The Century acquisition
A central part of Tapscott's strategy was to move FPI into general insurance but there were no powers to do so under the Friends' Provident Institution Act 1915. However, there was nothing to prevent it investing in a company and in 1918 FPI's life fund bought the Century Insurance Company of Edinburgh at a cost of £507,000, 15 per cent of the life fund's assets. Century was founded in 1885, as Sickness and Accident Assurance but as the general insurance business expanded it changed its name to Century Insurance Co. in 1901. Unlike FPI, Century had well-established branches with five in Scotland, 13 in England, one in Wales and two in Ireland and these were intended to be the vehicle for FPI's expansion. Century had also developed significant overseas interests. By 1914, agencies had been opened in eight European countries, two in Australia and three in India. A shred underwriting agreement had also been made with Henry W Brown, which operated in most states of the United States.[1]
Following the Century acquisition, the FPI head office was moved from Bradford to Kingsway, London; the head office of Century remained in Edinburgh but its general insurance business was moved to London. The Century agents were used to expand FPI's life business. In recognition of the changes, in 1920 the name of the company was changed to Friends' Provident and Century Life Office although legally Century remained owned by the FPI life fund. Apart from losses in marine insurance, the combined business made good progress. Through Century, the Pacific Coast Fire Company of Canada was also bought in 1920 and there was a further significant increase in the fire business when in 1926 it bought Liverpool Marine & General Insurance.[3] The growth in business required larger premises and in 1928 a new office at 7 Leadenhall Street was bought. However, the expansion of Century's business, particularly in North America was causing strains that would eventually lead to its disposal.[1]
By the late 1920s, the growth in Century's business was requiring an equivalent increase in capital and this put a strain on the resources of the FPI life fund. A new holding company, Century Insurance Trust, was formed to hold all the general insurance companies and this was able to raise its own loan capital. Worse was to come in the form of the Wall Street crash of 1929 and the subsequent depression. The Group was more heavily invested in U.S. and Canadian stocks than most life companies and those investments fell by more than 50 per cent. More than 60 per cent of Century's general insurance business was written in the U.S. and Canada; its premium income fell by 25 per cent over the two years 1929 and 1930 and underwriting results were also poor. By the end of 1930, FPI 's life fund assets were valued at five per cent less than its liabilities. FPI even cancelled its planned centenary bonus. Substantial cost reductions and better fund revaluations allowed the life business to grow. Friends Provident began writing pensions business in 1934 and this became large enough to form a group life and pensions department in 1937. By the end of the 1930s, life premium income was double that of 1929.[1]
