Insurance Policy

The earliest known insurance contract was written in Genoa in 1347. A merchant paid a premium to transfer the risk of a Mediterranean cargo voyage to an underwriter who agreed to absorb the loss if the ship did not arrive.¹ The concept spread rapidly through Italian port cities, where the mathematics of shared risk became a commercial discipline.

By the fifteenth century, marine insurance was standard practice in Barcelona, Venice, and Florence. The Barcelona Ordinances of 1435 are among the earliest known insurance regulations.² The word "policy" itself comes from the Italian polizza, meaning a written promise or receipt.

1347, The year the earliest known insurance contract was written in Genoa, covering a Mediterranean cargo voyage.

Lloyd’s of London began as a coffeehouse in the 1680s where ship owners, captains, and merchants met to arrange marine coverage. Edward Lloyd’s coffeehouse on Tower Street became the meeting point where underwriters signed their names beneath the terms of risk, a practice that gave the industry the word "underwriter."³

Life insurance followed a different path. The Amicable Society for a Perpetual Assurance Office, founded in London in 1706, was among the first life insurance companies.⁴ The concept that a human life could be assigned a monetary value and that premiums could be calculated against the probability of death required both actuarial mathematics and a particular way of thinking about persons as economic units.

Timeline

• 1347, A Genoese merchant wrote the earliest known insurance contract covering a Mediterranean cargo shipment.
• 1435, Barcelona adopted among the earliest known insurance regulations governing marine underwriting.
• 1680s, Edward Lloyd’s coffeehouse in London became the meeting point for marine insurance underwriters.
• 1706, The Amicable Society for a Perpetual Assurance Office was founded in London.

Endnotes

1. Peter L. Bernstein, Against the Gods: The Remarkable Story of Risk (New York: Wiley, 1996).
2. A. B. Leonard, ed., Marine Insurance: Origins and Institutions, 1300-1850 (London: Palgrave Macmillan, 2016).
3. Charles Wright and C. Ernest Fayle, A History of Lloyd’s (London: Macmillan, 1928).
4. Geoffrey Clark, Betting on Lives: The Culture of Life Insurance in England, 1695-1775 (Manchester: Manchester University Press, 1999).