Evolution of Marine Insurance

Evolution of Marine Insurance

Around the 13th Century, Lombardy of Northern Italy emerged as a flourishing center for trade. The early practice of Insurance of ships is called marine Insurance and is associated with the merchants of the cities of Lombardy. The Lombard’s also established themselves in London and other cities. When the Germans conquered and devastated the cities of Northern Italy, many of the mercantile families of Lombardy migrated to the more favored and settled countries where they would be more secure and free to practice their trade. Many of them went to London. Wherever they went the Lombard’s took with them the practices of marine Insurance, banking and money lending. The earliest known policy issued in London was inscribed in Italian and was dated 20th Sept. 1547. The policy written in English dated 1555 was known to be on the ship “Santa Crux” from any part of the Isles of India of Calicut to Lisbon.

In contrast to the Jews who demanded very high rates of interest for their loans, the Lombard’s offered low rates. Because of this, they were greatly favored In London. They rapidly became powerful and wealthy. England benefited greatly from the peculiar skills and acumen of the Lombard’s. Policies of marine insurance even today bear the roots of Lombard Influences. The Lombard’s even built a street of business premises with residential accommodation over, which still retains the name of Lombard Street. However, the original structures were all wiped out by the Great Fire of London 1666. The native people of London naturally resented the success of the foreign merchants, As a result, many laws were passed aimed against Lombard’s.

Soon the Lombard’s finding their scope for commercial activities restricted severed their connections and left for other parts.

MERCHANTS OF HANSA TOWNS

Contemporaneously with the Lombards, marine Insurance was practiced by the merchants of the Hansa towns. It is believed that in a way of understanding, probably informal, the Lombards confined their operations in Europe to the south of Bruges, whilst the Hanse merchants controlled commerce to the north of that city. Hansa merchants first settled in England during the reign of Edward the Confessor, when they were originally known as ‘Easterlings, or ‘Easterlings’. As in the case of the Lombards, the Hansa merchants also kept themselves distant from the native population. They established themselves in what were almost fortified warehouses and great distributing centers. But at the same time, they contributed substantially towards setting the foundation-stone of Britain’s later pre-eminence. In overseas trade, they played a vital role in suppressing piracy. They were relieved from the payment of levies towards combating the pirates who at that time infested the Thames; probably because they undertook operations on their account to repress these.