The Development of the Life Insurance Business

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The Development of the Life Insurance Business
In the early years the development of the life insurance
 business in Europe was
very slow. Although life insurance policies were written in England in the late
16th century, the scientific basis was not ~vailable. The first mutual life
insurance company, the Society of Assurance for Widows and Orphans, founded
in 1699, did not had much success. In 1706, the Amicable Society for a
Perpetual Assurance Office started business and had the monopoly in the world
until the establishment in 1721 of the London Insurance Corporation and the
Royal Exchange Assurance Corporation. These companies limited at 45 the age
of their members and the annual premium was the same for all members
independently of their age and health. It is the need to insure people over 45
that probably generated research in mortality rates.
23
The Equitable Society was established in 1756 and was the first company to
write whole life insurance policies at a level premium. For the first time also,
premiums varied with the age of the insured By the middle of the nineteenth
century there were well established companies in London, Liverpool,
Edinburgh, Glasgow. However, the Catholic Church in particular, raised serious
questions about the morality of life insurance. Life insurance was considered an
immoral wager on human life. Indeed, life insurance was prohibited in France
until 1820. The first French company opened in 1819 as the "Compagnie
d'Assurances Generales".
The first Dutch company was formed only in 1807, and the first German
company in 1827. Comparatively, the first life insurance company in the United
States was created in 1759 as The Presbyterian Synod of Philadelphia. The
Pennsylvania Company for Insurance on Lives and Granting Annuities was
established in 1812 and by 1851 there were 18 life insurance companies in the
United States.
In Canada, the Scottish Amicable Life Assurance Society opened an Office
in 1845, to be followed by the Colonial Life Assurance Company, a subsidiary
of the Standard Life Assurance Company of Edinburgh and the Aetna Life
Insurance Company of Hartford, Connecticut. Hugh C. Baker established the
first Canadian life assurance company, The Standard Life of Canada, in
Hamilton in 1847.

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