to his only son. Three weeks after the 1893 commencement, on June 21, Leland Stanford died. His business affairs were left in a tangled state - a circumstance aggravated by the panic of 1893.
Since the University derived its support at that time exclusively from Stanford's fortune, the financial situation became grave. The San Francisco Examiner headlined, "No Pay For The Professors!" Intent on preserving the University, Mrs. Stanford used her husband's life insurance policy to soothe the momentary financial distress and ease the plight of the strapped university professors.
In response to the needs of our policyholders, we began offering accident insurance in 1885. This was a drastic departure for a life insurance company at the time, but we recognized that all hazards to human life and health are equally important to plan for. The new accident coverage was popular, and quickly demonstrated its value. The second claim filed (for $50), resulted from an injury sustained while the insured was setting a wagon brake-only fifteen minutes after becoming one of our policyholders.
On March 12, 1906, Pacific Mutual Life consolidated with Conservative Life, a young life insurance company from Los Angeles. With almost eerie foresight, additional fire insurance was placed on the Pacific Mutual home office in San Francisco, additional vaults were constructed, and older vaults were reinforced. These actions were completed by early April.
On April 18, a 48-second earthquake rocked San Francisco leveling hundreds of city blocks. Although our seven-story home office building survived the initial earthquake, our home office was sacrificed as a firebreak to prevent further damage to the city. At the time of the earthquake, a Pacific Mutual employee named Richard Mier, Chief Clerk and Office Manager, realized that valuable bonds were in a safe that was not fireproof. Quick thinking Mier courageously removed the bonds, along with several stock ledgers and ran down five flights of shaking stairs. He wrapped the bonds to protect them and climbed to the top of Sacramento Street where he then buried the important documents in the basement of his home where they would be safe until needed - a couple days later.
On May 18th, the Board of Directors met for the first time since the catastrophe. There amongst the rubble, they formally voted to establish a new home office in Los Angeles. The staff was sent ahead, and a new chapter in our history would begin.
Pacific Mutual Life's non-cancellable disability policies proved to be popular and disastrous during The Great Depression. With unemployment surging, the product became a financial drain, threatening the security of the company. Insurance Commissioner Samuel L. Carpenter proposed a bold blueprint for reorganization of the company. He endorsed a principle that already guided Pacific Mutual Life: primary concern for the interest of policyholders. Carpenter and the Pacific Mutual board provided that the company's life insurance policyholders were to be given the opportunity, through mutualization, to become the owners of the company.
Realizing that advanced electronics technology (i.e., computers) would become powerful tools that could be used to address increasingly complex servicing requirements, Pacific Mutual Life in 1955 became the first private enterprise west of the Mississippi to install and fully utilize what was a "large scale electronic data processing system" Univac I. For a seamless transition to the new Univac I, and so our policyholders would not experience an interruption in service, both systems had to be operated simultaneously for several months. Management was faced with an employment problem...where could sufficient staff be found to operate the old system that was being phased-out?
True to its long-term commitment to employees, Pacific Mutual Life didn't like the idea of hiring people that would eventually become unemployed. So, a solution was found-one in keeping with our traditional ingenuity: the wives of Pacific Mutual Life executives and management eagerly volunteered their help. Dubbed "Project Helpmate," this enthusiastic and intelligent group of women promptly completed the phase-out of the old system.
Nineteen hundred and sixty-eight marked our centennial. The road to any centennial is not without trying times, and is certainly a time for celebration, and reflection. In a letter to employees, then company President Stanton Hale captured these emotions with eloquence. "Pacific Mutual Life is 100 years old, not totally because of much good fortune, but often times in spite of ill fortune. Growth accomplished with vision and through struggle is honest, strong growth. This is our heritage. It is a rich one-still filled with vision and with promise. It takes work to transform vision into reality. A century of work has made us one of the largest and best in our industry. As we start Century II, may the dedication, energy and vigor which made this anniversary possible continue to be evident in our efforts to serve and grow in the future." At the centennial dinner, celebrating Pacific Mutual Life's milestone, then California Governor Ronald Reagan was the keynote speaker.
