Cedric Stephens | A short history of insurance and slavery
ADVISORY COLUMN: RISKS & INSURANCE
‘Those who cannot remember the past are condemned to repeat it’ – a popular statement credited to philosopher and novelist Jorge (George) Santayana.
When an individual makes a mistake and does not learn from it, he or she usually ends up making the same mistake multiple times. Countries and businesses are no different.
Santayana’s words came to mind when I read a recent press release from the 332-year old revered insurance brand which, to this day, conducts business in Jamaica and other parts of the globe. The entity: Lloyd’s of London.
Lloyd’s publicly apologised for its role in “the 18th- and 19th-century slave trade. Slavery, it admitted, “was an appalling and shameful period of English history, as well as our own”.
The insurance exchange’s apology followed another mea culpa by The Bank of England. The latter regretted its “historic links to slavery”, and, according to Fortune, promised “to ensure that no images of former bank officials who owned slaves or profited from slavery are on display”.
Lloyd’s was founded in a coffee shop and grew into an insurance powerhouse. The magazine said that insurers there underwrote insurance policies on voyages transporting slaves as well as commodities such as sugar, coffee, and cotton, which slave labour produced.
‘Voyages transporting slaves’ is a polite way of saying that insurers at Lloyd’s offered policies so that traders who bought slaves and lost them during the journeys from Africa to the New World would not suffer financial losses. How could Lloyd’s and the industry in which it continues to play an important part, founded on the noble theory of uberrima fides − the utmost good faith − have made such an epic error of judgment?
Was it only about making money despite the corrupt nature and cruelty of the enterprise? Are there lessons to be learned by those whose ancestors were slaves and who now lead local insurance entities or those who regulate it?
Slaves were considered, generally, as cargo. They were insured in the same manner as livestock. These facts were omitted from the marine and other insurance texts that I studied in England. None of the many Lloyd’s members that I knew, including one former chairman who received a knighthood for his services to the industry, shared this part of the institution’s nasty past with me, a descendant of slaves who survived the long voyage.
Lloyd’s resisted attempts by US descendants of slaves 20 years ago to pay reparations for their involvement in and for profiting from the slave trade. Its apology this year came with a pledge to “recruit, retain, and develop more black and minority ethnic participants and provide financial support to charities and other organisations promoting diversity and inclusion, among other steps.” Is Jamaica likely to receive any of these reparations?
Between 33 per cent and 40 per cent of London’s marine insurance premiums in the 18th century “was accounted for by the slave trade and by the movement of slave-grown produce across the Atlantic", said Nick Draper, former director of the Centre for the Study of the Legacies of British Slave-ownership in a recent interview.
5 key findings from slavery research
My education about the previously untold history of insurance also led me to an article in The Journal of Economic History, Volume 79, Issue 2, titled ‘Insuring the Transatlantic Slave Trade’ and written in June 2019 by two University of Hull professors. Below are some of their findings:
• The growth of British marine insurance was largely dependent on insuring slaving and its related trades;
• There is not a hint in any of the papers that were studied that slaves were regarded by those involved in the buying and selling of slaves as anything other than a cargo of goods;
• During 1784 to 1793, the decade in which there was a general recognition of the humanity of slaves was supposed to have occurred, the most frequent term in the trade for a slave cargo was ‘parcel’.
The real or insured value of a ‘parcel’ was determined by the ethnicity, size, height, age, gender, state of health, and physical appearance of the slaves comprising the ‘parcel’ at the time of sale, together with the arithmetic of external factors in the market concerned, primarily the supply of and demand for slaves, the state of the sugar crop, and the state of planters’ credit at the time of a ship’s arrival, minus the cost of purchase on the African coast and the cost of provisions on the middle passage;
• Insuring transatlantic slave voyages from the perspective of underwriters, brokers, and merchants was that it was a generally unexceptional business; and
• Among those directly involved in the trade, slaves were commonly regarded as animate and perishable goods and no more than that. Even where the welfare of slaves — their diet, quality of provisions, medical treatment — was critically remarked upon by traders, factors, and masters (of vessels) in private business correspondence, it was only ever in the context of protecting the value of an asset, with a view to achieving a high average price at sale.
Some historians link the development of life insurance in the United States to the industry’s success in introducing and selling slave insurance in the 19th century. The coverage protected the long-term value of slaves and benefited slave owners. This was similar to livestock, insurance that protects farmers’ investments in animals like racehorses and cattle.
In part two of this article, I will explore, in the words of one of Jamaica’s leading thinkers, why local practitioners "in this great future, you can’t forget your past".
Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: firstname.lastname@example.org