ABSTRACT
The economic earthquake of the Depression caused a significant decline in the production and sale of cars and trucks in the United States. Consumers also cut back on the purchase of services as well as goods. Insurance was no exception and the premium income of insurers plummeted. Samuel P. Black's decision to innovate in product development was a major step toward making Erie Insurance a truly entrepreneurial firm. An insurance policy is a contract between the policyholder and the insurer. The insurance company agrees to pay the policyholder in case some future accident should occur which meets the conditions laid out by the insurer. Historical factors too served as a brake on innovation in the insurance field. By the 1920s, the most important rule and rate making body for motor vehicle insurance was the National Bureau of Casualty and Surety Underwriters. In 1933 Erie Insurance's claims manager became the firm's champion of innovation through new policy development.
