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Since its invention in Italy in the fourteenth century, marine insurance has provided merchants with capital protection in times of crisis, thus oiling the gears of trade and commerce. With a focus on customs, laws, and organisational structures, this book reveals the Italian origins of marine insurance, and tracks the spread of underwriting practices and institutions in Europe and America through the early modern era. With contributions from eleven leading researchers from seven countries, the book examines key institutional developments in the history of marine insurance. The authors discuss its invention in Italy, and its evolution from private to corporate structures, assessing the causes and impacts of various state interventions. Amsterdam and Antwerp are analysed as one-time key centres of underwriting, as is the emergence and maturity of marine insurance in London. The book evaluates an experiment in corporate underwriting in Cadiz, and the development of insurance institutions in the United States, before applying the metrics of underwriting to discuss commerce raiding in the Atlantic up to the nineteenth century.



1. Introduction: the Nature and Study of Marine Insurance

In the words of a twenty-first-century Lloyd’s underwriter, ‘insurance is the mortar between the bricks of commerce’. It provides contingent capital which is transformed into cash in times of crisis, allowing entrepreneurs and companies to trade with smaller quantities of conventional capital than are prudently necessary in their particular, perilous trading environments. In so doing, insurance transforms many of the uncertainties of capitalism into fixed costs.1 Further, it does so remarkably efficiently, a fact confirmed by its surprising resilience, and by the steadiness of its structure. As this volume shows, the basic instrument of premium-based marine insurance remained almost identical over the entire four-century period covered by the contributors, beginning about four hundred years before Lloyd’s emerged as a distinct, branded insurance market in 1769.2 Today underwriters there, elsewhere in London, and in the other marine insurance centres of the world trade in a financial product which continues basically unchanged from that which was used centuries before, right down to the wording of the contract, called a policy.
A. B. Leonard

2. Genoa, 1340–1620: Early Development of Marine Insurance

Marine insurance is probably the oldest financial instrument intended solely to protect against the impact of fortuitous commercial losses. Its origins and early development have been debated by scholars for more than a century. Some have argued that the ancient Phoenicians and Greeks protected their maritime enterprises through systems of loans with a risk-transfer element. More ambiguous contracts which transferred the risk of oceangoing trade have also been identified. From very early on in the development of these instruments, states paid attention to such arrangements. Among the earliest evidence of state interest in such contracts is a Roman edict of the year 533, during the reign of Justinian.1 Conversely, other authoritative scholars argue that insurance in its modern form was unknown in the ancient world.2
Luisa Piccinno

3. Italy 1500–1800: Cooperation and Competition

A new stage in the international development of marine insurance was spurred by the opening of intercontinental trade routes and the gradual shift of the hub of international trade from the Mediterranean to the Atlantic. Having appeared as an autonomous legal instrument in the maritime cities of the Tyrrhenian area (Pisa, Genoa, Palermo), insurance by the late middle ages had spread to most of the Mediterranean, both in the direction of Catalonia (Barcelona, Maiorca, Valencia) and of the Christian Levant (Ragusa), as colonies of Italian merchants transmitted the technical and juridical knowledge developed in their cities to local markets.1
Andrea Addobbati

4. Antwerp 1490–1590: Insurance and Speculation

Many Antwerp merchants began to use marine premium insurance in the years between about 1520 and 1560. Foreign traders who had migrated to the city following the decline of Bruges, from around 1490, had underwritten and purchased insurance, and it began to displace other risk-transfer practices from about 1520. In the 1530s and 1540s supply was closely connected to the speculative atmosphere of the Antwerp bourse, but by the 1550s marine insurance was widely practised, and Antwerp had become a leading European insurance centre. However, the swift growth in popularity of insuring, and particularly of underwriting, were based on slight foundations.1
Dave De ruysscher

5. Amsterdam 1585–1790: Emergence, Dominance, and Decline

Amsterdam had acquired the reputation as Europe’s dominant insurance centre long before Le Moine de L’Espine’s volume The Commerce of Amsterdam first appeared in 1696. The city’s insurance industry emerged in the third quarter of the sixteenth century, quickly developed into a thriving business, and held onto its prominent position for more than a century. The beginning of the end came in the eighteenth century, and was only relative at first; it did not become abundantly clear until the nineteenth century that Amsterdam had lost its position of leadership, and was in fact reduced to a second-rate insurance market. This story of the emergence, maturity, and eventual decline of a market is inevitably rooted in the interactions of the individuals and groups involved, and the institutional framework which governed their transactions.
Sabine C. P. J. Go

