------------ 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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