Who are underwriters?

Underwriters are people that write under something. Well, sort of. But rather than just writing under something, they sign their name under some risk information. The term dates back to the early days of marine insurance in the 17th century.


Lloyd's Coffee House was a coffee house in the center of the maritime district in London. It was located right next to the watchmaker, Finch.

In the coffee house gathered sailors, merchants, and shipowners. Discussions revolved around shipping and foreign trade. The customers came to hear the news, catered to them by Edward Lloyd, the owner. Ships and shipping lots were auctioned off in candle auctions. And it was the venue for maritime business. The place to get your ship insured.

Sea voyages were a risky business. Shipwrecks meant the loss of ship, cargo, and crew. Shipowners wanted to protect themselves against such losses. So they did; in exchange for a premium. All pertinent information regarding the risk and the insurance terms and conditions were written on a slip. When an underwriter decided to take on that risk, the percentage and pricing were recorded. And of course, signed below. Hence, the term, underwriter.


Candle Auctions

Candle auction starts when a short stub cande is lit. The bidding goes on until the flame dies out. And the last bid was the winning bid.

Candle auctions were popular in the period and are in some ways still in use today. Candles ensured that no one could exactly know when the auction would end and enter a last-second bid. They prevented auction snipers and encouraged serious bids from the start of the auction.

Lloyd's and The Titanic

Lloyd's or more precisely Lloyd's of London is still present today and it has been for 335 years. As I was researching underwriters and consequently Lloyd's, I found an interesting tidbit. Lloyd's was one of the insurers of the Titanic. You can read the story in the TITANIC CENTENARY. I find it amusing that the premium rate was low on the account that the ship was "unsinkable".


You can see this page's source written in Touch and the config used.