On Friday evening, like most of the country, I was glued to the Television watching the opening ceremony of the Olympics. I think the general opinion is that it was excellent. I very much enjoyed the moving portrayal of our nation as it developed from an agrarian society of green and pleasant land, through to the industrial revolution and up until the modern day with the birth of the internet which apparently we invented.
Of course, I will have to take issue with Mr Boyle for completely overlooking the impact that insurance has played in the shaping of our country as we know it today. Property Insurance in particular has played a vital part in the development and protection of our country. (Even Brunel had to have insurance).
Insurance has often arisen out of necessity (it being the mother of invention of course) Our pioneering nature has always been to seek solutions for problems and perhaps this was first demonstrated after the great fire of London in 1666, which I submit marked the beginning of our modern age.
Before the Great Fire of London in 1666, home and commercial property insurance was non-existent, the only assistance provided if you were unlucky enough to suffer a loss (which was quite high, due to construction methods, proximity of buildings to each other and the complete lack of anything remotely resembling health & safety) was that provided by either the church or private local collections. In some circumstances, compensation could be obtained from craftsman’s guilds, but basically, if you had a fire, you could be facing financial ruin.
Until this time, fires were sporadic and localised; there hadn’t been an incident of a major loss that has so impacted on the lives of all the inhabitants of a location. The Fire of London did a good deal to change the perception of property insurance as it showed how particularly vulnerable a major city was to a catastrophe.
Heads were scratched and soon, as a direct result of this incident: the first fire insurance companies started to appear with one of the very first “ The Fire Office” changing Its name to become the historic “ Phoenix Insurance” surely there has never been a more aptly named insurance company.
These first fire insurance companies operated their own Fire Brigades and home insurance policyholders, as well as commercial building owners, were issued with a metal plaque which was affixed to the outside of the insured building to help the fire brigade locate a property where they could put out a fire.. No Plaque, no Fire Brigade.
OK, cue Satanic Mills.
As industrialisation took a strong hold in the United Kingdom, so did the need for more complex forms of fire insurance. Policies developed covering not only the buildings of residential homes & commercial concerns but were extended to include cover for contents and stock contained within the buildings themselves.
In the early days, insurance companies were in direct competition with each other and there was very little science applied to the rating and premiums collected. Scant regard was taken in to consideration as to the construction of a property or what exactly it was being used for; also, the company fire brigades acted independently of each other, and often in competition, there were frequent stories of brigades getting in the way of each other.
Out of this maelstrom, insurance evolved, again out of necessity following another devastating fire in London. By 1865, the Metropolitan Fire Brigade Act saw the first Municipal Fire Brigade set up, in essence to provide a benefit to all home and business owners, not just those fortunate enough to be able to pay insurance premiums.
Throughout the time since the industrial revolution, insurance has enabled homeowners and business alike to be able to transfer risk to an insurance company thus providing them with a degree of certainty that in the event of a loss occurring, their lives and businesses should be able to continue without the prospect of financial ruin. It must also be remembered that the early insurance companies were covering risks that by modern standards would seem unacceptable, safety features to help prevent a loss have improved immeasurably in recent years.
Property & home insurance has also developed enormously in the scope of the cover and perils provided, we now have a standard set of insurance perils, offered by most insurance companies, this enables finance to be secured to buy a property on a mortgage bringing home ownership within reach of large numbers of the population (Ok, so things have gone a bit skew-wiff lately but we’ll ignore that)
Insurance has always responded to needs and has changed accordingly to meet these needs, developing new products often as variants of old, in the last few years, we have seen a plethora of buy to let insurance policies come on to the market enabling many people to become landlords for the first time. What next for our pioneering industry, well hopefully it will be a favourable response to the need to supply suitable flood insurance for owners of at risk property thus continuing a long tradition of enabling our country to stay protected through changing times