Page 9 - M1_Insurance Introduction Notes
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became important. It created a vital counterbalance to
the new and potentially destabilising forces that were
transforming the division of labour, urbanisation, and
the economics of trade. Insurance also helped money
become the means of communication within the
economy and contributed to more and more problems
being expressed in terms of costs and time.
The Great Fire swept through London from 2 to 5
September in 1666. It destroyed over 70000 homes. It
did not take long for the first fire insurance company
to be established after the catastrophe. One Londoner,
Nicholas Barbon, made a fortune out of rebuilding the
city and then turned to insuring the houses. His
rational approach and his experience as a banker and
mortgage provider made him realise that his insurance
company needed to be built on a different financial
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