PERILS AND PREMIUMS.

New Zealand Herald, Volume LXIII, Issue 19502, 4 December 1926, Page 2 (Supplement)

PERILS AND PREMIUMS.

ORIGIN OF INSURANCE, BACK TO ANCIENT GREECE. THE MODERN DEVELOPMENT. SOME INTERESTING POLICIES. Those people who think of insurances as an entirely modern development must have been rather surprised when Lloyd's acquired a photograph of a policy dated 1584. This interesting business document covered goods on the ship St. Ilary, which was sailing from Marseilles to Syria, and is believed to be the oldest marine insurance policy in existence. Copies of still earlier policies may be found in the British Public Record Office, where they have been preserved, but the oldest original marine insurance" policy in England is some seventy years younger than the St. Ilary example. It was drawn

on goods in the ship Three Brothers, and is dated February, 1656. Marine insurance, however, is older eyen than the sixteenth century. It has been traced back to the twelfth century in Lorabardy, and was known in Pisa in the early fourteenth century. But the Italians of the Middle Ages did not originate insurance; they only revived a practice which the Romans had borrowed from the Ancient Greeks; There is a reference to a form of marine insurance in one of the orations of Demosthenes. And even before that, about the year f)QO 8.C., the Rhodian merchant adventurers recognised and acted upon the root principle 1511 which all insurance is based. If part of a cargo had to be sacrificed to save the rest, all concerned shared the loss. This still survives in insurance as " general average." So that marine insurance ia only a century or so short of 3000 years old. Once it had been re-established in Italy insurance soon spread to other lands, introduced by the Italian merchants and bankers, who were- Europe's first, financiers and whose counting-houses were

to be found in every great city. For a time, too, Italian was the language of insurance, and the first policies issued in Britain were in that tongue. But about the middle of the sixteenth century Italian gave place to English in these documents. It is interesting to compare the wording of a modern insurance policy with the following form of ih« first policy in the vernacular, that on the Sancta Crux, thirty years before the Spanish Armada:— " We will that this assurans shall be so strong and good as the most ampie writings of assurans, which is used to be rnaid in the strete of London, or in the burse of Andwerp." The phrasing suggests that marine insurance was already quite common in London. Although navigation wa3 a much more perilous affair In those days than it is now, premiums do nob seem to have been unduly heavy, That an the St. Tlary cargo was only five per cent., which was very moderate in view of the real dangers of a Mediterranean voyage at that time. Tn the early days calculations aa to risks were probably not' very scientific, but even from the first insurance seems to have been profitable. And in 1776, when Adam Smith's " Wealth of Nations" was published, the foundations of modern actuarial methods appear to have been established pretty firmly, According to the " father" of political economy; " The valtiie of the risk, either from finj, or from lloss by sea, or by capture, though it cannot, perhaps, be calculated very exactly, admits, however, of such a gross estimation as renders it, in some degree, reducible to strict rule and method,"