Project '66 was a group of eight employees (a think tank of sorts) established in the year 1966 that set out to determine how an insurance company should be structured in the future. The project concluded that it would be best for the company to move from its office space in Los Angeles to a location that would enable an operations center with more space. And with the advent of the computer, Project '66 envisioned the company going from a highly clerical staff to a more technical staff that would benefit by working in a high-tech area. In an effort to find a such community that would offer employees a high standard of living, as well as good schools for their children, management decided that Newport Beach, California would make a perfect match for the company. The company purchased land in Newport Center surrounding the new Fashion Island shopping center in Newport Beach in 1970 and moved into its modern-design Home Office in 1972.
On July 1, 1992 Pacific Mutual Life won court approval for its proposal to rehabilitate First Capital Life. First Capital, based in San Diego, CA, had been taken over by the California Insurance Commissioner in 1991 because of concerns about the company's investments, consumer confidence, and ultimately, its financial stability. First Capital's assets of approximately $4 billion and its life and annuities owned by a quarter million policyholders were merged into a new Pacific Mutual Life subsidiary, Pacific Corinthian Life. Pacific Mutual then managed the business soundly for five years before merging Pacific Corinthian into Pacific Mutual Life thus offering lifetime protection for all of the former First Capital policyholders.
In 1971 Pacific Mutual Life launched a new subsidiary, Pacific Investment Management Company (PIMCO). One of its original co-directors was then-Pacific Mutual Life employee William Gross, now a noted bond manager, and Morningstar's 1998, 2000, and 2007 Fixed Income Manager of the Year. PIMCO offers separate account management services primarily for employee benefit plans, endowments, and foundations.
In March 1994, Pacific Mutual Life reached an agreement that outlined a merger between PIMCO's holding company, PFAMCo, and a company that was publicly traded at that time. This reverse merger resulted in a publicly traded company called PIMCO Advisors, a holding company for PIMCO and four other investment subsidiaries. Today, PIMCO is one of the most respected names in fixed income management, due in large part to its total return approach and impressive long-term performance record, and remains a leading institutional money manager. While PIMCO's headquarters are directly across the street from Pacific Life's headquarters, they are no longer affiliated with our company.
On September 1, 1997, Pacific Mutual Life Insurance Company completed its conversion to a mutual holding company structure. Our life insurance company, formerly known as Pacific Mutual Life, is now a stock life insurance company, renamed Pacific Life Insurance Company (Pacific Life). We removed the word "Mutual" from our name to reflect that our insurance company has converted from a mutual to a stock form. All of the policyowners of Pacific Mutual Life are now policyowners of Pacific Life and their policies and contracts remain unchanged. Although our new structure allows us access to capital funding if needed, Pacific Life currently has no publicly traded stock and no outside investors. The company is operated for the benefit of our policyowners and clients, so we can and do take a long-term view in our strategies and investments. Our policyowners are all members of Pacific Mutual Holding Company, which ultimately owns and controls Pacific Life.
In response both to demand from members of our distribution network and to current market conditions, Pacific Life introduced its first line of retail mutual funds. The products, which initially featured a family of 14 funds, reached sales of $94 million after just two months.
Pacific Life opens a new business center in Omaha, Nebraska and changes its state of domicile from California to Nebraska, saving millions of dollars in retaliatory premium taxes.
Pacific Life's subsidiary, Aviation Capital Group, acquires Boullioun Aviation Services and becomes one of the top 5 aircraft operating lessors in the world.
Pacific Life completes its new division headquarters for the Life Insurance Division. The almost 250,000 square-foot office building is located in Aliso Viejo, CA.
Pacific LifeCorp completes the purchase of the International Life Reinsurance segment of Scottish Re Group Limited. Renamed Pacific Life Re, this subsidiary provides reinsurance solutions to insurance and annuity providers in the U.K., Ireland, and in selected markets in Asia.
The transaction, with approximately $106 billion in individual life reinsurance face amount, makes Pacific Life the leading life retrocessionaire in North America, with an approximate 41% share of the market.
In August 2011, Pacific Life acquired JPMorgan Chase's U.S. Pension Advisory Group. Now called Pacific Global Advisors, the firm provides innovative and customized investment and risk management solutions to pension plans and other institutional investors.