The Hardin tribune-herald., 1945-03-08
First Fire Insurance
Company in U. S. Was
Founded Isl Years Ago

Early American colonists insured
against fire and other risks in Lon
don. The first share capital fire in
surance company was established in
1904, Isl years ago. The new re-
public was only five years old when
two new companies owned by share
holders received charters from their
home state of Pennsylvania to
write fire insurance. Those COM
panies are still in business, and "a
other American insurance COM
panies, active today. have been
writing property insurance more
than 100 years.
Some states encouraged the de-
velopment Of fire insurance within
their own borders. In the early
1800s, Pennsylvania and New York
had laws excluding foreign COM
panies. and Pennsylvania in 1929 for
bade writing of insurance there by
companies organized outside the
state. Stock companies were at
tempting to start agency systems
outside their home states, but this
move made no great headway until
30 years later. In the 1866, both
the agency system and regulation Of
companies by state insurance de-
partments began to develop rapidly.
Huge Loss Spurs Growth.
The trend toward this growth was
stimulated by a disastrous fire in
New York in 1885 which necessitated
the payment of large losses and
ruined some New York companies.
One Connecticut company which is
still in existence had total losses,
after settling claims in this con-
fagration, amounting to $4,000,
twice the amount of premiums COL
lected in 1885 from all states in
which this company did business.
The catastrophe of 1885 provided
a tragic but persuasive reminder of
the shortsightedness of restrictive
legislation and it caused the states
to welcome sound fire insurance
companies from other states and
from abroad, whose risks were
spread over large areas. This fire
also demonstrated the wisdom of
geographic dispersal of liability for
losses, and directed attention to the
necessity of maintaining company
reserves large enough to meet nor.
NAL anticipated losses, as well as
the Importance of being prepared
for possible catastrophe losses.
Doubles Every Decade.
The growth of fire insurance busi-
ness in the 10th century parallels
roughly the expansion of the United
States. BY the middle of the GEN.
tury, in 1854, IS fire insurance COM
panies were reporting to the authori-
ties in the state of New York. The
annual volume of fire premiums re-
ceived by these companies-that is,
premiums received in all states in
which the companies operated
more clearly illustrates the growth
of fire insurance business in the
United States than any other data.
Starting with 1859, when premiums
of some is million dollars were re-
ceived by companies reporting to
the Insurance department of New
York, the annual volume doubled in
every successive decade or less un-
til around 1920. Total premiums re-
ceived in 1920 were 759.5 million
dollars. They eased off more than
100 million dollars the following
couple of years and then rose ir-
regularly to peak of 1893 million
dollars in 1929. In the decade of the
1930s they tended to follow the
economic trend downward. There
was an upturn in 1884, then a level
period lasting four years. In 1889
the upward trend was resumed.