AHC: Monarchs Get into Insurance

Thinking about the rise of modern insurance during the 16th-18th Century period (like maritime insurance, property insurance, etc), and a question occurred to me -- if making insurance reliably profitable is based on spreading risk, then it stands that the more capital (or credit, etc) an insurer has to back up their claims, the more policies they can take on, and the more reliable their profits. That also means that then as now, small insurance pools can easily bankrupt an insurer, while the ones who were richer to start with can more easily compound their wealth.

So my question: Did any monarch of this period ever think to himself, "I can get in on that". After all, they've got some of the most readily available cash around (and what they lack, they can tax or borrow easily enough), so start-up capital isn't a problem. If no monarch ever did, why not? And what would it have taken for them to try? How would political economic history be affected? After all, the logic behind having a "royal maritime insurance program" has a lot of similarities to that behind modern ideas like UHC.
 
Thinking about the rise of modern insurance during the 16th-18th Century period (like maritime insurance, property insurance, etc), and a question occurred to me -- if making insurance reliably profitable is based on spreading risk, then it stands that the more capital (or credit, etc) an insurer has to back up their claims, the more policies they can take on, and the more reliable their profits. That also means that then as now, small insurance pools can easily bankrupt an insurer, while the ones who were richer to start with can more easily compound their wealth.

So my question: Did any monarch of this period ever think to himself, "I can get in on that". After all, they've got some of the most readily available cash around (and what they lack, they can tax or borrow easily enough), so start-up capital isn't a problem. If no monarch ever did, why not? And what would it have taken for them to try? How would political economic history be affected? After all, the logic behind having a "royal maritime insurance program" has a lot of similarities to that behind modern ideas like UHC.

I have no idea whether that happened or not, but I'd add that there are quite a few cases were a regulated, general requirement to take on insurance can actually be beneficial for the economy. In particular, the King could issue that maritime insurance is a requirement and that each and all merchants have to participate in the royal insurance. Combination of regulatory, legislative and economic power therefore provides income to the King - and also helps trade.
 
While it does sound like a good idea, I can think of a few reasons why not.

But one of the most striking - monarchs didn't actually have a lot of ready cash, and depending on the monarch often had a poor credit rating. So it might be easier said than done for any given monarch - let's say just for the hell of it Charles II - to actually start up this sort of enterprise.


I don't think it couldn't be done in an ATL necessarily - but that makes introducing it as an initial change to OTL tricky.

Would be interesting to see how, for those kings who could make it as an offer, it would work out - it is a potential source of revenue, and it forces the monarch to pay attention to the flows of commerce in order to keep this successful (even if the monarch just appoints someone else to do it, its still forced to be on the royal radar that merchants have a role and interests).

That might encourage developing more liberal monarchy down the road. Not directly, but a monarch whose interests are tied to the middle class might be more willing to work with them when still its a matter of compromise and not confrontation.
 
What he said, And also, I find it hard to imagine an monarch in the 1600-1800 timeframe whose subjects trusted him enough to voluntarily give him money. The early modern European state was not known to release money once collected easily or quickly.
 
What he said, And also, I find it hard to imagine an monarch in the 1600-1800 timeframe whose subjects trusted him enough to voluntarily give him money. The early modern European state was not known to release money once collected easily or quickly.

And it would be far too easy to make this look like a program of forced loans imposed on them, even if that's not the intent.
 
And it would be far too easy to make this look like a program of forced loans imposed on them, even if that's not the intent.

Excuse my stupidity, but didn't the prince de Condé make a killing when John Law's Mississippi Bubble burst? It bankrupted a lot of other people who had to return their money, but because he was who he was, nobody forced him to cough up
 
But one of the most striking - monarchs didn't actually have a lot of ready cash, and depending on the monarch often had a poor credit rating. So it might be easier said than done for any given monarch - let's say just for the hell of it Charles II - to actually start up this sort of enterprise.
What he said, And also, I find it hard to imagine an monarch in the 1600-1800 timeframe whose subjects trusted him enough to voluntarily give him money. The early modern European state was not known to release money once collected easily or quickly.
And it would be far too easy to make this look like a program of forced loans imposed on them, even if that's not the intent.

Well, that does clear a few things up...
 
Excuse my stupidity, but didn't the prince de Condé make a killing when John Law's Mississippi Bubble burst? It bankrupted a lot of other people who had to return their money, but because he was who he was, nobody forced him to cough up

Quite possibly, my knowledge of the details of how that worked out are a little sketchy.
 
Excuse my stupidity, but didn't the prince de Condé make a killing when John Law's Mississippi Bubble burst? It bankrupted a lot of other people who had to return their money, but because he was who he was, nobody forced him to cough up

Yes, he did, but that was banking and fiat money not insurance.

There are a number of issues around state insurance.

Of the main types of insurance:

Fire and disaster. Not very attractive before about C19. Too risky (think Great Fire of London), and not really a good business proposition until the idea of building codes caught on. And in most of Europe the population density just wasn't big enough

Maritime. The problem with this was that until C19 maritime insurance was extremely corrupt and dodgy. False cargoes, false bills of lading, rotten ships deliberately sent out to sink, a cesspit of covin and fraud. Add in the vagaries of sail age shipping, the fact the captains had no formal qualifications, and were of very varied personal capability (is he permanently drunk? is he an idiot? ). An insurer needed to personally understand the sea and have maritime contacts, or have very close connections who did. And, of course the country had to have a large merchant fleet.

Life insurance. This was the one that really created the insurance industry. But, it can't happen until someone invents demographics and statistical theory, within a robust mathematical model, which didn't happen OTL until C19.

And in most states, involvement by a prince in such matters would have been considered improper and demeaning.

I have a notion that some of the Medicis may have been involved in proto-insurance, but otherwise, the only states where I could see it happening would be England or the Netherlands.

As others have noted, princes didn't usually have much capital. And what they did have was usually in the form of land, which is very non-liquid. So state insurance more or less presupposes a state bank and fiat money. And everybody who tried that , except England and the Netherlands , went gloriously tits-up, like M. Law, because they didn't understand collateralisation.
 
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