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).

Published by EH.Net (May 2021)

Jerònia Pons and Robin Pearson, editors, Risk and the Insurance Business in History. Madrid: Fundación Mapfre, 2020. 290 pp. ISBN: 978-84-9844-753-8.

Reviewed for EH.Net by Chris Kingston, Department of Economics, Amherst College.

The history of insurance, as many authors have noted, has been relatively neglected by historians, including economic historians; but in recent years, with a steady growth of interest from scholars across a range of disciplines, the field has been expanding in geographic, historical and methodological scope.

In June 2019, two leading pioneers in the field, Jerònia Pons (University of Seville) and Robin Pearson (University of Hull) organized an international conference on “Risk and the Insurance Business in History” at the University of Seville. The conference brought together scholars of insurance and risk from a wide variety of academic and professional perspectives, with the explicit goal of creating a forum to encourage interdisciplinary dialogue. For insurance scholars, as this reviewer can attest, it was a rare and valuable opportunity to network, and a remarkably fertile, stimulating and enjoyable gathering. Hats off.

This collection of nine papers presented at the conference, edited by Pons and Pearson, is published with the support of the Mapfre Foundation, which also supported the conference itself. In a valuable and wide-ranging introduction, the editors weave together some of the disparate strands of the fragmented literatures on risk and insurance. Their survey takes in cultural theorists’ studies of how perceptions of risk, liability, and insurance vary across cultures; behavioral economists’ studies of the psychological anomalies that arise in decision-making under uncertainty; and sociologists and legal scholars’ approach to the insurance industry as a source of a kind of governance over risk-taking behavior among the insured. They also emphasize the omnipresent role of “the state” in multiple roles: as a provider of various kinds of insurance, as a source of risk through warfare, and as a fount of regulation that has the potential to constrain or encourage the development of insurance markets, organizations, and practices. The overarching point is to underscore the editors’ motivation for organizing the Seville conference: the diversity of approaches to the study of risk and insurance in history, and their belief in the potential for beneficial collaboration and cross-pollination.

While the quality of the contributions varies, and some might have benefited from more intensive editing, there are several very valuable papers in this collection that stretch the boundaries of the discipline and deserve to be widely read by those interested in insurance history and related fields.

Timothy Alborn tells the fascinating tale of how nineteenth-century British life insurers wrestled with the question of how to insure the lives of missionaries, soldiers and Victorian adventurers as they ventured to remote and frequently pestilential corners of the world and the Empire — areas about which the companies had only very scattered and incomplete information. These companies also made hesitant and frequently racially prejudiced forays into the business of insuring non-white colonial subjects of the Empire, even as it gradually became clear that the “civilized” locals often experienced better health and lower mortality in their native climes than did their European expatriate masters. In contrast, for the late nineteenth century American insurers whose efforts to expand into Latin America are adroitly described by Sharon Ann Murphy, the whole point was to insure the locals. Their efforts were however hampered by agency problems, ultimately collapsing as they abandoned the field to emergent domestic firms in the face of restrictive legislation, political uncertainty, and scandal.

Leonardo Caruana de las Cagigas and André Straus survey the legal development and the increasing role of state regulation of the insurance industry in France and Spain from the late eighteenth to the early twentieth century, as new forms of insurance and organizational innovations emerged. Development in Spain generally lagged behind France, enabling Spanish companies and regulators to take advantage of the lessons learned elsewhere, but divergent political histories ensured that paths of development remained distinct. Christofer Stadlin contrasts the development of employer accident and liability insurance as it was shaped by the regulatory environments in Germany and France in the late nineteenth century up until World War I, as seen through the eyes of the Zurich Insurance Company which was active in both markets.

José García-Ruiz presents a company history of the “bancassurance” relationship between the Spanish Banesto bank and Luyefe, Spain’s leading insurance company for much of the twentieth century, as the closely connected firms navigated a turbulent political landscape and ventured into new areas of business. Mikael Lönnborg, Peter Hedberg and Lars Karlsson describe how the Swedish insurance law of 1948 deliberately favored larger firms under the belief that the industry would become more efficient through economies of scale. Yet the resulting increase in concentration in the Swedish insurance industry failed to yield the hoped-for improvements in consumer welfare.

Other chapters consider the South African regulatory response to the 2008 global financial crisis (Greitjie Verhoef); the evolution of the legal and regulatory framework underpinning the development of fire insurance in nineteenth-century Canada, influenced by both French, British and American precedents (David Gilles and Sébastien Lanctôt); and how the valuation of American insurance companies’ assets was fudged, with the approval of the authorities, to enable them to satisfy solvency requirements during the financial crisis of the early 1930s (Luca Froelicher).

With such a wide breadth in focus, scope, and methodology, it is debatable whether this collection amounts to more than the sum of its parts. Pearson and Pons, seeking for a unifying theme in their introductory essay, draw attention to the congruence in time periods (most contributions deal with the nineteenth and early twentieth centuries) and to the influence of state regulation on decision-making by insurance companies; and certainly “the state,” in one way or another, looms large in all of these pieces, as it must in any study of modern insurance. The real significance of the volume is as a milestone for a field of study that is progressing vigorously, and that holds the promise of important and potentially fruitful interdisciplinary research questions that have barely begun to be explored. In this regard at least, the vision of the conference organizers, the editors of this volume, is fully vindicated.

Chris Kingston is the Richard S. Volpert ’56 Professor of Economics at Amherst College. He has published several papers on the history of marine insurance in eighteenth-century Britain and America and is working on a book provisionally entitled In Peril on the Sea: Institutional Change in Marine Insurance, 1720-1844.

