The Early History of Modern Insurance

The Early History of Modern Insurance

1300 Scandinavia: the Laws of Wisby wen: promulgated regulating

activitie~ of members of the Hanseatic League and limiting the use of

bottomry agreements.

1310 Belgium: institution of the Chamber of Assurances in Bruges.

1347 Italy: first marine insurance contract written in Genoa.

1380 Portugal: insurance is compulsory for ship owners under contract with

the State.

1435 Spain: an ordinance regulating bottomry in Barcelona is probably one

of the tirst regulation of marine insurance contracts.

1500 Portugal: first known treaty on insurance published in Lisbon by

Pdru'> Santema "De Assecurationibus et Sponsionibus Mercatorum".

1559 The Netherlands: regulation of insurance activities. It is estimated that

more than 500 people work in the insurance business in the city of

Anverfo>.

1574 England: Richard Candeler, a mercer, obtain from Queen Elizabeth I ,

a grant to establish the Chamber of Insurance for the Sale of Marine

Insurance.

1600 France: publication in Rouen of the "Guidon de la Mer".

1666 The Great Fire of London which began on September 2nd, burned for

five days and destroyed 13200 houses and 89 churches. It destroyed

the Chamber of Insurance and its records. It is apparently for this

reason that we owe the paucity of information concerning the insurance

practices of those early days.

J 667 England: The first tire insurance office is established by Nicholas

Barbon and became the Fire Office in 1680.

1668 France: On June 5, the State published the decree establishing the

Chamber of Insurance.

1677 Gernmny: creation of the Fire Office in Hamburg.

1681 England: establishment of the City of London's Mutual Fire Insurance

Scheme to compete with the Fire Office. In November, 1682, the City

cea"ed writing fire insurance and refunded the premiums it had

collected. It was certainly the first price competition in fire insurance

history.

19

Table 2.1 (continued)

The Early History of Modern Insurance

1681 France: Colbert introduces the "Ordonance de la Marine".

1688 England: Edward Lloyd open the Lloyd's Coffee House at Tower

Street in London. He moved his tavern to Lombard Street in 1691 and

published the first "Lloyd's News" letter in 1696. It was renamed

"Lloyd's List" in 1734.

1696 England: establishment of the Amicable Contributors for Insurance

from Loss by Fire which became known as the Hand-in-Hand Office.

1706 England: establishment of the first incorporated insurance company

"The Company of London Insurers"

1710 England: Sun Fire Office is established by Charles Povey. It was

organized as a partnership with 24 partners and incorporated in 1726 as

the Sun Insurance Office. It is still in business today.

1720 England: The London Assurance Corporation and The Royal

Exchange Assurance Corporation are chartered and held a monopolistic

position in the marine insurance field until 1824.

1779 England: the underwriters at Lloyd's adopt a uniform marine insurance

contract.

The Mercantilist Theory and

the Development of Overseas Business

History was marked by the application of ercantilism doctrines to the relation

between England and the colonies. Mercantilism was a restrictive trade policy

designed to enrich England by utilizing the agency of the State to strengthen the

position of commerce enterprises in trade, manufacturing and agriculture and by

attaching the overseas possessions in a subordinate capacity to the economy of

the mother country. Insurance services were traded almost exclusively in the

London marlcet (Pfeffer and Klock, 1974, p.29).

Marine insurance was the first branch of the industry to gain a foothold in

the colonies. Agencies of the major underwriters of England were established in

Philadelphia, New York and Boston and the bulk of the business was conducted

through the offices in London. It is interesting to recall the early history of

insurance in North-America as the development of insurance business in other

parts of the world has followed closely the same pattern.

Overseas business outside Europe before the end of the nineteenth century

had developed primarily through agencies. The major English insurance

companies had established offices in the West-Indies, South America, South

Africa and in the Far East. Another point which emerges from the history of

overseas business in the nineteenth century is the extent to which it had

followed the development of foreign trade, so that nearly all the agencies before

the first world war were in commercial ports. British Insurance companies

opened representation through some of the British Merchant Houses initially for

marine survey and settlement of claims.