Who was the eccentric visionary who founded Norwich Union?
‘It was unanimously resolved that Mr Thomas Bignold Senior be now removed and dismissed from the situation of Secretary to the Society’. Minutes of a special general meeting, held at the Angel Inn, Norwich on November 9, 1818.
On the face of it, it seems astonishing that the founder of such a successful institution should have been treated in this way. But what is really surprising is that it didn’t happen earlier. Way back in 1805 The Norwich Mercury reported that Bignold had, at a board meeting, picked up the company’s accounts and leapt onto a chair wielding a pair of fire tongs, threatening to break open the head of any director who tried to take the accounts from him. For good measure he then sent his son to collect a pistol and, when he returned with one, told him to shoot any director who persisted.
Perhaps it’s equally surprising that despite the decision to dismiss him at the meeting, he managed to cling on by his fingertips for another seven years.
But then Bignold was no ordinary man. Eccentric, manipulative, arrogant, evasive and not entirely honest he was, nonetheless, a remarkable and visionary businessman, with extraordinary levels of energy and unlimited ambition.
He arrived in Norwich from his native Kent with no insurance experience, although his descendants claimed a family tradition to the effect that he was inspired to set up an insurance company because he had been unable to insure his goods in transit for the move, a story which is almost certainly apocryphal. It was more than 10 years after his move that he first became involved in the insurance business and that was as an employee of another company, not as the founder of Norwich Union.
He married a widow, Sarah Long, with whom he had six children in as many years. Initially he ran the grocery shop which had been her first husband’s business expanding it into the wine trade and acquiring a reputation as a competent businessman. He might have settled for being a mildly prosperous lower middle-class pillar of the city, but he was far too ambitious for that.
A group of local magnates, feeling that the London-dominated market for insurance was ripe for provincial challenge, and profit, decided to set up a company in Norwich and named it the Norwich General. Looking around for someone to run it for them, they alighted on Bignold who became the first secretary of the new company, running it originally as a side-line from his existing retail premises.
It didn’t take long for Bignold to realise that the very immature insurance market offered huge scope for growth and secretly he began to plan to set up his own company to compete with the one by whom he was employed. The normal sources for raising capital could not be approached without forfeiting that secrecy, and he determined instead to raise small amounts from fellow tradesmen who might enjoy joining him in cocking a snook at the rich. Twenty-seven others joined him, each providing a guarantee of £1,000 to create a reserve.
This done, Bignold abruptly left his employer and set up Norwich Union. Given that he had no powerful and wealthy shareholders to satisfy he was able to choose a board mainly comprising small traders, a group who were easy meat for him to manipulate. He took advantage of this to negotiate a superb deal for himself. Regardless of profitability he was to receive 10% of all premiums received. When life assurance was added he received 10% of the first year’s premiums and 5% of each subsequent one. He also managed to introduce into the Deed of Settlement a clause that he could only be dismissed if the majority of members voted for dismissal at a general meeting.
In effect this meant that he could pretty well run the business any way he wished and earn huge amounts if it grew fast. It did – Bignold was exceptionally energetic and able. By 1815, he was earning over £10,000 a year, matching the rumoured income of Mr Darcy in Pride and Prejudice, published just two years earlier.
And the business was not just growing, it was, at that stage, profitable. This enabled bonuses to be paid to the policyholders who, as members of a mutual society were entitled to a share of the profits. These sometimes amounted to as much as 75% of the premiums they had paid – Bignold was certainly in no danger of dismissal – he was at the high point of his popularity.
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But nothing is for ever. Bignold seems to have become intoxicated with his own success. He formed his own bank, run by one of his sons, to handle Norwich Union’s money, and set up another son as the company’s lawyer, a third as his deputy. At the same time he began to take far more daring positions on the kind of risks the company would cover – it was, after all, no skin of his nose if they made a loss, his remuneration was based solely on premium income. To achieve growth he widened the geographic spread of his business, appointing, by the time he was threatened with dismissal, over 500 agents spread throughout the country. One of his wheezes to improve the standing of the company was to gain the endorsement of members of the aristocracy – even if they knew nothing about the nature of the business. One of these was Earl Craven, who was recruited by Francis Noverre, one of the original 27 guarantors, who was a dancing instructor. Craven commented that he only agreed to become a trustee because Noverre was teaching his children how to dance! Given that Norwich Union in more recent years was a major proponent of direct mail it is rather ironic that this was disclosed in a widely distributed vitriolic leaflet.
It wasn’t just the appointment of trustees that caused the vitriol. The market had changed. The Napoleonic War was followed by a major recession. Insurance companies became the targets of fraudulent claims. This wasn’t good for the profitability of any company, but Bignold’s response made things even worse. He seems to have assumed that all claims were fraudulent and behaved in a bizarre fashion with claimants.
In one case he indulged in a farcical ‘Keystone Kops’ chase with a claimant up and down between Norwich and London – at one point they were in the same coach but while the claimant was travelling in the cheaper outside seats, Bignold was sitting inside in comfort, refusing to pay the claim despite an agreed arbitration figure.
Bignold was becoming increasingly arrogant and arbitrary. He engaged in an expensive series of law suits, without any reference to the directors, he seemed determined to refuse all claims, and Norwich Union began to suffer in reputational terms. Eventually the directors issued a statement accepting that he had ’treated clients with indignity and insult’ and behaved improperly.
From then on, Bignold’s fall was inevitable, though he fought an extraordinary rearguard action, despite his increasing eccentricity. At the next annual general meeting the extent of the company’s losses became apparent and when the phalanx of loyal policyholders upon whom Bignold had relied saw their bonuses disappear their loyalty went the same way.
Leading up to the November 1818 meeting which determined to sack Bignold had been two other meetings, one organised by a group describing itself as ‘The Suffering Members from Insurance with the Norwich Union’ and the other just four days later called by the directors to respond to the criticisms made at the former.
Both meetings established committees to investigate what had been going wrong. Characteristically Bignold refused to cooperate with either. When dismissed he refused to go quietly, launching personal attacks on his sons, who had cooperated. The board struggled to get the support it needed to get rid of Bignold under the terms of the original settlement deed he had negotiated but, after four more years it succeeded in removing him from the Fire Society, and another three years later from the Life Society.
By then Bignold’s situation had deteriorated and his eccentricity may have crossed the border with insanity. He had been made bankrupt and incarcerated in a debtor’s prison. He had taken an interest in the shoe industry, patenting the invention of revolving heels for ladies’ shoes.
He had experienced court before, seeking redress from his lawyer son for the cost of a fraud which they had jointly perpetrated on the son’s father-in-law in connection with the marriage settlement. Now he really hit rock bottom, going to court to seek the return of his laundry from the pawnbroker to whom his washerwoman had hocked it when Bignold didn’t pay her bill.
It is good to know that despite these indignities he eventually arrived at some sort of rapprochement with his eldest son Samuel, who was to prove a very able successor at Norwich Union. Even late in life he was still up to his tricks, returning to Norwich Union some securities he had transferred into his own name, in return for an annuity and some cash.
In some ways it is difficult not to feel sorry for Bignold, who ended reviled by many but who had started and built a business which stood the test of time and contributed a huge amount to the prosperity of Norwich. He was, as we say in Norfolk, ’a rum un’.
A fuller account of Thomas Bignold’s story can be found in Chris Armstrong’s book Mustard, Boots & Beer (Larks Press, 2014)
