Royal Exchange Assurance Corporation
Encyclopedia
The Royal Exchange Assurance Corporation, founded in 1720, was a British insurance
company. It took its name from the location of its offices at the Royal Exchange, London.
reported against this. Lord Onslow
then sought a means of avoiding the difficulty by his company acquiring the charters of Society of Mines Royal
and Company of Mineral and Battery Works
, which declared itself open for assuring ships and merchandise in March 1719. Their opponents petitioned against this and the Attorney-General reported in May 1719 that the use made of the charters was "unwarrantable". The directors admitted this mistake but requested their own charter in January 1720. They and another insurance enterprise each offered £300,000 towards the king's Civil List
debts. The king then encouraged the House of Commons to permit their incorporation. This was done in the Bubble Act
. The new chartered company then accepted subscriptions paid on shares in the old company in payment for those on its own shares.
under the Royal Exchange and London Assurance Corporation Act 1719, popularly known as the Bubble Act
. Under the terms of this legislation, the Royal Exchange and the London Assurance Company were the only incorporated bodies chartered to write marine insurance
. Although this eliminated competition from other corporations, private underwriters, such as those at Lloyd's of London
would remain in business. This arrangement continued until the repeal of the act, in 1824.
in 1968.
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
company. It took its name from the location of its offices at the Royal Exchange, London.
Origins
Royal Exchange Assurance emerged out of a joint stock insurance enterprise known as Onslow's insurance or Onslow's Bubble. This had been begun as the Mercer's Hall Marine Company, or Undertaking kept at the Royal Exchange for insuring ships and merchandise at sea. A similar enterprise sought incorporation in 1718, but the Attorney-GeneralAttorney General for England and Wales
Her Majesty's Attorney General for England and Wales, usually known simply as the Attorney General, is one of the Law Officers of the Crown. Along with the subordinate Solicitor General for England and Wales, the Attorney General serves as the chief legal adviser of the Crown and its government in...
reported against this. Lord Onslow
Thomas Onslow, 2nd Baron Onslow
Thomas Onslow, 2nd Baron Onslow commissioned the building of Clandon Park in the 1730s.He became 2nd Baron Onslow on the death of his father, Richard Onslow, in 1717...
then sought a means of avoiding the difficulty by his company acquiring the charters of Society of Mines Royal
Society of Mines Royal
The Society of Mines Royal was one of two mining monopoly companies incorporated by royal charter in 1568, the other being the Company of Mineral and Battery Works.-History:...
and Company of Mineral and Battery Works
Company of Mineral and Battery Works
The Company of Mineral and Battery Works was, , one of two mining monopolies created by Queen Elizabeth I of England in the mid-1560s. The Company's rights were based on a patent granted to William Humfrey on 17 September 1565. This was replaced on 28 May 1568 by a patent of incorporation, making...
, which declared itself open for assuring ships and merchandise in March 1719. Their opponents petitioned against this and the Attorney-General reported in May 1719 that the use made of the charters was "unwarrantable". The directors admitted this mistake but requested their own charter in January 1720. They and another insurance enterprise each offered £300,000 towards the king's Civil List
Civil list
-United Kingdom:In the United Kingdom, the Civil List is the name given to the annual grant that covers some expenses associated with the Sovereign performing their official duties, including those for staff salaries, State Visits, public engagements, ceremonial functions and the upkeep of the...
debts. The king then encouraged the House of Commons to permit their incorporation. This was done in the Bubble Act
Bubble Act
Bubble Act 1720 was an Act of the Parliament of Great Britain that forbade all joint-stock companies not authorised by royal charter. It was passed on 9 June 1720, and was also known as the Royal Exchange and London Assurance Corporation Act 1719, because those companies were incorporated under...
. The new chartered company then accepted subscriptions paid on shares in the old company in payment for those on its own shares.
Chartered company
The company received its royal charterRoyal Charter
A royal charter is a formal document issued by a monarch as letters patent, granting a right or power to an individual or a body corporate. They were, and are still, used to establish significant organizations such as cities or universities. Charters should be distinguished from warrants and...
under the Royal Exchange and London Assurance Corporation Act 1719, popularly known as the Bubble Act
Bubble Act
Bubble Act 1720 was an Act of the Parliament of Great Britain that forbade all joint-stock companies not authorised by royal charter. It was passed on 9 June 1720, and was also known as the Royal Exchange and London Assurance Corporation Act 1719, because those companies were incorporated under...
. Under the terms of this legislation, the Royal Exchange and the London Assurance Company were the only incorporated bodies chartered to write marine insurance
Marine insurance
Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination....
. Although this eliminated competition from other corporations, private underwriters, such as those at Lloyd's of London
Lloyd's of London
Lloyd's, also known as Lloyd's of London, is a British insurance and reinsurance market. It serves as a partially mutualised marketplace where multiple financial backers, underwriters, or members, whether individuals or corporations, come together to pool and spread risk...
would remain in business. This arrangement continued until the repeal of the act, in 1824.
Amalgamation
Royal Exchange survived as an independent company for over two centuries until merging with the Guardian Assurance CompanyGuardian Assurance Company
The Guardian Assurance Company was a very large British insurance company.-History:The Company was originally established in 1821 as Guardian Fire & Life. In 1902 it was renamed the Guardian Assurance Company....
in 1968.
Governors
Notable governors of the Royal Exchange Assurance Corporation included:- Pascoe GrenfellPascoe GrenfellPascoe St Leger Grenfell was a British business man and politician.-Biography:He was born at Marazion, in Cornwall. His father and uncle were merchants in the tin and copper business. Grenfell studied at Truro Grammar School before joining his father's business in London...
(1829–1838) - Thomas TookeThomas TookeThomas Tooke was an English economist known for writing on money and his work on economic statistics. After Tooke's death the Statistical Society endowed the Tooke Chair of economics at King's College London, and a Tooke Prize.In business, he served several terms between 1840 and 1852 as governor...
(1840–1852) - Octavius WigramOctavius WigramOctavius Wigram was an English business man and ship owner in the City of London, a member of Lloyds and Governor of the Royal Exchange Assurance Corporation.-Life:...
(1852–1878) - Vivian Smith, 1st Baron BicesterVivian Smith, 1st Baron BicesterVivian Hugh Smith, 1st Baron Bicester was a British merchant banker.Smith was the son of Hugh Colin Smith and Constance Maria Josepha , and grandson of John Abel Smith. He was educated at Eton College and Trinity College, Cambridge...
(1914–1956) - Hugh Kindersley, 2nd Baron Kindersley (1955–1968)