Robin Pearson

Towards an Historical Model of Services Innovation: The Case of the Insurance Industry, 1700–1914

There has been a recent shift in the historiography of the modern British economy towards an emphasis on the success of the service sector. This article examines one criterion of success, namely innovation, in British insurance between 1700 and 1914. Factors determining innovation are surveyed and comparisons drawn with European insurance. The relevance of existing models of industrial innovation is challenged and a new model is constructed for insurance. This model suggests that insurance innovation ran broadly counter-cyclical to innovation in industry during this period, and was relatively undynamic. The article concludes by speculating about the relationship between industrial growth, liquidity constraints, and innovation in insurance.

'A doe in the city': Women shareholders in eighteenth- and early nineteenth-century Britain

Abstract This paper investigates the role of women as shareholders in joint stock companies, and how far they can be characterised as active investors. It is based on a large database of company constitutions, together with procedural records and the pamphlet literature of the period. The penetration by women of the private sphere of investment did not always extend to the more public sphere of participation at shareholder meetings. Literary representations of women as speculators reinforced such boundaries. While the separate spheres may have been blurred, considerable limitations were set on the extent to which female shareholders could participate fully in the governance of joint stock companies.

Social capital, institutional innovation and Atlantic trade before 1800

The growth of the Atlantic economy during the eighteenth century has been associated with developments in business networking to mitigate the hazards of communication in long-distance trade. Such social capital-based mechanisms reduced transaction costs, but also proved to have their limitations in the changing conditions of eighteenth-century international trade. This paper argues, using the example of the British slave trade, that efforts to innovate less personalised forms of commercial exchange gave those prepared to do so a considerable competitive advantage, and promoted the unprecedented expansion of that trade between 1750 and 1807. We suggest that this shift may be viewed as a precursor of modernising tendencies in business practice in Britain during the industrial revolution.

Mutuality Tested: The Rise and Fall of Mutual Fire Insurance Offices in Eighteenth-Century London

There is now a considerable body of theoretical literature on the comparative efficiencies of mutual and stock forms of corporate organisation in financial services. However this question has received comparatively little attention from business historians. This article examines the factors behind the dramatic rise and fall of three large mutual fire insurance offices in Georgian London, addressing issues of their financial structure, organisation and governance, in the context of modern theories of mutual formation. It is concluded that changing levels of aggregate uncertainty in the market - rather than internal agency conflicts - provide the best explanation for the early success and subsequent failure of these financial institutions.

Growth, crisis and change in the insurance industry: a retrospect

The insurance industry currently finds itself in a revolutionary situation characterized, in part, by the impact of new direct marketing techniques, facilitated by new technologies; by corporate restructuring and the creation of international mega-corporations; and by the accelerating globalization of the industry. This article surveys recent research on insurance history with the aim of placing these developments in their long-run context. Three areas are examined for evidence of continuities and discontinuities with the past: namely, the impact of technology, the interaction between markets and organizational change, and the globalization of insurance and its relationship to economic growth.

Moral Hazard and the Assessment of Insurance Risk in Eighteenth-and Early-Nineteenth-Century Britain

Insurance is a business in which trust is the corollary of risk taking. One problem for the insurance industry in eighteenth and early nineteenth-century Britain was how to bridge the gap between the world of business based upon personal trust, and the emergence of new commercial relations where moral hazard was mass produced and where a commanding knowledge of personal reputations was virtually impossible. This paper examines the imperfect methods devised by early life and fire insurance offices to assess both physical and moral hazard and postulates a relationship between the two. The responses to two particular moral hazard “problems” identified by contemporary underwriters–insurance by the Jews and the Irish–are explored.

Regulatory Regimes and Multinational Insurers before 1914

At the end of the twentieth century, the global diffusion of one important financial service, insurance, was encouraged by deregulation, but it also encountered difficulties where deregulation remained incomplete and where there were many nonregulatory barriers to entry. International insurance was already well developed before 1914. The growth in the global insurance trade, however, occurred against a background of increasing national regulation and fiscal burdens in many countries, making international business affordable only for the largest companies with the deepest reserves. This paper offers some preliminary estimates of the extent of the international insurance trade during the half-century before the First World War, and assesses the impact of national regulatory regimes and nonregulatory factors on the development of this business. The analysis is placed within the framework of modern theories of regulation and multinational enterprise.

Technological change and the governance of joint-stock enterprise in the early nineteenth century: The case of coastal shipping

Recent studies of the innovation process have viewed it as the outcome of organizational dynamics rather than as the product of technological developments exogenous to the governance of firms. We apply this approach to our examination of British coastal shipping companies during the early nineteenth century as they grappled with the problem of making a successful transition from sail to steam technology. Within the industry there were contrasting responses to this transition, but also common elements in the decision-making process. Before the 1840s, there remained a widespread assumption of shareholder involvement in this sector as in others. The evidence suggests that shipping company directors were generally able to determine resource-allocation decisions, but not without first taking into account governance relations.

The birth pains of a global reinsurer: Swiss Re of Z rich, 1864 79

This article employs, for the first time, the private archive of one of the worlds largest and oldest reinsurance companies, Swiss Re, founded in ZA¼rich in 1863, in order to analyse the early development and internal workings of reinsurance – the insurers insurance – in nineteenth-century Europe. In the course of overcoming existential crises during its early years, the companys management learned valuable lessons about the technical basis of reinsurance and the importance of information and communication. In the long run, this experience enabled Swiss Re to gain a greater autonomy of action for professional reinsurers within the insurance industry as a whole.

Law, politics and the governance of English and Scottish joint-stock companies 1600-1850

This article examines the impact of law on corporate governance by means of a case study of joint-stock enterprise in England and Scotland before 1850. Based on a dataset of over 450 company constitutions together with qualitative information on governance practice, it finds little evidence to support the hypothesis that common-law regimes such as England were more supportive of economic growth than civil-law jurisdictions such as Scotland: indeed, levels of shareholder protection were slightly stronger in the civil-law zone. Other factors, such as local political institutions, played a bigger role in shaping organisational forms and business practice.