Copyright (c) 2021 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (May 2021). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Published by EH.Net (August 2013)
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Peter Borscheid and Niels Viggo Haueter, editors, World Insurance: The Evolution of a Global Risk Network. Oxford: Oxford University Press, 2012. xvi + 729 pp. $180 (hardcover), ISBN: 978-0-19-65796-4.

Reviewed for EH.Net by Geoffrey Clark, Department of History, State University of New York at Potsdam.

This massive volume on the spread and integration of insurance services internationally comes on the heels of two much less comprehensive collections of essays about insurance globalization during the past two centuries.[1]? Those earlier studies were self-consciously pioneering efforts to descry the contours of a convoluted and sprawling historical landscape that scholars had scarcely explored hitherto. Now, with the appearance of World Insurance: The Evolution of a Global Risk Network, the development and diffusion of insurance worldwide has received a definitive, although hardly final, treatment. For the first time, historians working across a range of subjects from finance and economic modernization to social welfare and even religion have access to a systematic account of how the insurance industry has transformed the risk environment faced by billions around the world and how that process has knit together the economies and fortunes of far flung societies and cultures.

That said, few readers will possess the fortitude to read this book cover to cover, an expectation that the editors wisely seem to have anticipated in their format. Peter Borscheid provides an admirably concise summary of the overarching themes in a general introduction, which is followed by six parts successively devoted to Europe, North America, Sub-Saharan Africa, the Middle East and Northern Africa, the Far East and Pacific, and Latin American and Caribbean. Each of those regional sections begins with another of Borscheid?s introductory overviews, followed by a number of essays focused on specific countries. This organization allows readers to easily survey the broad features of the international insurance business or to bore down into the experience of one region or nation. The geographical coverage is not uniform ? nor could it possibly be given the fact that in the modern era insurance services radiated largely from the UK and were taken up earliest and most strongly in Europe and North America. The vast disparities in global wealth and insurance penetration that persist to the present are reflected narratively in the eight chapters that cover individual European countries while only one chapter examines the national history of sub-Saharan nations, namely the quite exceptional case of South Africa. That telltale gap is also illustrated in Borscheid?s astonishing observation that (leaving South Africa aside) the total of insurance premiums currently paid in all of sub-Saharan Africa is just 1.5 times that spent in tiny Liechtenstein (p. 324).

One of the central themes running through the essays of World Insurance, and forcefully argued by Borscheid, is that the spread of insurance around the globe was closely tied to the migration of Europeans themselves rather than simply to the export of the insurance idea alone. In the nineteenth and early twentieth centuries insurance services were focused mainly on the property and lives of Europeans settled abroad. As late as 1950, to cite an extreme example, 99 percent of insurance policyholders in Ethiopia were foreign residents (p. 316). These essays offer several explanations for the slow adoption of the insurance habit by indigenous peoples. Widespread poverty in many regions simply made insurance policies unaffordable, while the persistence of community- and kin-based networks of mutual aid reduced the need for European-style insurance facilities. On the other hand, as G. Balachandran points out, colonial prejudices made Western insurers wary of extending insurance coverage to native populations. One insurance trade journal from 1891 objected that Indians were bad risks because they were prone to early death and were difficult to identify positively, a fact that invited fraud since ?as a rule, the native is … devoid of moral sense in the matter of truth? (p. 447). Finally, religious scruples have sometimes prevented the acceptance of insurance, especially in conservative Arabian Peninsula, because Sharia law does not recognize insurance contracts and forbids speculation on human life. In a move reminiscent of earlier European attempts to circumvent prohibitions on usury, insurers in Muslim lands have devised Takaful, a mutualized form of insurance that is Sharia-compliant.
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Although one of the stated aims of World Insurance is to provide a cultural context to the rapid spread of insurance around the world (p. 1), the preponderance of attention is given to the economic and political dimensions of that development. The first wave of insurance globalization was carried out in the era of high liberalism as European powers established underwriting facilities in settler enclaves and then began to cultivate a local market in fire, property and casualty, and to a much lesser extent, life insurance. Towards the close of the nineteenth century European countries began to erect protectionist barriers to foreign insurers, a move replicated in following decades by Asian, African, and Latin American nations, who variously imposed reserve requirements, currency regulations, and discriminatory taxes on foreign companies in order to prevent capital outflows and to foster domestic insurance industries. In many cases these efforts succeeded in cultivating a home market, but at a price: many entrants into these fledgling markets were undercapitalized and poorly managed, prompting governments both in Europe and around the world to initiate periodic regulatory shakeouts of weak companies. In any case, the extent to which national insurance markets could truly be isolated from the global economy was limited by the excess risks ceded by domestic insurers to international reinsurers like Swiss Re (the company that, not coincidentally, sponsored this historical study of insurance internationalization). This protectionist era came to an end in the 1980s and 90s with the inauguration of what Jer?nia Pons Pons describes as the second wave of insurance globalization, which involved a relaxation of restrictions on foreign insurers; a string of mergers, acquisitions, and the creation of foreign subsidiaries; and the realization of greater efficiencies as the result of keener competition.
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Opportunities for the spread of insurance have also fluctuated with the ebb and flow of programs either to socialize or to privatize insurance risks. The creation of the Soviet Union and the People?s Republic of China furnish the most dramatic examples of the wholesale transfer of insurance services to state control. But whether done in the name of socialism, fascism, social democracy, or anti-colonial nationalism, the assumption by the state of responsibility for the provision of health care and pensions, or compensation for losses due to fire, flood, or loss of life, all diminished or eliminated the latitude of insurance businesses operating across national boundaries. The recent return to an emphasis on less regulated private enterprise in providing insurance cover, as well as the more integrated delivery of financial services exemplified by bancassurance, is just the latest swing of the pendulum toward private control, now in the guise of multinational corporate power and a neo-liberal ideology. Whether the post-2008 financial debacle will induce a return to a more stringent regulatory environment and a new generation of statist approaches to insurance is a question that must await a sequel to Borscheid and Haueter?s imposing and standard-setting World Insurance.

