Underwriters of the United States: How Insurance Shaped the American Founding

by Hannah Farber

Unassuming but formidable, American maritime insurers used their position at the pinnacle of global trade to shape the new nation. The international information they gathered and the capital they generated enabled them to play central roles in state building and economic development. During the Revolution, they helped the U.S. negotiate foreign loans, sell state debts, and establish a single national bank. Afterward, they increased their influence by lending money to the federal government and to its citizens. Even as federal and state governments began to encroach on their domain, maritime insurers adapted, preserving their autonomy and authority through extensive involvement in the formation of commercial law. Leveraging their claims to unmatched expertise, they operated free from government interference while simultaneously embedding themselves into the nation's institutional fabric. By the early nineteenth century, insurers were no longer just risk assessors. They were nation builders and market makers.

Deeply and imaginatively researched, Underwriters of the United States uses marine insurers to reveal a startlingly original story of risk, money, and power in the founding era.

Genres: History, Nonfiction, Economics, Business, American, Audiobook, Politics

352 pages, Hardcover

First published January 1, 2021

Reviews

[Michael Reilly · Rating 4 out of 5]

This is a fascinating history of the rise of the American marine insurance industry. (It is possible that as an insurance professional with an interest in early American history, I am the target audience for this book.)

Ships were the most expensive mobile technology in the 18th century. They were the equivalent of our largest intercontinental jets. They could not get financing unless they could get insurance.

The Italians and then the Dutch and then the English had developed a sophisticated marine insurance market by the 1770s. Individuals or companies underwrote, or insured, ship and cargo as it sailed around the world.

Prior to the American Revolution most American shipping was insured in London. There was a small American marine insurance industry consisting of small groups of merchants who acted as underwriters for small companies in cities along the Eastern Coast. Boston, New York and Philadelphia were the main markets.

American ship owners were knocked out of the London market when the Revolution broke out. It was illegal for English insurers to insure enemy ships.

The American insurers stepped up. The insurance risks were high. English ships were capturing and sinking American ships. American privateers who raided English ships also needed insurance. The number and size of American insurers ballooned. Premiums jumped as high as 40%.

American shipping and privateering deserve much credit for winning the revolution and insurers made it possible. On the other hand, Farber outlines the accusations that insurers were gouging on fees, abusing their power and corrupting politicians.

After the war the marine insurance industry boomed. Faber shows how the industry continually played the game of insisting it was a private for-profit industry that should be left alone, when it wanted to be left alone, and then explaining how it was a key part of American security and financial wellbeing, when it wanted to be protected. This is, of course, a trick which continues to this day.

This is a deeply researched and well written history. Faber has found a treasure trove of business records and ledgers from the period. She has an impressive feel for how the industry works which allows her to explain what the various players were up to at various times.

If you are interested in insurance and history, this is the book for you.

[Casey · Rating 5 out of 5]

A great book, providing a history of the American maritime insurance industry from its colonial era origins through to the mid-19th century and its importance in promoting the security of the young U.S. The author, political economic historian Hannah Farber, delivers a very readable and insightful study on the institutionalization of maritime insurance as a distinct industry in the U.S. Farber argues that these insurers, while astutely building their own businesses, also “insured” the young U.S. by both explicitly underwriting government through bond purchases and implicitly establishing a solid global commercial reputation. Farber is very realistic in her appraisal, quick to point out the negative acts of insurers, both as a whole and individually. Yet she also shows these insurers as a key enabler of early U.S. security and stability. I especially appreciated the deep research that lies behind the book’s thesis and the author’s ability to clearly explain the role insurance has in conflicts between maritime powers. Highly recommended reading for anyone interested in the ways private insurance transactions affect the geo-political interactions of great powers.

[Tracie Hall · Rating 4 out of 5]

*Note: The Goodreads link from the search results took me to an error page, so I tried removing part of the link characters (from true on) and landed on a good page for the title, but one with no link to other editions. I didn't read this print version. I listened to the audio version.

"Underwriters of the United States” by Hannah Farber
BIBLIOGRAPHIC DETAILS
PRINT:
© 2021, November 23; 978-1469663630; Omohundro Institute and UNC Press; 352 pages; unabridged (Info from Amazon)
DIGITAL:
© 2021, October 28; Omohundro Institute and UNC Press; 343 pages; unabridged. (info from Amazon)
(*this one)-AUDIO:
© 2024, June 11; Tantor Audio; 10 hours 59 min. duration; unabridged. (info from Amazon)

FILM:
No.

CHARACTERS: (Not Comprehensive)
N/A

SERIES: No

SUMMARY/ EVALUATION:
SELECTED:
Since it’s new as an audiobook, I’m thinking I must have seen an advertisement for it someplace, as I can’t recall how I came by listening to this one.
ABOUT:
The book is quite thorough in its recounting of the history of marine insurance and the intricacies of carrying on business despite war.
OVERALL OPINION:
I loved learning about those who were instrumental in financing the shipment of goods, and all the sundry particulars. The material is a bit dry in my opinion, so I needed breaks and to re-listen to sections.