6. England 1523–1601: The Beginnings of Marine Insurance

Extant information about early English marine insurance follows a discontinuous trend. It is remarkably scarce until the mid-sixteenth century, when it increases substantially in the space of a few years, only to fade again after a few decades, and return to growth towards the end of the seventeenth century. After that, plenty of records remain. However, this misbehaving trend does not affect our knowledge as much as would appear to be the case at first sight. The reason lies in the unparalleled continuity in English insurance policies, which remained nearly identical from the 1570s to the policy model prescribed in the Marine Insurance Act of 1906 (First Schedule). This makes up, at least in part, for the gaps in the available evidence during the seventeenth century.
Guido Rossi

7. London 1426–1601: Marine Insurance and the Law Merchant

Prior to a series of merchant-driven state interventions in the 1570s, the primary institutions of contract enforcement for insurance buyers and sellers in London were the merchant community itself, typically embodied in the city’s Lord Mayor and Aldermen, and the merchants’ own body of governing rules, part of the Law Merchant. In 1781 the underwriter John Weskett published his encyclopaedic Complete digest of theory, laws and practise of insurance, which describes the Law Merchant as follows:1
The affairs of commerce are regulated by a law of their own, called the Law Merchant, or Lex Mercatoria, which all nations agree in and take notice of: and in particular it is held to be a part of the law of England, which decides the causes of merchants by the general rules which obtain in all commercial countries.2
A. B. Leonard

8. England 1660–1720: Corporate or Private?

Speaking to the House of Commons in 1601 in support of An Act Conc’ninge matters of Assurances, amongste Merchantes, Francis Bacon outlined the fundamental importance of marine insurance to trade, and thus to the nation. With his usual eloquence, he explained to MPs how insurance means that with the ‘loss or perishing of any ship, there fol- loweth not the undoing of any man, but the loss lighter rather easily upon many, than heavily upon fewe’. Bacon did not expand on the nature of the many who were to grant merchants, in exchange for ‘some consideration of money… assurance made of their goods, merchandises, ships and things adventured’. He expressed no opinion as to whether insurance would best be provided by individuals (as it was almost exclusively when he spoke), or groups of individuals associated into companies (as it was to become).1 Adam Smith was more certain. In Wealth of Nations he asserted that marine insurance is one of the very few commercial activities for which joint-stock companies constitute an appropriate form of organisation.2 In the many decades between Bacon’s silence and Smith’s pronouncement, the question of private versus corporate underwriting was addressed repeatedly. This chapter examines the development of corporate forms of marine insurance underwriting in Britain over the centuries, culminating in the first chartering of British joint-stock marine insurance companies in June 1720.
Anastasia Bogatyreva

9. America 1720–1820: War and Organisation

America’s economy grew rapidly throughout the eighteenth century, with expanding settlement of the interior, growth in economic output, and a doubling of population approximately every 25 years. Overseas trade played a vital role. Furs, fish, ship masts, whale oil, tobacco, rice, and indigo were exported to Britain and Ireland in exchange for a wide range of manufactured goods and textiles. A negative trade balance with Britain was compensated for in part by the export of fish, grain, flour, salted meat, and livestock to the Caribbean islands in exchange for sugar, rum, and molasses, and by exports to southern Europe. The colonies, well-endowed with timber for shipbuilding, also earned a considerable amount from the sale of vessels and the provision of freight services.1
Christopher Kingston

10. Cadiz 1780–1808: A Corporate Experiment

Spain’s colonial trade had long been centred on Andalusian Seville and Cadiz, yet the cities’ insurance markets remained undeveloped until the final decades of the eighteenth century. This chapter focuses on the rapid rise and equally sudden demise of the insurance business in Cadiz, from 1780 to 1808. A flurry of mercantile partnerships was established to underwrite the commercial ventures of Spanish traders in the 1780s and 1790s. The escalating insurance losses brought about by the Wars of the French Revolution and Napoleon, however, caused the bankruptcy of most of these fledgling companies. By the early years of the nineteenth century this new financial sector had largely disappeared.
Jeremy Baskes

11. Britain and America 1650–1850: Harmonising Government and Commerce

Claims that merchants were enemies of commerce raiding (piracy, privateering, and wrecking) are based on assumptions that such activity was harmful to trade, and that the victims of maritime predation would take the lead in advocating and lobbying for its suppression. Historians indeed point to convoys — groups of merchant ships travelling with protective naval escorts — as an early example of successful lobbying by commercial interest groups for government action to protect merchant vessels from maritime predation, indicating a shift in public and mercantile attitudes and beliefs about piracy. However, the practice of insuring ships and cargoes against risks at sea insulated merchants and investors from much of the damage caused by armed commerce, while allowing them to continue to reap the benefits such activities offered.1
Guy Chet

12. From Genoa to London: the Places of Insurance in Europe

Two sequences of commercial centres existed in late medieval Europe. One comprised international financial centres such as Venice, to which people came from many places to transact financial business. The other included places such as Florence, from which merchants and bankers spread out and transacted business in many other places, but where most commerce was local, and most of the participants were natives.1
Peter Spufford


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