British Insuran ce- A World Service
HE most salient among first facts about British Insurance today is its dominance in the commercial and industrial market places of the free world. From this, and the causes underlying it, springs all else. Because of it, the insurance companies and Lloyd's last year culled from abroad Well over £500 million in premiums, or, put another way, some 70 per cent. of their total general premium income. Because of it, too, the net gain to Britain in vital overseas currencies %was more than £40 million—a figure which makes insurance one of this country's biggest ' invisible ' exports. , All of which prompts the two-part question: What, in fact, is this intangible of which we export so much and why does most of the world come to us to buy it ? In essence, insurance is nothing more nor less than a promise to pay an agreed sum in the event of a certain happening coming to pass—as, for example, motor accidents, fires in houses and factories, the sinking of ships at sea. A paramount ondition for success in insurance, therefore, is an unimpeach- "able reputation for honouring one's promises. And British insurance has had just such a reputation for the greater part of hree centuries. Moreover, when this reputation is translated lit° the down-to-earth terms of paying out claims, our insurers to everywhere known for their adherence to the spirit, rather an the letter, of their contracts. The case of fire insurance is a particularly good instance of the way British insurance followed British trade to new markets overseas. When, early in the nineteenth century, fire insurance became really big business, two of today's leading fire offices were already successfully established in Liverpool. the main trade of which port was with North America. Ipso facto, North America in the nineteenth century was British fire insurance's biggest overseas market. It still is today.
It so happens, too, that in the North America of the nineteenth century the integrity of our fire insurers was sub- jected to its first big tests. The occasions were the great Chicago fire of 1871, the great Boston fire of 1872. In Chicago 12,000 buildings were destroyed and the total of insurance was over £20 million. In Boston nearly 800 houses were burnt to the ground at a cost to insurance interests of some £13 million. Many local insurance companies collapsed under the strain. But British insurers, with a large proportion of their business well spread in Britain and other countries, quickly paid out their share in full. Association came from abroad; in 1952, this proportion had risen to 134 per cent., and now it is even bigger. Further, life assurance, in encouraging personal thrift here at home, builds valuable capital resources for the development of British industry and commerce as a whole. In fact, simply by providing for the future security of its policy holders, it auto- matically enables them to contribute directly to the nation's day-to-day prosperity.
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