The Rise of Modern Insurance (17th – 18th Centuries)
- Lloyd’s of London (1688): The most significant event in the history of insurance occurred in London in the late 17th century. Edward Lloyd’s coffee house became a meeting place for shipowners, merchants, and underwriters to discuss maritime risks. Over time, this informal group of merchants and underwriters formed what would become Lloyd’s of London, one of the world’s most famous and influential insurance markets. They began offering insurance for ship cargoes and, later, for other types of property.Lloyd’s of London is credited with being the birthplace of modern insurance, pioneering the concept of risk-sharing, underwriting, and the pooling of resources to cover losses.
- First Fire Insurance Company (1666): In response to the Great Fire of London in 1666, which destroyed a large portion of the city, the first fire insurance company, The Fire Office, was established. The fire led to increased interest in insuring properties against the risk of fire, a growing concern as cities became more densely populated.
- Insurance in the U.S.: In the American colonies, marine insurance became the earliest form of insurance, particularly in places like New York and Philadelphia, where sea trade was vital. In 1752, Benjamin Franklin helped establish The Philadelphia Contributionship for the insurance of houses against fire. This was the first American fire insurance company, and it offered coverage to homeowners, laying the groundwork for property insurance in the U.S.
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