). see also thoyts ( 2010 ). clayton ( 1971 ). see also, bernstein ( 1996 ). bis central bankers ’ speeches the practice of bottomry flourished due to the proximity of another group of great traders – the phoenicians, who adapted the basic concept to support trade expansion on the greek coastline during the 10th and 9th centuries b. c., and to the increasing domination in the aegean sea after 800 b. c. of greek traders who needed indemnity against their cargo. hop westward across the mediterranean sea to ancient rome, and citizens were paying subscriptions to so - called “ burial societies ” to cover the cost of expenses associated with their death – a kind of latter - day funeral insurance. this activity evolved such that by the second century a. d. it became common practice instead to pay the relatives of the deceased person a lump sum ( the funeraticium ), provided their subscription was not in arrears and the deceased had not committed suicide 3. despite not being labelled as such, this arrangement seems in some way similar to a modern - day life insurance policy. and yet back then, perhaps unsurprisingly, the subscriptions paid by members were not subject to any protections or oversight – indeed, when a burial society did run out of money, it was commonplace simply to issue a notice to convey the demise of the society and the fact that funeral expenses would no longer be met. there is also evidence that soldiers in the roman army were paid a lump sum at retirement, despite the fact that contributions were not made throughout the soldier ’ s lifetime. by medieval times, the church had become one of the largest employers and had started occasionally to issue pensions to clergymen. one such example involved nicholas thorne, a former abbot of st augustine ’ s monastery, who was living in difficult circumstances. thorne had voluntarily retired, apparently stricken by a guilty conscience after he acquired some documentation on behalf of the abbey through bribery at the court of rome. the scandal led him to retire to an ordinary monastery in yorkshire, but when his old comrades heard of his infirmity and weakness, they awarded him an ex gratia pension of 10 marks a year 4. it seems unlikely that the church extended such gestures on a regular basis, but from this point onwards we can see evidence of pension provision via employers ( the church and king ), particularly for notable individuals in society where reliance on charity alone would not suffice. such examples are not

commit underwriters to prison if they failed to meet their obligations 7. in 1575, the privy council ordered the lord mayor to compile some rules since no body of law existed to determine the resolution of insurance disputes. around the same time, queen elizabeth granted a monopoly on the writing of assurance policies to richard candeler, who led the newly - created office of assurances. the office introduced a system of fees – with the office receiving a fixed percentage per £100 insured 8 – for the production of physical written policies. both through the creation of the office and court of assurances, and the receipt of customs duties from insurers, the privy council in the 16th century – as approved by the monarch – cemented the role of the state in exercising a judicial function and creating an environment of policy registration and anti - fraud conducive to commerce. so, as i see it, this first phase of engagement between the british state and the insurance sector was effectively a trade : dispute resolution services were provided by the state, and insurers contributed some revenue to it in return. indeed, in the early stages this revenue went directly to candeler himself. despite the tight state controls around who could write insurance, the nature of risks being underwritten was granted little oversight – so much so that, for many, the practice of insurance became synonymous with gambling in the 18th century. perhaps – and i say this with some trepidation here at lloyd ’ s – some of the most egregious examples of such behaviour were evident in the marine market. by this point, london had emerged as a centre of excellence in marine risks, due partly to its strategic location on famous shipping routes. marine insurance had become a necessity for trade – without protection, a bad storm could overturn the entire fortunes of merchants. but a lack of safeguards paved the way for abuse. one particularly spectacular example involved john mcdougall, a glaswegian merchant, who arranged to have a ship called friends ( whose cargo was valued at £1000 ) deliberately shipwrecked off the coast of denmark – but not before insuring his own stake in the voyage in five separate policies for £3, 475 and insuring the ship and other goods for £1, 660 in a further three policies. in total, he obtained eight policies on the same risk – spreading the deceit between unsuspecting underwriters across glasgow, dundee, hull and london. in doing so,