In 1612 the Insurance Chamber at Amsterdam was established by public authority, and received several privileges.
Malynes asserts, but without either proofs or probability, that the people of Antwerp were first taught insurance by the English; and says that, as the merchants assembled for transacting business in Lombard-street, so called because certain Italians from Lombardy had lombards there, or houses for lending money on pledges, long before the building of the Exchange, it became customary, as it was in his time (1622), to be guided in policies by what was done in Lombard-street, in London.
[M‘Culloch states[711] that it is probable insurance was introduced into England some time about the beginning of the sixteenth century, for it is mentioned in the statute 43 Eliz. c. 12, in which its utility is very clearly set forth, that it had been an immemorial usage among merchants, both English and foreign, when they made any great adventure, to procure insurance to be made on the ships or goods adventured. From this it may reasonably be supposed that insurance had been in use in England for at least a century previous. It appears from the same statute, that it had originally been usual to refer all disputes that arose with respect to insurances to the decision of “grave and discreet” merchants appointed by the lord mayor. But abuses having grown out of this practice, the statute authorized the lord chancellor to appoint a commission for the trial of insurance cases; and in the reign of Charles II. the powers of the commissioners were enlarged. But this court soon after fell into disuse; and, what is singular, no trace can now be discovered of any of its proceedings.]
Guicciardini, who wrote his Account of the Netherlands in 1567, remarks, in describing Antwerp, that the merchants there were accustomed to insure their ships. Anderson says that this is the first instance of maritime insurance, which is very astonishing, as he thinks the invention of insurance is to be found in Suetonius, and in the laws of the Isle of Oleron.
A most useful imitation of insurance in trade is the institution of insurance-offices, to indemnify losses sustained by fire. As far as I have been able to learn, companies for that purpose were first formed towards the middle of the last century, though houses were insured by individuals much earlier. The fire-office at Paris was established in 1745; that of the electorate of Hanover in 1750; that of Nassau-Weilburg in 1751; those of Brunswick-Wolfenbuttel and Wirtemberg in 1753; that of Anspach in 1754; that of Baden-Durlach in 1758; that of the county of Mark in 1764; those of Saxe-Weimar and Eisenach in 1768; and that of the Society of the Clergy in the Mark of Brandenburg[712], to insure goods and household furniture, was established in 1769.
It is perhaps known to few, that even in the beginning of the seventeenth century, a proposal was made by some ingenious person, that all the proprietors of land should insure the houses of their subjects against fire, on their paying so much per cent. annually, according to the value of them. The author of this scheme presented it to count Anthony Gunther von Oldenburg, in the year 1609, as a means of finance not to be found in any work printed on that subject. The author in his plan said[713], that “as many fires happened by which a great number of people lost their property, the count might lay before his subjects the danger of such accidents; and propose to them, that if they would, either singly or united, put a value on their houses, and for every hundred dollars valuation pay to him yearly one dollar; he, on the other hand, would engage, that in case by the will of God their houses should be reduced to ashes, the misfortunes of war excepted, he would take upon himself the loss, and pay to the sufferers as much money as might be sufficient to rebuild them; and that all persons, both natives and foreigners, who might be desirous of sharing in the benefits of this institution, should not be excluded. The author was confident that, though the damage might fall heavy at first, a considerable sum would be gradually raised, from year to year; and that every one might thus insure his houses against accidents. He had no doubt that it would be fully proved, if a calculation were made of the number of houses consumed by fire, within a certain space, in the course of thirty years, that the loss would not amount, by a good deal, to the sum that would be collected in that time. He did not however advise that all the houses in every town should be comprehended, as the money claimed might amount to too much; but only that some and certain houses should be admitted into this association.”
