------------ EH.NET BOOK REVIEW --------------
Published by EH.NET (February 2006)
Robin Pearson, _Insuring the Industrial Revolution: Fire Insurance in
Great Britain, 1700-1850_. Aldershot, UK: Ashgate, 2004. xiii + 434
pp. $100 (hardcover), ISBN: 0-7546-3363-2.
Reviewed by Mark Tebeau, Department of History, Cleveland State University.
Despite its rather obvious importance to modern economic development,
the history of fire and property insurance has been largely
neglected. Until now that is. Robin Pearson's exhaustively researched
and meticulously argued study, _Insuring the Industrial Revolution:
Fire Insurance in Great Britain, 1700-1850_, offers the definitive
history of the British fire insurance industry through the middle of
the nineteenth century. Even more critically, Pearson establishes
just how integral property insurance was to the industrial
revolution. Although Pearson is careful to note that fire insurance
did not determine the economic development (and, in fact, was often
shaped by it), he shows how fire insurance developed in support of
the broader economy, was often at the cutting edge of industrial
business expansion, and fostered further economic growth.
At its broadest level, Pearson's argument demonstrates how fire
insurance was integral to an industrializing society. Widely
available in London by the 1850s and easily acquired in the
provinces, fire insurance reduced the uncertainty associated with the
hazard of fire -- at least in economic terms for businesses and the
middle-class for whom insurance policies would have been most
affordable. On mechanistic grounds, the availability of relatively
cheap and stable forms of insurance offered security to property
owners -- residential, mercantile, or manufacturing. By indemnifying
policy holders from significant property losses associated with
fires, insurance provided an institutional incentive for accumulating
wealth in the form of material items and investment. In short, it
minimized the risks associated with aggressive economic development.
At the same time, fire insurance was critical to the financing of the
infrastructure, thus critical to industrial development. Firms
provided capital for a variety of public improvement projects as well
as for private economic ventures. Fire insurance firms also depended
on and strengthened the institutional networks on which economic
development depended. Thus, fire insurance became integral to
industrial activity, "forming part of the feedback mechanism by which
trust and confidence multiplied within business communities" (368).
Pearson's research is exhaustive and his arguments are qualified with
exceptional care -- so much so, that it is difficult to offer a full
accounting in a brief review. _Insuring the Industrial Revolution_
begins with an initial chapter that outlines the overall development
of the industry in a series of detailed and well-constructed tables.
After that, the story is organized into two parts. The first section
offers a chronological portrait of the industry. Pearson essentially
divides his narrative into three periods of analysis, bounded by
major political and economic developments, as well as shifting trends
in the industry itself: the period from 1720 to 1782, the era from
1782 to 1815, and finally the years between 1815 and 1850. In these
chapters, Pearson places the industry into the historiography of the
British industrial revolution. Throughout, he takes an approach that
explores the entirety of the market in insurance. He explores the
vagaries of fire insurance firms in the provincial areas as well as
in larger cities. He meticulously compiles and analyzes a mountain of
data, synthesized into over fifty figures and tables -- an impressive
and (no-doubt) time-consuming contribution in their own right.
The second section of _Insuring the Industrial Revolution_ examines
the industry's internal organization in a thematic explication of its
central elements. It explores four broad topical areas: the process
of company foundation and the social, political, and economic
networks behind this process; the marketing of insurance and the
development of networks of agents to manage the insurance
transactions; the core practice of underwriting and its change over
time, including the challenges of assessing risk; and the trends in
how companies invested their capital and understood that capital in
terms of their broader portfolio of risk, as well as how the
insurance industry operated as an investment from the perspective of
individual investors.
Although well written, it is easy to get lost in the details of this
story. Pearson lovingly and painstakingly recounts an exhaustive list
of similarities and differences in the industry, paying special
attention to the geographic differences between Britain's various
provincial areas, and between the provinces and the major
metropolitan centers. Sometimes frustrating from the perspective of a
reader, this level of specificity nonetheless advances the larger
purpose of the book, which is to recognize that subtle -- and
sometimes contradictory -- manner in which the industry developed.
Nor is this precisely a critique of Pearson's skill as a writer. To
the contrary, Pearson shows deft authorial voice in juggling such a
complex story. For example, both the first and second sections of the
narrative cover the same material, but there is little sense of
redundancy here. In fact, Pearson's examination of the various
elements of the insurance industry is exceptionally well constructed.
These chapters are a primer on the basics of insurance, introducing
issues that did not disappear in 1850 but would continue to haunt
insurers well into the twentieth century.
_Insuring the Industrial Revolution_ will become a touchstone for
future research on the history of fire and property insurance in part
because of the connections that Pearson makes between
industrialization and fire insurance. More importantly, though, this
work also lays out an agenda for future research into the industry.
Pearson provides a compelling argument as to why we should seek to
better understand the connections between economic development and
property insurance. He suggests, too, that we must look at the
subject globally, developing rich cases studies that explore the
history of insurance in Europe, the United States, and other places.
And, through the example of what he has done with the British fire
insurance industry, he demonstrates the benefits of weaving such case
studies into the comparative history of property insurance. Not only
will we get a better sense of the particulars of the industry, but we
will also be able to better understand how the expansion of global
economic connections may have fostered the stability of the insurance
industry by creating a market in reinsurance and dispersing risk more
widely. And, finally, we must keep in mind that the history of the
fire insurance industry does not end in 1850 with the advent of more
sophisticated tools for understanding risk. Rather, the industry's
continued evolution occurs in a direct relation to broader economic,
political, and societal changes, not the least of which is that the
danger of fire itself will continue to shift in modernizing societies.
Indeed, if _Insuring the Industrial Revolution_ shows how the study
of fire insurance contributes to broader debates in economic history,
it also suggests implicitly that we place the study of fire insurance
into a wider historical lens. Unfortunately, Pearson is a bit too
guarded about such possibilities, arguing that "establishing an
evidential link between the expansion of insurance and broad
attitudinal changes in a society is extremely difficult" (368).
However, I believe that we should nonetheless push the boundaries
here and broaden the frame. We should identify ways in which the
expansion of fire (and property) insurance was related to changes in
the social, cultural, and political realms. I agree that such
connections are difficult to prove, but as I suggest in my own work
on urban fire risk, the work of insurers had tremendous implications
for society. These include encouraging consumerism and the consumer
safety movement; fire underwriters' activities are clearly linked to
shifting perceptions of societal danger; and, at the very least,
insurers' visions of the world frequently have been built into the
material landscapes of ordinary life.
_Insuring the Industrial Revolution_ is a singular achievement. Robin
Pearson demonstrates that fire insurance played a consequential, if
sometimes ambivalent, role in the industrial revolution. He also
provides a roadmap that future scholars in this area will follow when
constructing their own studies of the history of fire insurance. I
hope that this fine study garners the wide audience it deserves.
Mark Tebeau is author of _Eating Smoke: Fire in Urban America,
1800-1950_ (Johns Hopkins University Press: 2003).
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Published by EH.Net (February 2006). All EH.Net reviews are archived
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