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This chapter traces the history of the Japanese insurance industry. Japan adopted an isolationist policy in 1639, which established national seclusion, disrupted trade, and reduced the opportunities for the marine insurance industry. Prior to isolation, a primitive form of marine insurance called nagegane had existed, brought by the Portuguese at the beginning of the seventeenth century. Historians have discovered that traders from Hakata and Sakai provided financing that included marine accident coverage for ship owners, merchants, and tradesmen. As shipping businesses developed along the coasts, methods for handling marine accidents were systematized and so-called marine contracts (kaijou ukeoi) began to be conducted by shipping agents in these areas. Marine contracts worked by attaching a risk fee onto shipping charges, while damages during transport on entrusted cargo saw the principal on the cargo paid to the consigning merchant. Upon entering a marine contract, a marine contract note (kaijou ukeoi tegata) fulfilling the roles of a receiving note and a marine insurance policy was issued. This domestic risk hedging method co-existed alongside modern marine insurance for international trade until the beginning of the Meiji period in 1868.

This chapter describes international expansion in the UK insurance industry. At the end of the seventeenth century, Britain underwent a dual political and financial revolution that helped lay the foundations for its future economic power. The overthrow of the Stuart monarchy in 1688 again furthered the security of private property rights and the hegemony of parliament. The financial revolution created central banks in England and Scotland, a stock market, and a publicly traded national debt. In addition, London became the world's largest fire insurance market and a leading centre of marine insurance. A century later, with the commercial and industrial economy expanding rapidly, London also provided the world's first exporters of fire and life insurance. By the middle of the nineteenth century, as Britain became the greatest trading nation on earth, its insurance industry approached global domination.

This chapter traces the history of the Russian insurance industry. The pioneers of insurance in Russia were the Dutch, who during the reign of Peter the Great (1682–1725) became the major agents of Russia's foreign trade. Marine and marine cargo insurance were also provided in Russia by foreign insurance companies operating through agents in the principal Russian ports. From the eighteenth to the first half of the nineteenth century, insurance in Russia, with its under-developed entrepreneurial sector, was a state initiative. The official state monopoly was replaced by a short-lived oligopoly of private fire insurance companies (it existed until 1847). The first marine and life insurance institutions had emerged by that time, but it was not until the second half of the nineteenth century that a real free market in insurance began to take hold in Russia.

This chapter presents an overview of the history of modern insurance in Europe. The actual birth of modern insurance can be dated back to the middle of the eighteenth century when industrialization in the United Kingdom was getting underway. At the time, share-based, well capitalized insurance companies became widespread in marine and fire insurance. Calculating risk on the basis of statistics began with the probability calculation approach used in life insurance, which was applied to the other lines of insurance from the mid-nineteenth century onwards and became the real hallmark of the actuarial technique involving provisions against contingencies used by insurance companies.

The war nearly destroyed a century of painstaking effort among British firms in Hong Kong and China. The colony's insurance sector was not spared the havoc. In face of imminent invasion, foreign insurers made plans to suspend business and retreat from Hong Kong. In January 1941, Union Insurance moved its headquarters from Hong Kong to Sydney, as well as Canton Insurance. The relocation decision had been approved by the board of directors only a year before. In hindsight, the board's chairman, J. Dickson Leach, affirmed that this decision helped save the company. Tokio Marine & Fire Insurance Company, once Union's primary source of re-insurance business from Japan, stepped up as agent for the company in Hong Kong. The insurance sector ground to a halt. In August 1945, the Japanese surrendered and the war ended. Hong Kong's postwar economy recovered, and businesses flourished. This ushered in a new phase in the development of the insurance industry.

This chapter traces the history of the French insurance industry. The economic development of insurance in France came more slowly and at a later date than in England. The first marine insurance company was established in 1650 and came at a time when French commercial, maritime, and colonial expansion was predominant. With the beginnings of the Liberal Empire — the free trade agreement with England was signed in 1860 — companies had been encouraged by the general trend to develop their activities abroad. But it took until the late nineteenth century for French insurance companies to establish themselves more firmly in Britain, Austria-Hungary, Germany, Belgium, Egypt, Spain, Greece, the Netherlands, Italy, the Grand Duchy of Luxembourg, Portugal, Russia, Turkey, Sweden and Norway, and in Morocco.

This chapter investigates the Mitsubishi Corporation’s risk management business in pre-war Japan. Mitsubishi self-insured from 1898 following the withdrawal of a special discount provided by its main insurance supplier, the Tokio Marine. In 1917, each department within Mitsubishi was reorganized into independent stock companies, but legislation prevented Mitsubishi from underwriting the risks of these subsidiaries. As a solution, despite opposition from the Tokio Marine, Mitsubishi established a captive insurer, the Mitsubishi Marine and Fire Insurance Company, in order to pool the risks faced by its subsidiaries. In consequence, antagonism grew between the two insurance companies, but this was eventually resolved with an exchange of top executives. Mitsubishi then abandoned this early experiment in captive insurance. Mitsubishi provides an interesting example of an industrial corporation managing risk through changes in the organizational vehicle by which its insurance cover was supplied.

