Annals, Anecdotes and Legends: A Chronicle of Life Assurance

by of the Bank of England John Francis

The first known fraud in assurance is one of the most singular in its annals. The reader must judge for himself of the circumstances attending it; but there is no doubt that others far more fearful in their results have since been practised.

About 1730, two persons resided in the then obscure suburbs of St. Giles’s, one of whom was a woman of about twenty, the other a man whose age would have allowed him to be the woman’s father, and who was generally understood to bear that relation. Their position hovered on the debatable ground between poverty and competence, or might even be characterised by the modern term of shabby genteel. They interfered with no one, and they encouraged no one to interfere with them. No specific personal description is recorded of them, beyond the fact that the man was tall and middle aged, bearing a semi-military aspect, and that the woman, though young and attractive in person, was apparently haughty and frigid in her manner. On a sudden, at night time, the latter was taken very ill. The man sought the wife of his nearest neighbour for assistance, informing her that his daughter had been seized with sudden and great pain at the heart. They returned together, and found her in the utmost apparent agony, shrinking from the approach of all, and dreading the slightest touch. The leech was sent for; but before he could arrive she seemed insensible, and he only entered the room in time to see her die. The father appeared in great distress, the doctor felt her pulse, placed his hand on her heart, shook his head as he intimated all was over, and went his way. The searchers came, for those birds of ill-omen were then the ordinary haunters of the death-bed, and the coffin with its contents was committed to the ground. Almost immediately after this the bereaved father claimed from the underwriters some money which was insured on his daughter’s life, left the locality, and the story was forgotten.

Not very long after, the neighbourhood of Queen Square, then a fashionable place, shook its head at the somewhat unequivocal connection which existed between one of the inmates of a house in that locality, and a lady who resided with him. The gentleman wore moustaches, and though not young, affected what was then known as the macaroni style. The lady accompanied him everywhere. The captain, for such was the almost indefinite title he assumed, was a visitor at Ranelagh, was an habitué of the Coffee-houses, and being an apparently wealthy person, riding good horses and keeping an attractive mistress, he attained a certain position among the mauvais sujets of the day. Like many others at that period, he was, or seemed to be, a dabbler in the funds, was frequently seen at Lloyd’s and in the Alley; lounged occasionally at Garraway’s; but appeared more particularly to affect the company of those who dealt in life assurances.

His house soon became a resort for the young and thoughtless, being one of those pleasant places where the past and the future were alike lost in the present; where cards were introduced with the wine, and where, if the young bloods of the day lost their money, they were repaid by a glance of more than ordinary warmth from the goddess of the place; and to which, if they won, they returned with renewed zest. One thing was noticed, they never won from the master of the house, and there is no doubt, a large portion of the current expenses was met by the money gambled away; but whether it were fairly or unfairly gained, is scarcely a doubtful question.

A stop was soon put to these amusements. The place was too remote from the former locality, the appearance of both characters was too much changed to be identified, or in these two might have been traced the strangers of that obscure suburb where as daughter, the woman was supposed to die, and as father, the man had wept and raved over her remains. And a similar scene was once more to be acted. The lady was taken as suddenly ill as before; the same spasms at the heart seemed to convulse her frame, and again the man hung over her in apparent agony. Physicians were sent for in haste; one only arrived in time to see her once more imitate the appearance of death, while the others, satisfied that life had fled, took their fees, “shook solemnly their powdered wigs,” and departed. This mystery, for it is evident there was some collusion or conspiracy, is partially solved when it is said, that many thousands were claimed and received by the gallant captain from various underwriters, merchants, and companies with whom he had assured the life of the lady.

But the hero of this tradition was a consummate actor; and though his career is unknown for a long period after this, yet it is highly probable that he carried out his nefarious projects in schemes which are difficult to trace. There is little doubt, however, that the soi-disant captain of Queen Square was one and the same person who, as a merchant, a few years later appeared daily on the commercial walks of Liverpool; where, deep in the mysteries of corn and cotton, a constant attender at church, a subscriber to local charities, and a giver of good dinners, he soon became much respected by those who dealt with him in business, or visited him in social life. The hospitalities of his house were gracefully dispensed by a lady who passed as his niece, and for a time nothing seemed to disturb the tenour of his way. At length it became whispered in the world of commerce, that his speculations were not so successful as usual; and a long series of misfortunes, as asserted by him, gave a sanction to the whisper. It soon became advisable for him to borrow money, and this he could only do on the security of property belonging to his niece. To do so it was necessary to insure their lives for about 2000l. This was easy enough, as Liverpool, no less than London, was ready to assure anything which promised profit, and as the affair was regular, no one hesitated. A certain amount of secresy was requisite for the sake of his credit; and availing himself of this, he assured on the life of the niece 2000l. with, at any rate, ten different merchants and underwriters in London and elsewhere. The game was once more in his own hands, and the same play was once more acted. The lady was taken ill, the doctor was called in and found her suffering from convulsions. He administered a specific and retired. In the night he was again hastily summoned, but arrived too late. The patient was declared to be beyond his skill; and the next morning it became known to all Liverpool that she had died suddenly. A decorous grief was evinced by the chief mourner. There was no haste made in forwarding the funeral; the lady lay almost in state, so numerous were the friends who called to see the last of her they had visited; the searchers did their hideous office gently, for they were, probably, largely bribed; the physician certified she had died of a complaint he could scarcely name, and the grave received the coffin. The merchant retained his position in Liverpool, and bore himself with a decent dignity; made no immediate application for the money, scarcely even alluding to the assurances which were due, and when they were named, exhibited an appearance of almost apathetic indifference. He had, however, selected his victims with skill. They were safe men, and from them he duly received the money which was assured on the life of the niece.

From this period he seemed to decline in health, expressed a loathing for the place where he had once been so happy; change of air was prescribed, and he left the men whom he had deceived, chuckling at the success of his infamous scheme.

It need not be repeated, that the poverty-stricken gentleman of the suburbs, the gambling captain of Queen Square, and the merchant of Liverpool, were identical. That so successful a series of frauds was practised appears wonderful at the present day; but that the woman either possessed that power of simulating death, of which we read occasional cases in the remarkable records of various times, or that the physicians were deceived or bribed, is certain. There is no other way of accounting for the success of a scheme which dipped so largely into the pockets of the underwriters.

The next movement in the scientific annals of life assurance was made by Thomas Simpson, a natural and self-taught mathematician, whose life prior to throwing himself on the world of London for support had been somewhat of a vagrant one. He had cast rustic nativities, told fortunes, advanced courtships, and occasionally varied his vagabondism by undertaking to raise the devil, an attempt in which he was so successful, that he sent his pupil mad, and was obliged himself to leave the village. In 1740, he produced a volume “On the Nature and the Laws of Chance;” in 1742, this was followed by his “Doctrine of Annuities and Reversions,” deduced from general and evident principles, with tables showing the value of joint and single lives. In 1752, he made an additional contribution to the statistics of annuities, as he published in his “Select Exercises” a supplement, wherein he gave new tables of the values of annuities on two joint lives, and on the survivor of two lives, more copious than hitherto. He first attempted to compute the value of joint lives; but as these were still taken from the London Bills of Mortality, they were by no means fit for general acceptance. He treated his subject, however, more broadly and clearly than it had been previously treated, giving some of the best tables of the values of life annuities, which were published for many years. Though the manner in which they might be computed had been shown by Dr. Halley, it is to the self-taught Simpson we are indebted for their practical application.

In 1760, M. Buffon published a further contribution to the statistics of assurance, in a table of the probabilities of life, estimated from the mortality bills of three parishes in Paris, and two country parishes in its neighbourhood.