Insurance - the Beginnings
Many people have a false conception about insurance. When they buy an expensive electronic item such as a computer, often they do not hesitate to take out an extended warranty – most of which are over-priced – but give no thought to insuring the actual item along with all the other valuable pieces of equipment they have bought or own. If you would like to skip the history bit and go direct to keeping yourself and your goods safe, just click here or read on and learn some interesting historical facts.
Lloyds of London is the most famous insurance establishment in the world, and was started in a coffee shop in the City of London. This was in Edward Lloyd’s Coffee House around 1688 in Tower Street, London. While Lloyd was only the proprietor of the coffeehouse, his establishment was a popular place for sailors, merchants, and shipowners and Lloyd catered for them by providing reliable shipping news and a variety of other services, including saving their money. The shipping industry community frequented Lloyd’s Coffee House to discuss deals among themselves. Just after Christmas 1691, the coffee shop relocated to Lombard Street, where a traditional blue plaque commemorates its location. These merchants and ship-owners were very shrewd people and understood the law of averages, risk and capital. From these small beginnings Lloyd’s developed into a worldwide underwriting house that covers all types of risks from film star’s legs to jumbo jets. In the early days a tradition of ringing the Lutine Bell was rung when a ship was lost at sea. Briefly, this bell comes from an ancient French ship La Lutine that surrendered to the British in 1793. Traditionally it was been rung to herald important announcements – one stroke for bad news and two for good. However, the bell is no longer tolled as the result of a vessel becoming “overdue”. Today, the ringing of the Lutine bell is generally limited to ceremonial occasions, although in rare instances, exceptions are made. For example, the bell was rung following the terrorist attacks in the United States on September 11th, 2001. Today we insure because we want our assets (house, contents, jewelry, pets, cars, etc.) covered and secure in the case of any accident. The chances are that we will probably not need this cover, but we still need to know we will be secure if something dreadful should happen.
 Custom Search Perhaps the easiest way of explaining how the system works is a reference to how bookmakers operate. You take out cover (or a bet as in the case of bookmakers) because you think your house might be flooded, (or your horse is going to come in first) and the underwriter (or bookmaker) works on the premise that you will not be flooded (or that your horse will not be placed). They are taking the risk and that is why they make a charge for this service. Therefore the law of averages spawned insurance companies.
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