This chapter traces the history of the Italian insurance industry. The fall of the Italian economy from its central position in the sixteenth century relegated it from the areas of strongest economic growth in Europe. This contrasted strongly with the innovative capacity of both the Italian insurance and credit markets during their period of primacy in the late Middle Ages and the early Renaissance. Italy was also an exception in the international arena. Early forms of insurance and associated instruments had already been developed in Imperial Rome. Subsequently, the first marine insurance and reinsurance contracts were drawn up in Genoa in the mid-fourteenth century. However, Italy's supremacy in this area vanished rapidly during the country's economic marginalization after the sixteenth century. In the early decades of the nineteenth century, insurance companies began to be established in various cities that triggered a slow and gradual convergence of the Italian insurance market with the more dynamic French, German, and Austrian markets.

This chapter traces the history of the German insurance industry. It was only in the mid-nineteenth century that a German insurance industry can properly be spoken of, one which demonstrated sound technical skills, appropriate support institutions, and real growth potential. Until this time, there were only a few pioneering insurance enterprises active, which tested the viability of the market, and sought reliable ways to organize and do business. They met with mixed success, but most were open to foreign ideas and some orientated their business for cross-border activity. Indeed, by the time it took-off in the mid-nineteenth century, the industry already boasted international linkages established through numerous channels. The century's three major lines of insurance business — fire, marine, and life — owed their successful rise largely to international cooperation agreements and input from abroad. Academics and practitioners from various countries worked closely together in preparing start-ups, while newly founded companies looked to foreign experts for advice or copied the underwriting practices of successful industry pioneers from abroad.

Before the official declaration of an independent Argentine Republic on the 9 July 1816, the Kingdom of Spain had organized its territory in South America as a commercial monopoly, with the objective of earning much needed fiscal revenues. Marine insurance contracts relating to these early trading activities tended to be managed from the Iberian Peninsula. The European powers tended not to export their own insurance models to these new markets with the goal of founding domestic operations. Instead they were primarily interested in insurance as a means of securing trade routes and safeguarding the interests of their own citizens and trading companies, to whom they would often be closely related. In particular, life insurance played a minor role and would have to largely await the development of local, domestic insurers in the twentieth century. There was, however, early recognition of the potential role of insurance from those trying to create a stable and independent Argentine state. This chapter traces the history of the development of Argentinian insurance industry. It discusses the shaping of a national insurance market from 1890–1936; nationalization and the drive for growth from 1937–1976; and opening-up from 1976–2010.

From the eighteenth century British marine insurance developed via a wide range of organizational forms, including individual and syndicated underwriters, mutual associations, chartered corporations, unchartered stock companies, and protection and indemnity clubs. At times the issue of what was the best vehicle to deliver marine insurance became a hotly debated topic. This chapter explores why these different organizational forms emerged and what were the relative advantages and disadvantages that explain their subsequent performance. It points to the importance of historical contingency, such as specific financial and political circumstances, to the search to control asymmetric information problems, to the role of specialization, local knowledge, and niche markets, and to the entrepreneurial qualities of individual managers and promoters.

This chapter examines Nathaniel Bowditch’s assumption of a leading role in Salem’s economic and social elite, and the business conduct, social activities, and religious and partisan loyalties elite membership entailed. Following a final Pacific trading voyage, in 1804 Bowditch assumed the helm of the Essex Fire and Marine Insurance Company (EFM). Though one of a new breed of financial institutions and business corporations in the early republic, under Bowditch, the EFM followed longstanding informal and personal modes of business conduct. In his work with the East India Marine Society logbooks and museum collections, however, Bowditch introduced standardized, impersonal information systems that heralded his later approach to institutions. Salem’s elite social circles embraced Bowditch, but not without noting his lack of a collegiate education and the social polish it ostensibly imparted. Bowditch’s church affiliation and Federalist party activities, on the other hand, anchored him securely in elite circles.

This chapter examines the quotation claiming that Jews invented marine insurance and bills of exchange, which can be read from a compilation of maritime laws assembled with commentary by a provincial French lawyer, Étienne Cleirac, published in Bordeaux under the title Us et coustumes de la mer (Usages and Customs of the Sea). By adding bills of exchange to his commentary on marine insurance, Cleirac paired two credit contracts that by the mid-seventeenth century had become indispensable to long-distance trade and were handled by merchants of all sorts. By this time, marine insurance was no longer considered usurious. In contrast, bills of exchange continued to ignite fierce debates over usury. The ease with which bills of exchange could be passed from one person to another generated the erroneous but indelible impression that they were like paper money. However, unlike banknotes, they were not fully negotiable, nor were payers obliged to accept them.

