Historical Musings: The Fire Office
Or, how the Great Fire of London in 1666 birthed the modern day insurance industry
Living in London is a historian’s dream, and I am, first and foremost, a student of history. A passionate one, in fact, as my two degrees in the subject would prove (despite their lack of employability). Nearly every street corner has some plaque dedicated either to an obscure person who had an impact on England, or to an event that changed the course of human history. There are also a surprising number of plaques commemorating the Great Fire of London, which I first learned about during a rather traumatising trip to Madame Tussauds in 2007. If you don’t know about the Great Fire of London in 1666, firstly, where have you been for 400 years? And secondly, I forgive you because there were at least three other fires that similarly decimated the city, and I was also only made aware of that fact recently.
The 1666 fire gained notoriety for various reasons – it started in a small bakery on Pudding Lane by the Tower of London in the old medieval city of London on a Sunday, and raged through the city until Thursday, at which point it stretched past Ludgate Hill, into present day Fleet Street. It was well on its way to Whitehall Palace before it was finally contained.
However, this is besides the point. Yes, the fire robbed us of the old city. Want to go see the old walls of London? Sorry, they don’t exist – but we’ve dug underground and you can see the Roman ones – and here’s a cute little plaque instead! Interested in medieval churches? Mmm, no, we don’t have that, but here are fifty-two buildings and churches commissioned by Sir Christopher Wren.1 The Great Fire’s lasting legacy is not those little plaques or the weird decision to convert the square mile into a corporate hellscape where dreams go to die (I’m being dramatic).
No, the legacy of the Great Fire of London is that it quite literally birthed the insurance industry.
“What are the chances, Mika?” You say, incredulous.
Well, really quite high. I discovered this very recently, and with all that’s been happening in the world, I did what any critical thinker did and went straight to Google (not Chat-GPT, which fills me with dread every time I think about it). Imagine me, on my little laptop, furiously typing when did insurance start? It turns out, the discussions around insurance became fervent following the fire, and it was established as a necessity for Londoners to prevent a repeat of the loss of property at such a scale. Sir Christopher Wren even included an insurance office in his plans for a new London as early as 1667.
However, insurance proved a relatively hard scheme to sell. We have to jump to 1681 now, right in the midst of the rebuilding efforts after the Great Fire of London. People have always been entrepreneurial, it seems. I must caution here that insurance as a concept existed prior to this period, however it was specific to maritime insurance over ships in the event they sank or were lost at sea, and was not nearly as formal or widespread as what arose in the wake of the Great Fire. Also, maritime insurance is a world of its own, so for the purposes of this post we are going to pretend it does not exist, because I would otherwise be forced to launch into a lengthy explanation of Lloyd’s of London, and that would require me to talk about how coffee shops originated in England as well.2
I would like to introduce you to a new character in this story. His name was Nicholas Barbon. Barbon was a physician and economist, and was personally disturbed by the vast loss of property resulting from the fire, given that his home was one of the last to be lost to the Great Fire. He and eleven of his mates established the aptly named “Fire Office,” which was the first insurance scheme to stick following 1666.3 Initially they insured 5000 homes, and by this point the concept of home insurance for fires expanded to the point where many other companies were following a similar strategy. His insurance scheme differed from what we see today. In fact, the early fire insurers all had their own fire brigades to minimise damage to properties insured. If a fire started in an insured house, the company’s fire brigade would be deployed to put it out. A happy, symbiotic relationship, right?
Unfortunately not. The problem with having private firefighters is fairly simple: Rival brigades refused to put out fires in buildings they did not insure. Ergo, a solution had to be put in place where the insurers paid money towards the municipality, which would then station brigades equally around the city. Problem solved? No, the brigades then developed a nasty habit of only moving to save insured houses and letting uninsured ones burn. Overall, a fickle system driven by capitalism, per usual. But, it proved useful enough that it continued on.
And if we jumped over the Atlantic Ocean to Philadelphia in 1752, we would find Benjamin Franklin, beloved Founding Father, inventor, and owner of a home with a suspicious amount of bones buried in the garden4, who was well on his way to becoming an insurance man as well. Credited – but not remembered – for popularising insurance in the colonies and later land of the free and home of the brave, Franklin started The Philadelphia Contributionship, a mutual insurance group, to offer fire insurance for homes in Philadelphia. The company was particular – conducting assessments of homes on their risk of fire, increasing rates based on unsafe living practices, and denying insurance for others which were at high risk of fires (likely due to being built out of wood). The company is also still running today!5
Insurance as we know it today… is another story. Evidently as time has passed, the focus of insurance companies has noticeably shifted from altruistic (protect people’s property in the event of an accidental fire) to, well, shareholder value. As for the Great Fire, if you want to learn more, I sincerely recommend the Spirit of London ride at Madame Tussauds. I’ve no idea what it’s like today (again, the last time I was on it was nearly 20 years ago), but it was interesting enough to leave an impact to date.
Leave a comment below if you want me to dive into another random bit of history!
See you in two weeks!
Mika x
Sir Christopher Wren was booked and busy after the fire, and you know what? Good for him.
The two are connected – before starting one of the most renowned insurance markets, Edward Lloyd was capitalising on the coffeehouse boom across England at large, which I can definitely get behind. His coffeehouse by Tower Hill actually became one of the main sites of maritime betting - sailors would make bets on which ships would return to port, and which would be lost at sea. This is effectively what underpinned Lloyd’s insurance market at its inception.
Like most notable ideas, it was (probably) conceived in a pub.