Overlooked bargains in the insurance industry

The insurance industry is one of the world’s most important, but also misunderstood and underappreciated industries. Most people think of it as an unnecessary cost – they think of the products they see and use, such as home and car insurance. These are important and vital, but they are only really the tip of the iceberg of the insurance industry.

A brief history of the industry

Insurance is all about spreading risk between different parties. The first use of an insurance product can be traced back several thousand years, to around 1750BC. But it is widely believed that the modern insurance market was born in London in the mid-1600s. John Graunt, an early statistician and demographer, analysed demographics to produce a series of tables that predicted, with an astonishing degree of accuracy, how long a person was likely to live based on their situation in life. These tables enabled fledgling life-insurance companies to start pricing risk accurately and helped statisticians devise other methods of measuring risk in other fields. The Great Fire of London in 1666 ushered in the fire-insurance industry. By the end of the century, the insurance industry was blossoming.

Around the same time, coffee shops started springing up around the city, which became informal gathering places for business owners and investors to swap information and trade. Edward Lloyd, who ran a coffee