This chapter looks at the circumstances in which Étienne Cleirac composed his writings. Whether Cleirac coined or merely repeated it, the legend of the Jewish invention of marine insurance and bills of exchange was his attempt at making sense of the changes in the legal, political, and social orders that the expansion of overseas commerce set in motion. Cleirac's life unfolded in a city where Jews were indistinguishable from local and foreign Christian merchants involved in long-distance trade, many of whom no longer belonged to a guild. It would not have surprised anyone in seventeenth-century France that New Christians, Catholics, and Protestants signed each other's bills of exchange and underwrote each other's marine insurance policies. Until 1723, however, crypto-Judaism was an institutionalized reality in Bordeaux. As such, the specter of crypto-Judaism infuses Cleirac's narrative of the origins of marine insurance and bills of exchange.

This chapter analyses the imputation of knowledge from agent to principal in pre-contractual disclosure in business insurance under §§ 3 and 4, Insurance Act 2015. It is emphasized that imputation under the old regime, the Marine Insurance Act 1906, §§ 18 and 19, applied to a relatively narrow class of agents. The duty of fair presentation under Insurance Act 2015, §§ 3 and 4, in so far as it applies to insurance agents, is identified. The new regime is criticized as conceptually, systemically, and practically flawed: conceptually, because the law no longer rests on the agency law reasoning which provided a rationale for imputation; systemically, because the new form of imputation has no theoretical framework; and practically, because it imposes heavier duties on insured and insured’s agent, contrary to the stated aim of the new legislation, i.e. rebalancing obligations in the insurer–insured relationship in favour of the insured.

Insurance makes use of the law of large numbers to mitigate the effects of risks on individuals by allowing them to be shared collectively. Early insurance arrangements arose as friendly societies and mutual insurance companies. Marine insurance has a long history and remains a major insurance market. Fire insurance provides compensation in the face of a capricious and frightening risk, but also invites fraudulent claims. Increasing amounts of information provide challenges for insurance underwriting: can there be too much information? The principle of insurance is that of averaging out of independent risks, but when risks are not independent, as may be the case when it comes to climate change, is there still any role for insurance?

Chapter 4 of The Overseas Trade of British America explores key features of the fast-growing commercial economy of British America in an era of light regulation and salutary neglect. Buffeted by vicious Atlantic pirates and financial crisis at home, colonial trade continued to grow after the Treaty of Utrecht (1713) ended British participation in the War of the Spanish Succession. Discussion touches on a wide array of topics: geography, the structure of colonial commerce, and regional economic interdependence; money (including bills of exchange), capital, credit, and debt; marine insurance and the management of risk — on land and at sea; multi-lateral trading patterns, the coasting trade, and inter-island commerce; the rise of the French West Indies and their dependence on supplies from British North America; the corrosive rivalry between British North America and the British West Indies that led to Parliament’s Molasses Act of 1733; and intimate links between colonial trade and transatlantic migration — including the large-scale movement of white indentured servants and enslaved Africans. Here, a dark shadow falls across the topic: the complicity of the overseas trade of British America in the evil of the Atlantic slave trade and Atlantic slavery.

This chapter discusses Étienne Cleirac's commentary on the first article of the Guidon de la mer (The Standard of the Sea). In brief, he says that the Jews expelled from France invented marine insurance policies and bills of exchange in order to salvage their assets when fleeing to “Lombardy,” that is, to northern and central Italy. From there, Italian refugees exported the newly invented financial instruments north of the Alps, where bankers and moneylenders were called “Lombards,” a name eventually given to a public square in Amsterdam. Cleirac's merging of these spaces has the effect of tracing a direct line between fourteenth-century Lombards and seventeenth-century Amsterdam and makes pawnbroking appear contiguous with the most sophisticated forms of financial credit developed during the sixteenth century. This chronological compression is crucial to Cleirac's rhetorical strategy of making medieval Jewish moneylenders, the object of scorn and prejudice, interchangeable with the international merchant-bankers of the seventeenth century.

Until recently, little was known about the Canton junk trade to Southeast Asia. It has been long known that Hong merchants were involved with the junks, but with few specific details. It was thought that the junk trade in Canton had declined by the late eighteenth century - to the point that it was insignificant. We now know differently. This chapter presents much new information about the 30 or more junks that were based in Canton and sailed to Southeast Asia each year. It analyzes 280 junk import cargos, and the relationship some of those products had to the foreign export trade. Estimates are provided of the volume and value of the Canton junk trade in relationship to the total trade of the port.