AUTHOR:
Hannah Farber (From Columbia.edu)
“Professor Hannah Farber specializes in the political economy of colonial North America, the early American republic, and the Atlantic World.
Her first book, Underwriters of the United States (Omohundro Institute of Early American History and Culture/UNC Press, 2021) explains how the transnational system of marine insurance, by governing the behavior of American merchants, influenced the establishment and early development of the American republic.
Her current book project is The American Lawsuit: Civil Litigation from the Revolution to Tocqueville.
Additional research interests include early American interest rates and the visual and material culture of American commerce.”

NARRATOR:
Linda Jones (From narratorlist.com)
““An indispensable actor of exceptional power, nuance & range.” ~Brad Rosenstein, SF Bay Guardian
Linda Jones is an award-winning narrator and NYC actor with a penchant for dark edges and curious truths. Weaned on du Maurier and Hitchcock, Kafka and Poe—tales of mystery, adventure and intrigue spawned a decades-long career with writers in new work, development and narration. She has narrated for Penguin Random House, Recorded Books, Audible Studios, Tantor and Dreamscape, as well as a variety of independent authors and publishers. She won the Independent Audiobook Award (IAA), Best Horror, for her performance of Crossroads by Laurel Hightower, for which she was also a finalist for Best Female Narrator. She was also a finalist for the IAA in Nonfiction. She is an acting, voice & speech and dialect coach. She has a BFA from Ithaca College. She lives in Brooklyn with her husband—noted horror writer John C. Foster, their rescue dog Coraline—a Dutch Shepherd/Pitbull mix, and an apartment filled-to-bursting, floor-to-ceiling, corner-to-absolute-corner with books.

GENRE:
Nonfiction; Economic History

SUBJECTS (Not comprehensive):
Insurance; Founding Fathers; US Revolution;

DEDICATION:
“To my teachers”

EXCERPT
From “Prologue”:
[upper case] “A COMPOSITE NARRATIVE OF A VISIT TO THE MARINE INSURANCE OFFICE, 1800” [end of upper case]
[Italics] “The President and Directors of the . . . Insurance Company, Agreeably to the act of their Incorporation, inform the public . . . [that they are] ready to receive Proposals at their office. __Boston Gazette, Mar. 9, 1801
Applications may be made in the usual form.
__New York Evening Post, Nov. 20, 1801 [end of italics]
[upper case] YOUR PLAN [end of upper case]
It is August of 1800. Now is certainly not the safest time for a Boston merchant to be sending a trading vessel down to the Caribbean, but then again, it’s been worse. You’ve been reading the newspapers and corresponding with your business partners overseas, so you know that the French Revolutionary Wars seem to be heading toward a lull in the region. Great Britain, with its armies ravaged by yellow fever and its spirits shaken by French slave emancipations, has given up on conquering Caribbean islands for the moment and is shifting its resources toward the war in Europe. The United States government has put twenty-three naval ships into operation to protect its merchant fleet and is actively negotiating with France to rein in that country’s own predations on Americans. Your government has also given you legal permission to put a few guns on your vessel.1 On the other hand, there are still plenty of naval vessels and privateers of various nationalities out there, and they carry a [italics] lot [end italics] of guns. They have the power to detain you, rob you, or force you through lengthy court proceedings to prove that your trade isn’t benefiting their enemies or violating international law. Therefore, you have decided, you had better acquire an insurance policy for the [italics] Eagle [end italics].1
The [italics Eagle [end italics], a relatively cheap, two-masted schooner, departed your home port of Boston a few days ago, headed to the British Caribbean island of Antigua with a humdrum cargo of dried fish, barrel staves, and grain. As you and your shipmaster have agreed, the [italics] Eagle [end italics] will sell this cargo, pick up a new cargo of sugar, and return home. If the sugar is too expensive or bad, or if there isn’t enough of it, the shipmaster will try a couple of other islands. He has promised to write when he reaches Antigua, but it is too soon to expect word, so you are not worried.”

RATING:
4 stars.

STARTED-FINISHED
12/9/2024-12/19/2024

[Warren D'Souza · Rating 4 out of 5]

A must-read for any American insurance professionals with an interest in history. It'll give you a sense of pride, and a chip on your shoulder, from reading the impressive history of our profession in the new world. I was especially eager learning about the ways in which insurance has been used "on offence" building America as a global power and even as a weapon of war, and not just "on defense" to protect from loss.

Unlike most writers who discuss insurance from an "outsider" view, Farber shows she has deeply studied our industry and it's nuances. Her data collection is compelling and her narrative is well-supported by primary sources. As evidenced by her citations, she's spent an enormous amount of time in the Chubb archives.

My only complaint is that the vocabulary is unnecessarily complex with otherwise standard sentence structure, almost as if she had a thesaurus open to find longer words wherever possible. The book could have been more compelling and just as academic with a 20% swing in the readability score.

[Harris N. Miller · Rating 5 out of 5]

A brilliantly insightful look into a missing piece of history for the vast majority of us: the major importance of the marine insurance industry to the creation of our country. The author presents a convincing argument that insurers provided key foundational element for the creation and initial successes of the US. This topic should be included in every history of the US.

[Patrick · Rating 5 out of 5]

This is a fantastic book about a very undermentioned subject that was partly responsible for the financial security of the founding of the US: marine insurance.

I learned a lot reading this book and was entertained by such a deep dive into the subject.

[Marlowe Glass · Rating 5 out of 5]

Absolutely incredible. Who cares about insurance? I know. I know…but this book will change your entire perspective on the subject!! To think I now want to be a marine insurance salesman in 18th century America…