Note:
1. Peter Borscheid and Robin Pearson, editors, Internationalisation and Globalisation of the Insurance Industry in the 19th and 20th Centuries (Marburg: Philipps-University, 2007); Robin Pearson, editor, The Development of International Insurance (London: Pickering & Chatto, 2010).

Geoffrey Clark is Professor of History at the State University of New York at Potsdam. He is the author of Betting on Lives: The Culture of Life Insurance in England, 1695-1775 and co-editor of The Appeal of Insurance. He is working on a study of slavery insurance in the late medieval Mediterranean.

Copyright (c) 2013 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (August 2013). All EH.Net reviews are archived at http://www.eh.net/BookReview

Published by EH.Net (December 2012)

Tilmann J. R?der, From Industrial to Legal Standardization, 1871-1914: Transnational Insurance Law and the Great San Francisco Earthquake. Leiden: Martinus Nijhoff, 2011. xviii + 350 pp. ?99/$136 (hardcover), ISBN: 978-90-04-21237-4.

Reviewed for EH.Net by Robin Pearson, Department of History, University of Hull.

Tilmann R?der of the Max Planck Institute for Comparative Public Law and International Law in Heidelberg currently works on constitutional law projects in countries such as Afghanistan and Iraq. His early research, however, was on the development of contractual forms in transnational insurance, a topic rarely touched upon by historians. This unusual and interesting book, which is the English translation of his doctoral thesis published in German in 2006, examines the attempt by reinsurance companies, in the wake of the San Francisco disaster of 1906, to achieve an internationally agreed clause in fire insurance policies that would exclude insurers? liability for fire damage caused by earthquakes.

According to R?der, the earthquake clause was one example of the genesis of a ?transnational legal system? for business between 1871 and 1914. Contractual practice within and between private companies, not state law, was the driver of this change. Standard contracts helped increase the efficiency of transactions, facilitated international commerce, and compensated for the ?cultural lag? of the law in keeping up with developments in business. This argument, based on research in contemporary literature and the archives of German and Swiss reinsurance companies, is developed in three lengthy chapters on the development of the earthquake clause and the associated debates among lawyers and insurance professionals.

The earthquake and fires that devastated San Francisco in April 1906 destroyed 25,000 buildings and left 700 dead. The total loss of property came to about $400 million, of which some $265 million was paid out by insurers. Fifteen American and four European insurance companies went bankrupt. Only a small number of insurers carried a clause in their policies that exempted them from liability for damages arising from an earthquake. Disputes with claimants centered around the question of causation. It quickly became clear that the sympathy of Californian juries, and public opinion in the U.S. more generally, lay with the victims. Even when courts accepted the validity of an earthquake clause, it proved difficult for insurers to show that either the ?proximate? or ?remote? cause of fire damage was the earthquake. One response, adopted by several of the larger American and British companies, was to pay claims regardless of liability, deducting only for salvage. These became lauded as ?dollar for dollar? companies. Some later reaped the rewards of an enhanced market share and higher premiums. Another response, adopted by German companies, was to resist claims, flee vilification in the U.S. press, and face claimants before more amenable German courts. A third response was that of four German and Swiss reinsurance companies, who established a self-styled ?Earthquake Commission? to campaign for a uniform, internationally agreed earthquake clause to be inserted into all fire insurance policies around the globe. The reinsurers collected information on earthquake regulations around the world and drafted a model clause that excluded liability for fire damage caused either directly or indirectly by an earthquake, and that shifted the burden of proof onto the insured.

R?der regards this Earthquake Commission of 1906-08 as a pioneer of standardization in insurance, and he provides an account of how their proposed clause was received in different markets. What stands out, however, is how limited their success was. In the U.S. state legislatures introduced standard fire insurance policies that included, rather than excluded, earthquake liability for insurers. This gave companies a further incentive to abandon their own earthquake clauses, because their continued use would only increase the adverse selection problem in a highly competitive market. In Britain the Fire Offices Committee, the main cartel organization, left the decision up to its individual members. The Earthquake Commission had no more success in the Netherlands, Switzerland, Russia or Scandinavia. In Italy there was a muted response. Not until after the Messina earthquake of December 1908 did courts eventually accept the validity of the earthquake clause. In Spain, Portugal, France, Belgium, Germany and Austria-Hungary new earthquake regulations were adopted that did satisfy the Earthquake Commission. Yet this hardly amounted to a sea-change in international standardization before 1914, for only a small number of insurers from these countries operated on a global scale. Moreover, those European companies that did underwrite abroad were usually compelled to follow the lead of the British in accepting earthquake risks in overseas markets, or else face a loss of competitiveness and reinsurance facilities.??

According to R?der, several factors determined whether the earthquake clause was adopted or not. Where insurance was organized under public law, and conducted by public limited companies that were heavily dependent upon the German and Swiss specialist reinsurance companies to cover their surplus risks, insurers proved receptive to the Earthquake Commission?s proposals. This was also true of countries where the general terms and conditions of insurance policies were already subject to public revision, although in Italy this made companies less, not more, willing to embrace the model clause. Less convincing is R?der?s argument that the perception of earthquake risk was also a factor. In fact, the model clause was widely rejected by American and British companies insuring on the Pacific rim, while it was accepted by many German, French and Austrian companies who mainly wrote in their domestic markets where the earthquake risk was minimal or non-existent. In the world?s earthquake regions the chief barrier to the success of the Earthquake Commission, as R?der rightly points out, was market forces, although these are not fully examined in this book. In California, for instance, on the eve of the 1906 earthquake, foreign insurance companies wrote nearly 40 percent of sums insured against fire (net of reinsurance). Of this foreign market share, the British accounted for some 85 percent (my estimate based on insurance losses from San Francisco reported in Australian Insurance and Banking Record, 30 June 1906). The market power of the big British insurance exporters was such that they were easily able to resist German demands for a standard earthquake clause, once they had decided that such a clause was not in their business interests.

