The event most commonly cited as the catalyst for modern insurance is the Great Fire of London in 1666. The devastation spurred leaders and entrepreneurs to develop organized fire insurance and a formal system for underwriting and risk sharing, which laid the groundwork for the modern insurance industry as we know it today.
Key points and context
- Great Fire of London (1666): The widespread destruction demonstrated the need for organized protection against property loss and led to the creation of early fire insurance policies and, soon after, more structured approaches to risk assessment and underwriting.
- Post-fire developments: Following the fire, insurers and associated institutions began to formalize practices. Notable early steps include mutual fire companies and the emergence of brokers and coffeehouse networking that connected ship owners, merchants, and underwriters, ultimately contributing to marine and property insurance models that evolved into modern frameworks.
- Longer historical arc: Insurance as a concept traces further back to earlier risk-sharing ideas (ancient codes and merchant practices), but the 1666 event is widely regarded as the driving force behind the organized, modern insurance industry—pushing forward actuarial thinking, standardized policies, and insurance markets that flourished in the centuries that followed.
If you’d like, I can tailor this to a specific aspect—for example, the development of homeowners insurance in the United States, the evolution of underwriting practices, or the role of Lloyd’s of London in modern insurance.
