CHAP. IV.
FIRST TRIAL CONCERNING LIFE ASSURANCE.—THE MERCERS’—ITS ESTABLISHMENT AND SYSTEM.—THE SUN—JOHN POVEY, ITS PROJECTOR—HIS CHARACTER.—WAGERS ON THE LIFE OF KING WILLIAM.—NEW ASSURANCES.—THE AMICABLE—THE MODE IN WHICH IT WAS ESTABLISHED.—NEW ANNUITY SOCIETIES—ANECDOTES CONCERNING THEM—CLOSE OF THEIR CAREER.
It may be judged that life assurance was in operation by the latter end of the seventeenth century, as a policy was made on the life of Sir Robert Howard, for one year, from the 3rd of September, 1697. On the same day in the following year Sir Robert died, and the merchant refused to pay, on the ground that the policy had expired. Lord Holt, however, ruled, that “‘from the day of the date’ excluded the day itself, and that the underwriter was liable.” This appears the first assurance on a life of which there is positive legal record.
Reference is usually made to the Amicable Society as the earliest institution for the assurance of lives; but the Mercers’ Company, in 1698, commenced a scheme for granting life annuities to the nominees of the assurers, in place of paying down a fixed sum. This was undertaken at the instigation of Dr. Asheton, and its failure is a proof that the duration of human life was very little known, or that sufficient care had not been taken by the Mercers’ Company to enable them to be annuity-mongers with half the success of Audley the usurer, or Lopez the Jew. They formed something like a scale, but it was incomplete. Married men, under 30, were allowed to subscribe but 100l.; under 40, they might not subscribe more than 500l.; under 60, they were limited to 300l. When this was commenced, it was considered a very notable plan. It was thought that it would prove a good business speculation, and, on considerable sums being subscribed, “the Corporation rejoiced greatly.” It was soon discovered, however, that the undertaking was founded on a mistake; so the first breach of faith was in lowering the annuity. This proved insufficient, and the company became unable to meet their engagements. They had fixed the payments to their annuitants at the rate of 30 per cent., and now they saw their funds almost annihilated by the error. At last they stopped payment altogether; but the distress was so acute, that, recollecting one or two forced loans they had made to the monarchs of England in the troublous times of old, they petitioned parliament, in 1747, for assistance. Their tale was a pitiable one: “At Michaelmas, 1745, they found themselves indebted to the said charities, and their other creditors, 100,000l.; they were liable for present annuities to the extent of 7620l.; for annuities in expectancy, 1000l. a year more: the whole of their income being 4100l.”
The desired assistance was granted, and it need not be added that the company is now one of the most flourishing in London.
If the principles on which the Mercers’ Corporation founded its operations were erroneous, it must be considered that Government acted as strangely in its public proposals for life annuities. Nothing can illustrate more strongly the crudities of the science at this period, than the fact, that when loans were raised by William III., on life annuities, no greater annual amount was given to the man of seventy, whose chances of life were so small, than to the man of thirty, whose chance was so large. Thus, the State offered 14 per cent., at any age, and it is curious that these proposals were accepted by very few. It is true that interest was much higher than at present, but this does not palliate the fact, that there was no attempt to vary the rate according to the age.
Before approaching the next movement, it will not be out of place to indicate the establishment of one or two offices which have since added life assurance to that of fire. The Hand-in-Hand was established in 1696, by about one hundred persons. In 1698 they framed a deed of settlement, which was enrolled in Chancery. Ten years later, John Povey, author of the “Unhappiness of England, as to Trade,” projected the Sun. Finding his attempt very successful, Povey conveyed his rights to certain purchasers, who, by a deed of settlement, of April, 1710, erected themselves into the society now familiar as the Sun Fire and Life Office.
It is not generally known that this institution printed, at first weekly and then quarterly, a work which has since proved a valuable addition to our historic literature. It was, indeed, a general custom with insurance companies to publish periodical papers in aid of their business, and was only another mode of that advertising which is so liberally practised by those of the present century.