I shall here insert, from the same author, the count’s reflections on this plan, and the conclusion which he formed:—“It is to be considered,” says he, “what sum every proprietor of land may with certainty raise and receive; whether the proposed plan can, to the undoubted benefit of the subjects, and the advantage of their lord, be honourably, justly, and irreproachfully instituted without tempting Providence; without incurring the censure of neighbours; and without disgracing one’s name and dignity; in the next place, that this institution may not have the appearance of a scheme to bring money into the country; and still more that it may have no resemblance to a duty, tax, or impost, but rather to a free contribution, or unconstrained remuneration for being insured from danger, and by which losses being made good, houses can be sooner rebuilt, and put in their former condition.” The count allowed that the object of the plan was good, considered in every point of view, and that a company composed of common individuals might be formed to insure each other’s houses, and pay the losses sustained by fire: but he concluded, that, if he undertook the plan, Providence might be tempted; that his own subjects might be displeased; and that, improper ideas being formed of his conduct, he might be accused unjustly of avarice. “God,” he said, “had without such means preserved and blessed, for many centuries, the ancient house of Oldenburg; and he would still be present with him, through his mercy, and protect his subjects from destructive fires.” He dismissed, therefore, the ingenious author of this plan, but not without rewarding him according to his usual liberality.
[Insurance against fire has been known and carried on in England for nearly a century and a half; at present the number of British Fire Offices amounts to nearly twenty. The premium demanded for insurance varies from 1s. 6d. to 10s. 6d. per £100 according to the supposed risk; the duty is enormous, being no less than 3s. per cent. on the amount insured. This tax yields a considerable addition to the revenue; in 1842 it amounted to £986,420, which corresponds to £563,668,571 value of property insured, leaving out of consideration the value of insured farming stock, the duty on which was repealed in the year 1833. On common risks the duty is no less than 200 per cent. upon the premium! “Such a duty” observes M‘Culloch, “is in the last degree oppressive and impolitic. There cannot, in fact, be the slightest doubt that, were it reduced, as it ought to be, to one-third its present amount, the business of insurance would be very much extended; and as it could not be extended without an increase of security and without lessening the injurious consequences arising from the casualties to which property is exposed, the reduction of the duty would be productive of the best results in a public point of view; while the increase of business would prevent the revenue from being materially diminished.” Several attempts have of late been made in Parliament to induce the government to lower the amount of duty, hitherto without success; it is however to be hoped that some other mode of raising the revenue may be devised than that of taxing so enormously the prudence of the industrious classes[714].
In addition to the marine and fire insurance, a somewhat similar speculation has been applied to human life, in the formation of life-insurance companies. These receive small annual payments in consideration of securing to the relations of the assured, or others to whom his property may be bequeathed, a stipulated sum. This arrangement we consider of the highest importance in mercantile countries, particularly to persons engaged in professional or personal occupations, where on the decease of the principal, the agency or appointment is not usually susceptible of transfer or bequest. By means of this species of insurance property is secured to descendants, who, but for some such precaution, might be left destitute. The oldest life-assurance office in London is the Amicable. This company was chartered in 1706, in consequence of application made to her majesty, Queen Anne, by Sir Thomas Allen and others. There are now in London nearly eighty life-assurance companies, of which about sixty are exclusively devoted to that object, and the remainder unite fire-insurance. The terms vary in the different offices, although not considerably, being founded upon recognised sets of tables. A comparative table of the annual rates of premium charged by each British office will be found in Waterston’s Cyclopædia of Commerce. The premium is of course adapted to the probable duration of life; the lowest being £1 7s. 9d. per £100 on a healthy life at the entrance age of 15, the highest, at the age of 60, being about 7 per cent. A diseased condition in most incapacitates for insurance, but in some offices even diseased lives and risks of every kind are insured, of course at a proportional rate[715].
In the reign of Queen Anne several offices were opened for making insurances on marriages, births, christenings, service, &c., and fraudulent practices prevailed to such a degree that by Stat. 9 Ann. c. 6, § 37, a penalty of £500 is imposed on every person setting up such office, and £100 for any person making such assurance in any office already established.