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AFI History
Originally chartered in February 1887, the Army Cooperative Fire Insuring Association responded to the critical need of serving officers and their families on frontier garrison duty for protection of their personal property. In the years after the end of the Civil War the U.S. Army, as has become characteristic at the conclusion of major conflicts over the years, returned to its small, ‘Regular Army' roots and resumed the ante bellum Indian War campaigns. Some ten regiments of horse cavalry and twenty regiments of infantry, supported by a diffuse dusting of artillery and logistic support units, secured some 850 thousand square miles of territory in the American West. These regiments were scattered in small units, on primitive garrisons arrayed generally along north-south military roads covering the major routes linking Texas and Missouri to settlements in the Southwest, California and the Pacific Northwest.
Young officers, mostly West Point graduates, moved west to join their units, married, raised children and grew gray in hard service on the frontier during the concluding three decades of the Nineteenth Century. Frontier postings offered few amenities: officers and the few married soldiers often were quartered in inadequate temporary billets between long deployments into hostile territory. When units were reassigned to a new garrison, families and their few possessions moved over primitive roads in horse drawn wagons accompanying the logistical elements of the unit. Fire was a constant threat in the flimsy structures that constituted an ‘installation' in those days; generally there was no integral fire fighting capability on the post, thus the fire guards were seldom able to accomplish much beyond saving the occupants of a burning building. Commercial property insurers, accustomed to lower risk exposures in the urban areas of the East, were not willing to assume the risk of loss presented by the frontier Army.
Captain Arthur MacArthur, of the 13th U.S. Infantry and the father of General Douglas MacArthur, reportedly became intrigued with the concept of cooperative ‘mutual insurance' when he traveled to Fall River, Massachusetts to purchase cotton uniform cloth for his regiment. While there he inquired of the owners how they secured their very flammable holdings against fire. Informed that they had formed a cooperative association to insure each other, MacArthur became captivated with this novel concept and, upon his return to Fort Leavenworth, discussed it with Lieutenant Colonel Abram K. Arnold of the 1st U.S. Cavalry, suggesting that a similar association of officers to mutually insure personal property against fire would effectively address the serious financial risks then borne solely by the officer and his family.
The first meeting of the Association took place on 16 November 1886. At that meeting MacArthur and Lieutenant R. G. Hill of the 20th Infantry were directed to draft the constitution and bylaws of the organization. These were submitted to a meeting of interested officers on 3 February 1887 and approved at the first meeting of the Association on 7 February. The chartered purpose of the association was simply "...to provide a benefit to its members." The concept of cooperative mutual insuring MacArthur brought back with him from Fall River was novel at the time, but was nonetheless a powerful idea. Some sources cite MacArthur's original charter as the model for MAJ William Garrison's United States Army Automobile Association (forerunner of today's USAA) in 1922. USAA - International Directory of Company Histories states the following:
USAA was founded in 1922, when Major William Henry Garrison called together 24 of his fellow army officers at the Gunter Hotel in San Antonio, Texas. The purpose of the meeting was to discuss solutions to the problem of automobile insurance for army officers. Because of their frequent moves, officers often found that their policies were extremely expensive and prone to cancellation. Moreover, many insurance companies were unreliable and failed with some regularity, leaving their former policyholders without insurance.
The 25 men present at Garrison's meeting decided to form a mutual company and thereby would insure one another. They took as their model the Army Cooperative Fire Insurance Company-based at Fort Leavenworth since 1887-and called the new enterprise the United States Army Automobile Association. An agreement was signed, and a president, vice-president, and board of directors were established, all of whom were active duty army officers.
In the intervening century and a quarter, the business of insurance has certainly become a great deal more complex, militating that the association constantly evolve its structure and operations to keep pace with the demands of the market, insurance law and financial regulation. Eligibility has been expanded to include officers and enlisted personnel of all the uniformed services, honorably discharged veterans, dependents of members and Department of Defense civilians; in addition to the original coverage of personal property exclusively against the peril fire, the Exchange now offers personal auto, homeowner and fire, and personal liability coverage, nationwide. Further, Armed Forces Insurance Agency is able to serve the specialized needs of many members for those lines of business not written by the Exchange.
Much has changed, but the force of the original concept adopted by MacArthur and some thirty-five of his contemporaries at Fort Leavenworth is and will remain the pole star guiding the organization. Indeed, "Our mission is you." In the years to come, our subscribers may rest assured that we will continue to seek to meet the chartered purpose adopted by our founders those many years ago: provide a benefit to its members.
