11 Oct 2016
Following on from yesterday's blog on our use of calculators I thought I'd write a little bit about our early use of computers for large-scale calculations, such as working out the bonus due on with-profit life policies.
As insurance companies expanded and the number of policyholders increased, the work undertaken by life office staff to calculate and make the bonus payments also grew. In the 1880s staff at Provident Mutual made payments to policyholders in person: on bonus day the office opened at 10am for customers to come in and receive their bonus payments, staff waited behind the long table in the board room and, according to reminiscences:
at the elbow of each member of the staff was placed a bottle of whisky and a siphon of soda... to help them through the day. - recollections of bonus day
By the 1920s it was no longer possible to distribute bonuses in the same way: in 1926 Norwich Union Life sent out 45,000 bonus notices in one day, representing a distribution of £4,000,000. Each notice had to be placed in a separate envelope and 25 men were occupied for 2.5 hours in sealing them down. The total weight of the envelopes amounted to 1 and a quarter tons; the photograph below shows them ready to be dispatched.
Norwich Union, Bonus notices ready for dispatch (1926)
The sheer number of calculations involved made the bonus calculation an obvious subject for mechanisation. Until the mid 1920s staff at Sun Life calculated the bonus using Burrough's calculating machines like this one...
Burroughs calculator, Sun Life (c1920)
... but in 1927 the company was one of the first life insurers to install a (hired) Powers punched card machine to take over the bonus calculation.
This series of snapshots from 1939 shows the Powers-Samas punched card machine in use by the company at Delrow House, near Watford. Sun Life evacuated to Delrow House (and other locations) during the Second World War.
Powers-Samas punched card machine, Sun Life (1939)
In 1956 the company took the next step and placed an order with Powers-Samas Accounting Machines Ltd for a Programme Controlled Computer or PCC. The computer itself cost the company £17,850 and, as they also ordered three F21 Tabulators to run off it, the total cost of the installation came to £67,350 – the equivalent of over £4 million today.
Control panel of the Programme Controlled Computer
PCC back panel
The photographs above show the front and back of the control panel from the original PCC which is now in the archive collection.
The company had initially hoped to have the new machine installed and ready to calculate the 1958 bonus, but it didn't arrive in time so the first computerised bonus calculations were actually made on a British Railways PCC at Swindon, which Sun Life borrowed on Thursday and Friday evenings and over the weekend.
These photographs show D H (Bill) Bailey of Sun Life running the British Railways PCC to calculate the 1958 Sun Life bonus.
Sun Life, D H Bailey at PCC controls (1958)
The whole operation took 2.5 weeks and it was estimated it saved the office more than 2,500 man hours. This served to prove the value of the new system and to finally quell the doubts of some of the senior executives.
Staff in the fledgling computer department at Sun Life also worked hard to explain the mysteries of the computer to their colleagues. The flow chart of a bus journey, below, is taken from a series of articles which appeared in the staff magazine in 1959 and 1960 under the title "electronic thinking " and was intended to demonstrate the processes involved in breaking down a simple every-day procedure so that it could be programmed into a computer.
Sun Life, Programming flow chart example (1960)
Instructions were fed into the PCC using Bakelite plaques like the one below.
Computer programme 'plaque' (1959)
Each plaque could accommodate 40 instructions and the PCC could take up to 4 plaques, so 160 instructions were available to the programmer during any one passage of cards through the machine. The programming was carried out by inserting special rivets in the appropriate holes in the plaques.
The new computer was finally installed in May 1959, the same year that a working party at Norwich Union produced a report on the use of computers in insurance which had this to say about the potential savings involved:
"… the computer department to be staffed by some 36 persons, at an annual salary cost of some £25,000, but over the whole field of operations we anticipate that work which is at present employing 312 persons at Head Office plus 90 at Branches, at a total annual salary and machine cost of £260,000, will be accomplished by 185 staff at Head Office and 50 at Branches, at an annual cost of £155,000."
The report also concluded that staff would "welcome the added interest which the computer will bring to some of the routine work."
Although staff at Sun Life had initially wondered whether they had enough suitable work to justify buying the PCC, before long it was being used for the calculation of premium rates and salaries, as well as running the bonus and valuation calculations: in fact the PCC was used so extensively that the company had to buy a second one in 1962.
I'll leave you with another computer story from 1962. In April that year Commercial Union set up its first computer centre at Concord House in Exeter. The new computer was nicknamed “Cutie” (which stood for Commercial Union Totally Integrated Electronics) and, according to a contemporary press report “does the work of about 200 girls”. The same report described the unveiling of this sculpture in the foyer of the centre...
Anthony Hollaway sculpture, Concord House, Exeter (1962)
... along with the anecdote that two domestic staff had been overheard discussing it and clearly believing it to be the computer itself! (which actually looked like this.)
Commercial Union, Computer Room at Concord House (1962)