Introduction: the Nature and Study of Marine Insurance

  • A. B. Leonard
Part of the Palgrave Studies in the History of Finance Series book series (PSHF)


In the words of a twenty-first-century Lloyd’s underwriter, ‘insurance is the mortar between the bricks of commerce’. It provides contingent capital which is transformed into cash in times of crisis, allowing entrepreneurs and companies to trade with smaller quantities of conventional capital than are prudently necessary in their particular, perilous trading environments. In so doing, insurance transforms many of the uncertainties of capitalism into fixed costs.1 Further, it does so remarkably efficiently, a fact confirmed by its surprising resilience, and by the steadiness of its structure. As this volume shows, the basic instrument of premium-based marine insurance remained almost identical over the entire four-century period covered by the contributors, beginning about four hundred years before Lloyd’s emerged as a distinct, branded insurance market in 1769.2 Today underwriters there, elsewhere in London, and in the other marine insurance centres of the world trade in a financial product which continues basically unchanged from that which was used centuries before, right down to the wording of the contract, called a policy.


Policy Language Insurance Market Institutional Development Dispute Resolution Contract Enforcement 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. 1.
    Technically speaking, uncertainty cannot be insured; only risks can be transferred through insurance. See Knight, Frank: Risk, uncertainty and profit, Boston: Houghton Mifflin, 1921.Google Scholar
  2. 3.
    Emphasis in original. Leonard, A.B.: ‘Underwriting British trade to India and China, 1780–1835’, Historical Journal, vol. 55, no. 4 (2012), pp. 983–1006.CrossRefGoogle Scholar
  3. Bayly, C.A.: Rulers, townsmen and bazaars: north Indian society in the age of British expansion, 1770–1870, Cambridge: Cambridge University Press, 1983, p. 416; Bogatyreva, this volume; ‘Additional Supplement to the Calcutta Gazette’, Calcutta Gazette; or, Oriental Advertiser, 3 Mar. 1791.Google Scholar
  4. 4.
    For the seminal explanation of the idea of club goods, see Buchanan, James M.: ‘An economic theory of clubs’, Economica, New Series, vol. 32, no. 125 (1965), pp. 1–14.CrossRefGoogle Scholar
  5. 6.
    In translation. Braudel, Fernand: Afterthoughts on material civilization and capitalism (Ranum, P., trans.), Baltimore: Johns Hopkins University Press, 1977, pp. 49–56, 62–4.Google Scholar
  6. 7.
    Janeway, William: Doing capitalism in the innovation economy, Cambridge: Cambridge University Press, 2013, pp. 3–5.Google Scholar
  7. 8.
    Bindoff, F.T.: ‘The greatness of Antwerp’, in Elton, G.R. (ed.): New Cambridge Modern History, Vol. II: The Reformation, Cambridge: Cambridge University Press, 1965, p. 65.Google Scholar
  8. 9.
    For the analysis of insurance markets in an NIE framework, see, for example, Kingston, Christopher: ‘Marine insurance in Britain and America, 1720–1844: a comparative institutional analysis’, Journal of Economic History, vol. 67, no. 2 (2007), pp. 379–409.CrossRefGoogle Scholar
  9. Westall, Oliver: ‘Invisible, visible, and “direct” hands: an institutional interpretation of organisational structure and change in British general insurance’, Business History, vol. 39, no. 4 (1977), pp. 44–66.CrossRefGoogle Scholar
  10. 10.
    North, Douglass: Institutions, institutional change and economic performance. Cambridge: Cambridge University Press, 1990, p. 105.CrossRefGoogle Scholar
  11. 12.
    North, Douglass: ‘Institutions’, Journal of Economic Perspectives, vol. 5, no 1 (1991), p. 101.CrossRefGoogle Scholar
  12. 13.
    Greif, Avner: ‘Institutions and international trade: lessons from the commercial revolution’, American Economic Review, vol. 82, no. 2 (1992), p. 128.Google Scholar
  13. 14.
    See note 1. North, Douglass: ‘Institutions, transaction costs, and the rise of empires’, in Tracy, James (ed.): The political economy of merchant empires, Cambridge: Cambridge University Press, 1991, pp. 26–9.Google Scholar
  14. 16.
    McCusker, John J.: European bills of entry and marine lists: early commercial publications and the origins of the business press, Cambridge, MA: Harvard University Press, 1995, p. 53; North, Institutions, transaction costs, p. 40.Google Scholar
  15. 20.
    Milgrom, P.R.; North, D.C. and Weingast, B.R.: ‘The role of institutions in the revival of trade: the Law Merchant, private judges, and the Champagne fairs’, Economics and Politics, vol. 2, no. 1 (1990), pp. 1–23.CrossRefGoogle Scholar
  16. 21.
    Benson, Bruce L.: ‘The spontaneous evolution of commercial law’, Southern Economic Journal, vol. 55, no. 3 (1989), pp. 644–61.CrossRefGoogle Scholar
  17. 22.
    North, Institutions, p. 109; Grief borrowed the distinction from psychologists, citing Bellah, R.N. et al.: Habits of the heart, Berkley: University of California Press, 1985.Google Scholar
  18. Triandis, H.C.: ‘Cross-cultural studies of individualism and collectivism’, in Nebraska symposium on Motivation, Berman, J. (ed.), Lincoln: University of Nebraska Press, 1990.Google Scholar
  19. The collectivist and individualist division is succinctly expressed in Greif, Avner: ‘On the interrelations and economic implications of economic, social, political, and normative factors: reflections from two late medieval societies’, in Drobak, John and Nye, John (eds), The frontiers of the New Institutional Economics, London: Academic Press, 1997, pp. 57–94.Google Scholar
  20. For a criticism of Greif’s approach, see Ogilvie, S. and Edwards, J: ‘Contract enforcement, institutions, and social capital: the Maghribi traders reappraised’, Economic History Review, vol. 65, no. 2, (2012), pp. 421–44, and Greif’s reply.CrossRefGoogle Scholar
  21. 23.
    Greif, Interrelations and economic implications, pp. 71, 74–6; GHL CLC/B/148/A/001, Minutes of the Committee of Lloyd’s, December 1771-August 1804 (emphasis in original); Jones, W.J.: ‘Elizabethan marine insurance: the judicial undergrowth’, Business History, vol. 2, no. 2 (1970), p. 55.Google Scholar
  22. 24.
    A heavily edited selection of Claypoole’s letters has been published. Balderston, Marion (ed.): James Claypoole’s letter book, London and Philadelphia, 1681–1684, San Marino, CA: Huntington Library, 1967.Google Scholar
  23. Harris, Tim: Politics under the later Stuarts: party conflict in a divided society, 1660–1715, London: Longman, 1993, p. 179.Google Scholar

Copyright information

© A.B. Leonard 2016

Authors and Affiliations

  • A. B. Leonard

There are no affiliations available

Personalised recommendations