Time Line - 21st Century Insurance

21st Century auto insurance's success story begins with its founder Louis W. Foster. After 20 years as an independent agent in the insurance business, Mr. Foster founded the original company in 1958 in Los Angeles as an inter-insurance exchange. An inter-insurance exchange is similar to a cooperative where policyholders work together to finance and insure the losses of the other policyholders.The one-employee office grew rapidly and in 1966, 21st Century auto insurance moved to Century City to accommodate its expanding staff and volume of policies. The company celebrated a major milestone at the same time — achieving $1 million in premiums in a single year.

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In 1968 the decision was made to convert the inter-insurance exchange to a capital stock company for two reasons. First, the federal government had minimized the tax advantages for the exchange. Second, the California Department of Insurance raised the capital and surplus requirements of reciprocals to $1 million. The decision was considered one of the most unique in the annals of business in California. The policyholders of the exchange ultimately became stockholders in the newly structured company. The profits in the exchange were used as a basis for measuring the amount of equity the policyholder would be entitled to in the new company. As a result, people who had bought insurance to save money received the added benefit of becoming stockholders. In 1969 the company wrote $2 million in premiums; $5 million was reached in 1972, and $10 million in 1975.