More today from Insurance Blog for you scholars of Insurance as we take you into Post Renaissance Europe and the Great Fire of London in part five of A Brief History of Insurance:
In previous articles within this series we have discovered that forms of risk management have existed for well over seven thousand years with the ancient Chinese cultures kicking things off, before the Babylonian King Hammurabi laid down the first recorded insurance laws.
These laws, grounded in solid economic common sense spread across the trading nations of the time to land in the Mediterranean where they refined by first the Greeks and then the Romans. After the collapse of the Western Roman Empire, once again it was a sea faring merchant empires that shaped the further development of Insurance.
That empire was the merchant empire of Genoa, which had risen from being a small fishing port to perhaps the leading commercial empire of the Mediterranean Sea within a relatively short period, that we see insurance first appear as a stand alone product, separate from both the Guilds and investments.
However, as we jump just a relatively few years forward now to Post-renaissance Europe, we enter perhaps the most important and exciting period within the history of insurance, as we begin to see modern insurance policies which now very much resemble the sophisticated products we expect to see today.
Whilst the sixteenth century was a century dominated by artists and explorers, the seventeenth century was where the mathematicians, scientists and the economists entered into the spotlight.
Throughout the renaissance, Europe had begun to rediscover its hunger for knowledge, re learning many of the forgotten skills and remastering them(renaissance literally means rebirth). By the time the seventeenth century arrived the questions had become more complex and therefore so did the sciences that developed to answer them.
Europe was no longer remembering, Europe was now learning and this was to have a profound impact upon the development of insurance as an economic product.
The practice of wealthy business men providing business insurance policies for merchants and the like had become reasonably common place by the middle of the seventeenth century. It is widely documented that in his will notable poet and colonist of the time, Robert Hayman, had in fact held two separate insurance policies.
Both referred to in his will dated 1628, these were personal arrangements held with a wealthy Londoner Arthur Duck, a lawyer and member of parliament. However, it was just a matter of decades before these personal arrangements were to become replaced with the emergence of the world’s first true Insurance companies.
The emergence of these companies was encouraged by a combination of scientific and mathematic advancements and tragic circumstance. It was 1666 when the tragedy occurred. We know it today as the great fire of London.
The fire started at some time shortly after midnight Sunday 2nd September 1666 in Pudding Lane in the heart of the city and raged across London for three whole days. It is suggested that over 70,000 of London’s 80,000 population lost their homes in this tragic blaze. It was from the shock and devastation caused by the fire that England’s first ever fire insurance company arrived ‘The Fire Office’ which is regarded by many to be the world’s first insurance company.
This was the beginning of a hugely important period of development for insurance and in the next article within this series we will discover how insurance went through a phenomenal period of transformation in the final decades of the seventeenth century.