Whether R?der is accurate or not in viewing the earthquake clause of 1906 as a major step in the international standardization of insurance policy conditions, his general conclusion is convincing, namely that autonomous self-regulation by business, rather than state legislation, played the primary role in driving this process forward. That he finds this result ?remarkable,? ?surprising? (pp. 240-01) and ?hardly conceivable? (p. 1) perhaps reflects his own background as a German legal scholar steeped in civil code traditions. British and American historians would find it less surprising that the development of statute law lagged behind contractual practice in international business, especially in periods of rapid economic growth. After all, considerable transaction costs and efficiencies were at stake.

Regrettably, a couple of negative points must be raised about the presentation of the text. There are many references abbreviated in the footnotes that, frustratingly, do not appear in the bibliography. The English translation is also rather clunky and inconsistent in places, which may sometimes confuse the non-specialist reader. Nevertheless, these are minor glitches. This is a pioneering study that can be recommended to anyone interested in the history of international business and the contracts and legal standards that came to underpin it.

Robin Pearson is Professor of Economic History at the University of Hull, UK. He has written extensively on the history of insurance, business networks, social capital and corporate governance in journals such as the Economic History Review, Business History and Business History Review. His most recent book, co-authored with Mark Freeman and James Taylor, is Shareholder Democracies? Corporate Governance in Britain and Ireland before 1850 (University of Chicago Press, 2012). R.Pearson@hull.ac.uk.

Copyright (c) 2012 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (December 2012). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Published by EH.Net (March 2012)

Sharon Ann Murphy, Investing in Life:  Insurance in Antebellum America.  Baltimore: Johns Hopkins, 2010.  xii + 395 pp. $65 (hardcover), ISBN: 978-0-8018-9624-8.

Reviewed for EH.Net by Eric Hilt, Department of Economics, Wellesley College.

The first half of the nineteenth century witnessed a transformation of the American economy that some historians have termed the “market revolution.”  Financial markets and institutions played a central role in this process, as banks proliferated and securities markets deepened.  In addition, beginning in the 1820s, insurance companies began to offer American households life insurance policies.  Over the course of the nineteenth century, the business expanded rapidly, and by 1870 more than $2 billion in life insurance was in force in the United States.  The companies that underwrote these policies became important intermediaries within the financial system.

Sharon Ann Murphy’s Investing in Life tells the story of the development of the American life insurance industry through the 1870s.  Best characterized as a business history of antebellum life insurance, Murphy utilizes a rich variety of archival records from early companies, as well as newspapers and printed sources, in presenting her narrative.  The book focuses on the strategies employed by the industry’s entrepreneurs to surmount the challenges they faced in establishing and expanding the business.

And the industry faced a great many challenges in its early history. During the first half of the nineteenth century, no tables of mortality or life expectancy existed for the American population, and the vital statistics data necessary for the computations to produce such a table were generally not collected.  Rate-setting was therefore initially based on tables utilized by the English industry, combined with a fair amount of guesswork.  Also legal issues, such as common law restrictions on the ability of married women to enter into contracts, and uncertainty over the claims of a deceased person’s creditors on the payouts of life insurance policies to their families, impeded the industry’s efforts to market their products.  In response to these challenges, prominent figures in the industry worked with both the federal government and state governments to begin collecting mortality data, and to reshape the law in ways more friendly to the industry.

Cultural barriers were important as well.  Murphy persuasively refutes the notion that Americans’ religious beliefs were somehow incompatible with purchasing life insurance, as some scholars have suggested.  Nonetheless, the European experience with using life insurance policies to gamble on the duration of other people’s lives (or worse) made the American population initially reluctant to utilize the industry’s services.  The industry therefore adhered to strict standards regarding “insurable interest” – one could only insure the life of another if a financial interest in that person’s life, such as a debt owed from that person, could be documented.  And the industry emphasized the benefits of safety and security that a life insurance policy could offer to the growing ranks of salaried, middle-class household heads in their advertising campaigns.  As the composition of the population changed, the industry began to change the products it offered as well, for example creating low-cost “industrial” policies for working-class employees in the second half of the nineteenth century.

Although the earliest life insurance corporations were organized as stock companies, starting in the mid-1830s mutuals were created, and quickly dominated the industry.  Murphy argues that the success of the mutual model was not due to the lower rates they initially charged, or to other organizational advantages, but rather to a marketing advantage: the contracts of mutuals offered the appeal of a long-term investment, since the policy holders were entitled to a share of the accumulated profits from their premium payments.  The mutuals thus advertised themselves as “savings institutions” to the middle class, offering something more than insurance to households who might have considered an account with a savings bank. The stock companies responded in the 1850s by offering policies on mutual plans, and by offering tontine or “deferred dividend” plans.

Murphy argues that the Civil War was a watershed event in the industry’s development.  It profoundly disrupted the operations of Northern companies that had underwritten policies on the lives of people residing in Southern states, including some that had insured the lives of slaves on behalf of their masters.  But more importantly, it created an opportunity for the industry to market its services to the men who served in the War, and associate itself with the Union’s cause.  In the end the extremely high rates charged for these policies made them relatively unattractive, and few were sold.  But Murphy argues the industry benefitted from the war because “it revealed to Americans the benefits of insurance” (p. 274), while raising awareness of mortality.  New civilian policies did indeed grow rapidly during the War.

