Insurance, very important. If the American experience doesn't interest you the Roman one might. See after the jump.
From Lapham's Quarterly, January 3:
Insurance became a matter of concern for the American states from the moment they declared their independence. In order to fight a war with Britain, they needed expensive war matériel, which had to be shipped to them from overseas under risky conditions and could only be insured at great cost. In the spring of 1777, American newspapers reported with relief that French merchants were willing to ship goods to America at their own risk, in spite of insurance rates reaching 20 percent. By contrast, when Arthur Lee, Benjamin Franklin, and Silas Deane made commercial overtures to Frederick I of Prussia, a reluctant minister stalled the proceedings by inquiring about insurance rates. Lee attempted to convince Prussia that Amsterdam underwriters would insure shipments to America at the extravagant rate of 40 percent, a rate so “infinitely beyond the risk” that the underwriters would find it an “irresistible temptation.” The overture to Prussia ultimately fizzled, but these diplomatic exchanges demonstrate that insurance networks were already adapting to changing political conditions, shifting, alongside Americans’ commercial routes, away from Britain and toward France and Amsterdam.
American insurance offices did not hold charters from their states, but they were nonetheless carefully organized local institutions within which collective obligations were managed in a variety of ways. In New York City, the members of the New-York Insurance Office advertised the hours at which they sat at the merchants’ coffeehouse to accept applications for insurance. These members did not bother to announce their names, however; New York City merchants already knew who they were, and any newcomers could easily show up and find out. In Boston, John Hurd advertised his brokerage office under his name alone, but locals and his correspondents would have known that his office was funded by a fixed group of twenty underwriters, whose names were printed on the brokerage’s policies. In New Haven, Wethersfield merchant Barnabas Deane announced the opening of an insurance office that was practically a patriot family affair: its four underwriters were Silas’ stepson Joseph Webb Jr., the privateering brothers Samuel and John Broome, and Samuel’s brother-in-law Jeremiah Platt, a privateer based in Hartford.
It was not uncommon for privateers to underwrite insurance policies. It was also not uncommon for privateers to purchase insurance policies. To do so was only logical. Americans who received privateering licenses from the Continental Congress were entering into profit-sharing arrangements with their new government: if they captured British vessels, they owed it two-thirds of their winnings. But the American privateers sailed at their own risk: if their vessels were lost or damaged, they shouldered the cost alone—unless, that is, they took out insurance policies. When they did this, they reduced their own risks while making the American insurance sector a key part of the political economy of the independence war.
The wartime privateering economy forced compromises onto the American states from the moment they came into existence. Privateering, of course, had its upsides. It embarrassed Britain and disrupted its commerce, and it kept much of New England economically afloat through the war’s most difficult years. On the other hand, issuing a privateering license to a merchant meant allowing him to maintain his focus on his own private gain and to lure skilled seamen away from naval service. Marine underwriting, by diluting the risks of privateering, heightened these dilemmas for the new American governments. In the process, it strengthened the insurance offices, reinforcing their roles as nodes of capital, expertise, and news apart from the nascent state.
American brokers and underwriters had to manage the risk of political opprobrium during the Revolutionary War. Although American brokerage offices were too small to become main targets of public condemnation, they had visibly proliferated during the war, and they were known to be controlled by America’s wealthier merchants—that is, by people already subject to charges of placing profit over loyalty by price gouging, privateering, and trading with the enemy....
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