How Insurance Has Played a Major Role in American Prosperity: 1700 Lloyds of London

Most consumers see insurance as a complex system made up of interconnecting and defining variables that produce a rate...hardly not.  It is viewed more like a bunch of mumbo-jumbo that only makes it more confusing if explained in greater detail.   To easily explain how insurance originated in the first place, just think of it as a system readily available when you undergo an expensive loss.  The fact that a risk (a person, a business, merchant cargo) needs to move forward and MAY experience a future loss (a car crash, a fire to a building, a storm capsizing a merchant ship) is smart to say that we trade payment for coverage now in the event a risk should take place in the future.  Who in the world would upfront your insurance limits knowing a future loss is waiting to happen?  Even our forefathers knew insurance was an important system in the delivery of goods. 

As early as the 1700s, cargo vessels sailed to the new land delivering goods but not without high stakes and adequate protection.   British business consisted of one class: wealthy.  However, merchants were a growing middle-class betting high on new world developments.  One particular coffeehouse in London offered its establishment as a gathering place for merchants to auction their goods. Edward Lloyd published Lloyd's News three times a week for updates on maritime exchange. 
The Lloyds List was established in 1734 to keep merchants abreast of shipping news, however, gambling and speculation presented cause for respectable customers to seek a new premises.  By 1769, a The New Lloyds List was formed.
The registry had changed its name several times and location until 1774.  Seventy-nine members of Lloyds began transacting at the Royal Exchange as underwriters.  By the 1800s, the underwriting room was restricted to underwriters, merchants, bankers, and insurance brokers. 
During the 1800s, while Lloyd's continued offering marine insurance, smaller insurers began offering fire and life insurance protection. Lloyds was on the decline while the smaller insurers shifted successfully.  By the late 1800s, Lloyds of London reorganized and emerged successful in almost every aspect of insurance.                   
                                                        
                                                Next:  Cargo Vessels Sail to the New World.