The Civil War created considerable uncertainty over rate-setting, and the industry’s trade association responded by setting an industry standard for war rates.  At least since the 1850s, prominent firms in the industry had attempted to coordinate rate-setting policies in order to reduce the competition they faced from new entrants.  The American states had also established a tradition of imposing high fees on out-of-state companies, in order to protect the underwriters located within their borders.  The industry sought to replace these state regulations with a system of federal regulation, and also challenged state laws that discriminated against out-of-state companies on constitutional grounds.  But in 1869, the Supreme Court ruled in Paul v. Virginia that insurance contracts underwritten by companies across state lines were not “interstate commerce,” and therefore fell within the legitimate purview of state law.

The book’s treatment of the managerial strategies employed in the industry, such as the development of the agency system, the content of the companies’ marketing campaigns, and the details of how different insurance products worked, are particularly strong.  This book makes a fine contribution to the study of the history of the insurance business.  My only criticism of the book is that its focus on management comes at the cost of excluding other questions of potentially great interest.  For example, insurance companies became enormously important financial intermediaries over the nineteenth century, but there is very little analysis or data on the firms’ investments or their role in the financial system.  And although some detail is provided on the content of state regulations of insurance companies, the political economy of these regulations is not explored, nor is much of a comparative perspective on these regulations presented.  Finally, the book mentions that waves of failures occurred in the 1870s, but relatively little attention is given to those events or to other collapses from earlier periods in the industry’s history, which to this reader seem as important as the successes.

Eric Hilt is Associate Professor of Economics at Wellesley College.  He is the author of “Rogue Finance: The Life and Fire Insurance Company and the Panic of 1826” (Business History Review, Spring 2009). Email:  ehilt@wellesley.edu.

Copyright (c) 2012 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (March 2012). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Published by EH.NET (May 2011)

Geoffrey Clark, Gregory Anderson, Christian Thomann, and J.-Matthias Graf von der Schulenburg, editors, The Appeal of Insurance. Toronto: University of Toronto Press, 2010. x + 247 pp. $50 (cloth), ISBN: 978-1-4426-4065-8.

Reviewed for EH.Net by Sharon Ann Murphy, Department of History, Providence College.

Perhaps reflecting twenty-first century concerns about risk mitigation, scholarly interest in the history of insurance has been booming of late.? The fruits of a larger conference on the insurance industry, the ten thought-provoking essays that comprise The Appeal of Insurance are certainly a part of this trend.? While editors Geoffrey Clark (State University of New York at Potsdam) and Gregory Anderson (University of Salford) broadly assert in the introduction that insurance ?shap[ed] contemporary economic institutions, techniques of government, mechanisms of social welfare, and patterns of thought,? the essays are all supposed to pivot around the more narrow concept of ?appeal? and its dual meanings of ?attraction? and ?entreaty? (p. 3).? Yet whereas this unifying thread is readily apparent in several of the essays, a few seem out of place in this volume.? Additionally, the thematic, geographic, and temporal scope of the essays are uneven; more than half focus on the British industry, more than half have their main focus on life insurance, and three-quarters are set in the eighteenth or nineteenth centuries.? While this imbalance does not take away from the quality of the individual essays, the volume might have told a more coherent overall story if the editors (who also include Christian Thomann and J.-Matthias Graf von der Schulenburg, both of Leibniz University, Hanover) had attempted to focus on specific insurance lines before the First World War, while casting their geographic net more widely (at least within Europe).? However, I suspect that this imbalance largely reflects the realities of current insurance historiography.

The essays in this volume that fit together best are those which address the lived experience of individuals who solicited insurance in response to a rapidly changing risk environment.? These essays focus on the timing of demand, the language used to understand the risk environment, and the behavior of insured individuals, pushing back against scholars who posit insurance as a purely rational risk-mitigating strategy.? In ?How to Tame Chance: Evolving Languages of Risk, Trust, and Expertise in Eighteenth-Century German Proto-Insurances,? Eve Rosenhaft (University of Liverpool) examines the participants in two eighteenth-century German widows? funds to demonstrate that risk-averse behaviors (such as joining an association to provide for your wife and children upon your death) were not mutually exclusive from risk-taking behaviors (such as trusting that this untested form of association would not fail before your family benefited from its protections).? As the nexus of trust shifted from providence to expert managers over the course of the century, Rosenhaft offers an intriguing argument that while the participants? understanding and expectation of risk evolved, the acquisition of this proto-insurance did not represent a conscious shift towards risk-aversion over risk-taking.

Robin Pearson (University of Hull) comes to a similar conclusion in ?Fire, Property Insurance, and Perceptions of Risk in Eighteenth-Century Britain.?? In complicating the idea that fire insurance was a rational response to the increasing risk of urban fires, Pearson asserts that this industry owed its growth as much to unempirical factors as it did to the emergence of concrete statistical knowledge, stating that people were both concerned ?about measurable risk and unmeasurable uncertainty, fortune and fate, fear and prudence, passion and reason? (p. 85). Most interestingly, he concludes that the risk-reducing strategy of buying fire insurance was not accompanied by other common-sense measures of fire prevention: ?Prudence was no more an outcome of insurance than it was a product of the science of prediction? (p. 98).

These questions of language and the understood conception of risk continue in Geoffrey Clark and Timothy Alborn?s essays, which both grapple with the moral quandary of placing a monetary value on human life.? In ?The Slave?s Appeal: Insurance and the Rise of Commercial Property,? Clark investigates the legal problems surrounding the underwriting of slaves (who were at once life and property) and how similar dilemmas later emerged with speculative life policies and insurance by wives on their husbands.? By ?knit[ting] economic actors together in novel ways … [s]uch socially degrading commercial contracts threatened not only to upend the established social hierarchy, but also to curtail the economic liberty of the self due to husbands, fathers, and masters? (pp. 67-68).? The paradoxical nature of insurance as both a moral good and an instrument of speculation is sustained by Alborn (Lehman College, City University of New York) in ?A Licence to Bet: Life Insurance and the Gambling Act in the British Courts.?? The highly-contested nature of the 1774 Gambling Act, which was intended to eliminate speculative life policies through ?the determination of a boundary between legitimate and illegitimate insurance,? revealed that the ?insurance market … appealed to all social classes because of ? not in spite of ? the fact that it often shaded imperceptibly into gambling? (p. 109).

