Origin of Insurance
Mr. G. F. Smith, in a paper read to the Institute of Actuaries, is of opinion that the earliest direct mention of Marine Insurance is in an ordinance of the City of Barcelona, of the year 1433, in which it is ordered that no vessel should be insured for more than three-quarters of its value; that no merchandise belonging to foreigners should be insured at Barcelona, unless freighted on board a ship belonging to the King of Arragon; and that merchandise belonging to Arragonese subjects on board vessels belonging to other countries should only be insured for half its value. It appears most probable that the inventors of Marine Insurance were the Italians, who, as is well known, were the leading commercial nation in the fourteenth and fifteenth centuries. It was in Venice that the first Bank was established, and that a funded debt, transferable from hand to hand, was first introduced. Bills of exchange, if not invented in Italy, were used extensively by the Lombard merchants and money-dealers; and book-keeping by double entry is of Italian origin; as is also the phrase, “Policy of Assurance.”
After the Great Fire, Assurance Offices were set up. One of these is described, in Phillips’s World of Words, under the heading “Phœnix Insurance Office, the first office that was set up in London for the insuring of houses from accidents by fire, so called from its emblem or device: the rate for ensuring 100 pounds on a brick house, is 6 shillings for 1 year, 12 shillings for 2 years, 15 shillings for 3 years, 19 shillings and sixpence for four years, 1 pound 10 shillings for seven years, and 2 pounds 1 shilling for eleven years: the number of houses so insured since Anno Dom. 1681 is ten thousand.” A second is mentioned as the “Friendly Society, one of the offices settled in London for the insuring of houses from casualties by fire: the reward or consideration-money paid for insuring to the value of 100 pounds in this office, is 1 shilling 4 pence per annum for seven years. The device of it is a sheaf of arrows, and the number of houses insured since A.D. 1684 is 12,500.”