The birth of modern insurance In England it was the great Fire of The immediate success of such join London in 1666 which had changed stock corporations was, however, dealt a public opinion. Hardly any of the significant blow as it led to speculation 70000 destroyed homes were insured. and subsequently ruin, as happened in the South sea bubble in 1720. The rational of the Enlightenment also a fortune out of rebuilding the city and tempted many investors to abuse the then turned to insuring the houses sound concepts of insurance to bet on His main motive was not solidarity but the most unlikely risks, such as the outcome business, pure and simple. His rational of wars, the danger of dying from excessiv approach and his experience as a banker consumption of gin, or the date of birth and mortgage provider made him realise of heirs to empires. The government that his insurance company needed to subsequently banned some forms of be built on a different financial foundation. insurance. a ban on reinsurance had and so. in 1681. he created the first already come into force in 1746 Still it seemed there was an inevitable Below Shareholding was to become essential logic in developing insurance further. The Phoenix emblem with the monument for modern insurance as it allowed the The economist Adam Smith praised it to the Great Fire of London in the background. separation of operating capital from risk as a rational invention and even a moral The Phoenix managers were the first to venture out beyond the borders of their own country capital and provided funds to expand obligation Not to insure oneself he with agencies. Along with the new joint-stock business into new lines and beyond the considered a"thoughtless rashness and marine insurance companies and Lloyd's of home market presumptuous contempt of the risk London, they were among the first to respond to the rapid increase in the interdependence of the global economy that had been und way since the middle of the eighteenth century. A DT NEW FIRE OTPICE12 Swiss Re A History of Insurance The birth of modern insurance The immediate success of such joint stock corporations was, however, dealt a significant blow as it led to speculation and subsequently ruin, as happened in the South Sea Bubble in 1720. The rational business ideas of the Enlightenment also tempted many investors to abuse the sound concepts of insurance to bet on the most unlikely risks, such as the outcome of wars, the danger of dying from excessive consumption of gin, or the date of birth of heirs to empires. The government subsequently banned some forms of insurance. A ban on reinsurance had already come into force in 1746. Still, it seemed there was an inevitable logic in developing insurance further. The economist Adam Smith praised it as a rational invention and even a moral obligation. Not to insure oneself he considered a “thoughtless rashness and presumptuous contempt of the risk”. Below: The Phoenix emblem with the Monument to the Great Fire of London in the background. The Phoenix managers were the first to venture out beyond the borders of their own country with agencies. Along with the new joint-stock marine insurance companies and Lloyd’s of London, they were among the first to respond to the rapid increase in the interdependence of the global economy that had been under way since the middle of the eighteenth century. In England it was the Great Fire of London in 1666 which had changed public opinion. Hardly any of the 70000 destroyed homes were insured. One Londoner, Nicholas Barbon, made a fortune out of rebuilding the city and then turned to insuring the houses. His main motive was not solidarity but business, pure and simple. His rational approach and his experience as a banker and mortgage provider made him realise that his insurance company needed to be built on a different financial foundation, and so, in 1681, he created the first known joint stock insurance company. Shareholding was to become essential for modern insurance as it allowed the separation of operating capital from risk capital and provided funds to expand business into new lines and beyond the home market