While these four contributions mesh together extremely well, the second group of essays moves away from the lived experience of insuring individuals and instead focuses on the reciprocal relationship between the insurance industry and the state.? The essay ??The Rules of Prudence?: Political Liberalism and Life Assurance in the Nineteenth Century? by Liz McFall (Open University) serves as a transitional chapter between these two approaches.? While she also concentrates on issues of language, her focus on ?prudence? is not concerned with how this concept was understood by the insuring public. Rather, she is interested in the promotion of this notion by insurance companies, and how ?[n]ineteenth-century life assurance institutions traded their product in a manner that closely mirrored mainstream currents within Victorian liberalism? (p. 145).? For most of the remaining essays, the idea that ?[l]ife assurance was one of those techniques that seemed to spring up to fill the gap between liberal governmental theory in the abstract and the management of concrete social problems? (pp. 145-146) seems a more appropriate unifying motif than the individual experience with insurance.? For example, the essay ?Gottfried Wilhelm Leibniz?s Work on Insurance? by Schulenburg and Thomann is primarily concerned with the assertion by the seventeenth-century scientist and philosopher that ?the government has to install public insurance companies because the welfare of the people is increased if certain risks are securely covered by a public scheme? (p. 44).
???
Like McFall, Gregory Anderson?s interesting piece, ?Honesty, Fidelity, and Insurance in Eighteenth- and Nineteenth-Century England,? wrestles with the promotion of an idea through insurance ? this time the notion of fidelity ? and its relationship with governing principles.? As the legal system began to address the emerging problem of white-collar crimes, the insurance industry responded with the creation of fidelity insurance to ?provide protection against acts of dishonesty by trusted employees in public and private companies and by officers of state? (p. 151).? The demands of employers ? and in particular, the state itself who worried about the very real fiscal (and thus political) consequences of white-collar crimes within the growing bureaucratic ranks ? actively shaped the fidelity line. Yet as Anderson reveals, it was always unclear whether this new insurance product actually ?promote[d] commercial stability and security? (p. 160) or rather ?undermine[d] personal morality? (p. 161).
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This interwoven relationship between insurance companies and government actors is likewise apparent in the essays by Martin Lengwiler and Jer?nia Pons Pons.? Arguing in a vein similar to Anderson, Pons Pons (University of Seville) finds in ?Employers and Industrial Accident Insurance in Spain, 1900-1963? that both a constantly shifting legal environment and the demands of a corporate clientele significantly shaped the development of the accident insurance industry in Spain.? Private employers served as an intermediary of sorts between state-sanctioned requirements and the products offered by insurers: ?Although it is true that employers took out insurance due to the responsibilities the new law had recently obliged them to accept, they soon found advantages in the practice of insurance and, above all, in the control of the insurance process? (p. 202).? The greatest fear of both of these actors (the employers and the private companies) was that the state would proactively try to shape the insurance market. They perhaps feared the type of industrial order that Lengwiler (University of Basle) finds in ?Competing Appeals: The Rise of Mixed Welfare Economies in Europe, 1850-1945.? Lengwiler examines the impact of public insurance plans on the growth of the industrial insurance industry in England and Germany, and the health insurance industry in Germany and Switzerland.? Concerned more with institutional decision-making than the response of the insuring public to these competing plans, Lengwiler perceptively concludes that ?the growing appeal of insurance after the late nineteenth century was provided … by the competition and interaction between public and private actors within the insurance market? (p. 173).?
???
The final essay of the volume, ?Five Ironies of Insurance? by Aaron Doyle (Carleton University and BI Norwegian School of Management) and the late Richard Ericson (University of Toronto), initially appears to be the biggest outlier of the group, yet is actually the greatest missed opportunity on the part of the editors.? Doyle and Ericson reflect on the insurance industry as a whole from a modern perspective, noting ?fundamental paradoxes or tensions in the insurance institution itself? (p. 227) such as how an industry that initially emerged as a means of spreading risks now groups people into ever-smaller risk pools with dramatically different rate schedules, as well as the ?unforeseen and unintended consequences? (p. 233) of an ostensibly risk-reducing product that in actuality encourages risk-taking behaviors.? Rather than closing the book, Doyle and Ericson?s fascinating essay would have been an ideal framework for the entire volume, effectively demonstrating that the contradictions of the modern insurance industry have their roots in historical realities.? While the concept of ?appeal? only works well for a minority of the chapters, ?irony? captures the essence of the majority.? Thus although The Appeal of Insurance suffers from the weaknesses of most conference compendia , its strengths lie in the quality of its individual parts, each of which reflects a maturing historiography that is ready to grapple with the nuances of this essential industry.

Sharon Ann Murphy is the author of Investing in Life: Insurance in Antebellum America (Johns Hopkins University Press, 2010).? Reflecting her continued interest in the complex interactions between financial institutions and their clientele, her latest project is an investigation of the public perception of commercial banks during the early American republic.

Copyright (c) 2011 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (May 2011). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Published by EH.NET (August 2005)

Rachel Maines, Asbestos and Fire: Technological Tradeoffs and the Body at Risk. Rutgers, NJ: Rutgers University Press, 2005. xiv + 254 pp. $34.95 (cloth), ISBN: 0-8135-3575-1.

Reviewed for EH.NET by Mark Aldrich, Department of Economics, Smith College.

In this brief, lively, and thoroughly researched essay Rachel Maines, who is in the Department of Science and Technology Studies at Cornell University, embeds asbestos use in history. Her central thesis is that in modern times asbestos has saved far more lives from fire than it has taken via disease. On balance asbestos was therefore risk reducing. Economic historians have recently written on the causes of the western mortality transition, and this book is in that vein. It should interest all economic historians but especially those concerned with health, safety and the environment.

The book contains a preface, six chapters and two appendices — one a list of end uses of asbestos and the other a partial list of organizations that specified asbestos in codes or standards. There are also copious footnotes and an index but, irritatingly, no bibliography. The first chapter sketches broad themes. Maines reminds us of just how dangerous fires once were. There are two tables and a graph of fire deaths relative to population from 1900 through the 1980s and a brief history of the centrality of asbestos in fire prevention efforts. Not only is asbestos the gold standard of fire prevention materials it is also excellent insulation and Maines hints that for many years in many applications it had few good substitutes. Sprinkler systems might clog; in a hot fire, stone would crumble and iron or steel weaken, but asbestos was fireproof.

This history, Maines argues, is essential to understand the modern asbestos controversy. As she puts it “asbestos was evaluated between 1870 and 1964-1965 against a background of the problems it solved, not of those we were later to learn that it created” (p. 12). Citing Tversky and Kahneman, she notes that framing of issues can affect choices and the diminution of fire risks changed asbestos risk perceptions — a sort of worry homeostasis. Maines claims that those who argue “we should have known better than to use asbestos” (p. 20) are a-historical. Well into the 1940s environmental testing was primitive and medical literature is inherently conservative. It took disaster to yield silicosis regulation and the risks of lead were long known before it was banned from paint and gasoline. Asbestos risk was unclear well into the 1950s, she argues, whereas, fire risks were very clear.

The remainder the book is broadly chronological. Chapter 2 briefly discusses asbestos use from ancient times to 1880. Until the late nineteenth century high costs limited the asbestos market to high value products such as scientific filters. But with modern transportation and mining methods, prices fell after 1870 and asbestos use spread to boiler and pipe insulation, electrical insulation, roofing products and much else.

Chapter 3 discusses the innovation of asbestos curtains to prevent theater fires, the development of building codes, and the use of asbestos in ship construction. The author reminds us of the many disastrous theater fires. Since most originated on stage, a fireproof curtain could significantly reduce mortality, and she rehearses experiments with unsatisfactory alternative materials such as iron. She observes that inevitably and depressingly fire code enactment and enforcement came after such disasters. Beginning in the late nineteenth century the National Board of Fire Underwriters, National Bureau of Standards, National Fire Protection Association and other public and private groups developed codes. These were intended to reduce fire risks and mandated or urged asbestos use in a host of situations. After 1900 in most cities one could not obtain a building permit, or insurance, or a mortgage without using at least some asbestos.

Chapter 4, “Mass Destruction by Fire: Asbestos in World War II,” is misleadingly titled; it also discusses the increasingly use of asbestos during the interwar years as well as hotel fires. Chapter 5 discusses fire prevention after World War II in workplaces, schools and homes. The author again describes a number of horrors such as the 1958 Our Lady of Angels school fire in Chicago that took ninety-five lives. Then she again discusses the impact of these tragedies on local fire and building codes and ends with an extended discussion of the role of national safety organizations in developing model standards and codes that promoted asbestos use. While some of these were performance standards most were more or less specific. Asbestos was sometimes required (“vertical [heat] supply ducts had to be covered with ‘approved air cell asbestos'” (p. 146). Sometimes asbestos was one of several acceptable substances; sometimes it was asbestos “or other approved noncombustible material” (p. 145).

The last chapter is on “The Asbestos Tort Conflagration.” The author explains the tort explosion asserting that several key court cases “made it apparent that the legal profession had an unprecedented opportunity in the relatively helpless situation of American workers … with respect to health care for catastrophic illness” (p. 159). She then critiques the claim that there had been a conspiracy of silence on asbestos disease, provides a brief review of the medical and legal debate, and ends with summary observations of risks versus benefits and the claim that the asbestos claims mess demonstrates the need for national health insurance.

What to make of all of this? The major claim — that asbestos was central to the development of a fire safety system that sharply reduced risks in the years after 1870 and that it became deeply imbedded in professional and legal standards and codes — is convincingly argued. But was asbestos “indispensable”? Maines never fully addresses this but she strongly suggests that in many uses for a long time it had few good substitutes and I suspect that this is correct. She also argues that concerns over asbestos disease could not have occurred until fire risks had diminished. I doubt that tort law is that logical; indeed it has been criticized because it often fails to balance risks and benefits. The claim may have more substance if applied to asbestos regulation but curiously, Maines provides hardly any discussion of U.S., Canadian, or other regulatory efforts.

Maines is critical of the blithe assumption made by asbestos critics that there were lots of good substitutes; yet she never addresses the development of substitutes in the twentieth century and their relationship to the impact of asbestos regulation on fire safety. I was an economist working on asbestos regulation at OSHA in 1979-1980. I recall much interest in substitutes but little concern with fire safety. OSHA did not dare ban asbestos because there was then no known substitute for it in brake linings. (Maines notes that EPA actually did try to ban asbestos and was prevented by a court because of the absence of substitutes.)

The material on building codes is repetitious and the chapter on asbestos torts is too brief. I also wish Maines had provided more detail on the asbestos market. Tables on per capita consumption and end uses would be helpful, as would more information on prices. If the relative price of asbestos fell over a long period then its spread would have been into increasingly marginal uses, a situation that might undercut her claims for its importance. Her discussion of the Underwriters Laboratory Tunnel flammability test could be clearer. Although she notes that asbestos is still the zero point in the test, she fails to explain that the numbers products are assigned are indices and all comparisons are to red oak which is assigned a value of 100. Despite such quibbles for anyone interested in the history of health and safety this is a book worth reading.

Mark Aldrich is Professor of Economics at Smith College. He worked on the development of asbestos regulation at OSHA during 1979-1980. He most recent book, Death Rode the Rails, is a history of railroad safety and is forthcoming from Johns Hopkins University Press.

Published by EH.NET (June 2004)

Mark Tebeau, Eating Smoke: Fire in Urban America, 1800-1950. Baltimore: Johns Hopkins University Press: 2003. xi + 425 pp. $49.95 (cloth), ISBN: 0-8018-6791-6.

Reviewed for EH.NET by Dalit Baranoff, Department of History, Johns Hopkins University.

Scott Tebeau’s well-researched monograph is the latest to tackle the complex story of fire in urban America. Approaching the story from the perspectives of both firefighters and underwriters, he examines the struggles of both groups to bring conflagration, the great scourge of nineteenth-century America, under control. Through detailed investigation of two cities, case studies of two insurance companies, and a wealth of other evidence, Tebeau develops an interwoven story of gender, class, culture, and technology: contrasting the heroics of working-class firefighters with the rational order of middle-class fire underwriters.

Once a communal obligation, firefighting moved into the hands of a corps of volunteer firemen in the American city of the early nineteenth century. Using newly invented leather hoses and hand-pumped fire engines, the volunteers were able to douse fires more efficiently than bucket brigades. Fire companies developed distinct identities and elaborate costumes, and competed with each other through contests of physical strength and speed.

By the middle of the century, urban businessmen, fire insurers among them, were calling for paid fire departments. Viewing the working-class, ethnic volunteers as “disorderly,” they aimed to rationalize firefighting, much as the quantification of risk and the routinization of business practices had begun to do in fire underwriting. After initial resistance to professionalization and the adoption of new technologies such as the steam fire engine, firefighters instead sought to shape the new order to their advantage. Yet even as their departments became increasingly bureaucratized, they were able to carve out a new identity based on occupational specialization. Where firefighters had previously concentrated on putting out fires, by the late nineteenth century, they were increasingly concerned with using ladders and specialized equipment to save lives, and “eating smoke” to reach those trapped in burning buildings.

While firefighters physically battled fire, insurers strove to control its economic consequences through early attempts at actuarial science and the mapping of insurance risk. Only near the turn of the twentieth century did underwriters begin to advocate fire reduction through stronger building codes and the development of industry-wide standards.

Much of the history of firefighting is colored by myth. Early nineteenth-century firemen have been described as hooligans, more concerned with fighting each other than putting out fires. Tebeau offers a more moderate view, showing how volunteers were part of a culture that was reacting to the changes in work and community wrought by industrialization. Tebeau revisits the mores of the volunteers, a masculine, working-class, often ethnic milieu whose conception of virile manhood stood in sharp contrast with emerging middle-class concepts of rational and orderly masculinity. Mid-nineteenth-century middle-class society prized order and propriety. It was to the advantage of the advocates of professional fire departments to play up this image of volunteer firemen as rough and rowdy. The volunteers played a similar game of their own, depicting would-be paid firefighters as incompetent and lazy, and ethnic or racial inferiors.

In the end, rather than be replaced, many volunteers adapted to the new order. While previous historians have often drawn a sharp line between the volunteer forces of the early nineteenth-century and the “professional” fire fighters who followed, Tebeau shows that the change was not so drastic. Many individuals served in both forces. The development of paid fire forces did erode the distinct identities of different firehouses, creating a larger community of men bound by occupational identity.

That occupational identity also was closely bound to the technology that firemen employed. The author’s familiarity with the artifacts of firefighting and their use is impressively deep and consistent, and he successfully integrates it with the rest of the story. When steam engines eliminated the need for pumping, we learn, climbing ladders, scaling the sides of buildings, and performing daring rescues became the new marks of a firefighter’s ability.

Unmistakably, Tebeau chooses the firefighter as the protagonist of his story. The preface explains the identification; his father was a fireman. While the author grants fire underwriters much of the credit for the eventual control of urban fire, their story still comes across as something less than thrilling. Naturally, who wants to be an actuary when he grows up?

Viewed against the backdrop of firefighters’ manly physicality, Tebeau’s insurance men embody another ideal altogether: cool, cerebral, and one could even infer effete. Their main concerns were to manage the economic consequences of fire, and presumably, to earn a profit. Through the quantification of fire risk, underwriters reconceptualized fire in abstract, economic terms, taming it on paper. Tebeau describes the development of new tools that helped insurers reach this achievement: classification systems, standard procedures and forms, and representative technologies such as insurance maps.

To tell this part of his story, the author relies heavily on the records of two firms, the Aetna and the Insurance Company of North America, and also the records of the National Board of Underwriters. Unfortunately, neither firm was representative of the experience of the industry as a whole, and focusing on the national organization gives a misleading picture of the fire insurance industry in the second half of the nineteenth century, when local insurance cartels assumed the leading role in managing fire risk. In his study of Philadelphia and St. Louis, Tebeau takes notice of the local insurance boards, but concentrates almost exclusively on the local fire departments.

Overall, this text has been researched meticulously. The list of archival sources is impressive. An engaging narrative and a fascinating story make this book a rare pleasure — both an academic monograph and a good read. Of most immediate interest to historians of gender and urban America, it should also appeal to economic, business, and labor historians.

Dalit Baranoff recently received her Ph.D. in history from Johns Hopkins University where she completed a dissertation entitled “Shaped By Risk: The American Fire Insurance Industry, 1790-1920.” In addition to continuing her research on the insurance industry, she is also currently participating in a project documenting the Dot Com Era at the University of Maryland.