Insurance, insurtech, and the architecture 207
insurance, it was typical of the tendency to consolidation and the accumulation of vast capital sums that underpinned insurer’s role as major investors
in capital markets (Baker & Collins 2003; Van der Heide 2019). This process
had already begun with the acquisition of property assets in the nineteenth
century. For London-based insurance offices, locating in grand buildings,
close to the key institutions of the Bank of England and the Inns of Court,
conferred symbolic credibility and authority. It also provided practical,
spatial connections to other financial institutions and facilitated participation in the transformation of the City of London into a location primarily
dedicated to commerce and finance. This provided the foundation for their
twentieth century role as what were often referred to as ‘the institutions,’ the
pension and life funds that sat at ‘the apex of property investment capital in
the United Kingdom’ (Pryke 1992, p. 239).
The ‘Octopus’: Insurance property investment and the city
One way of tracing how this significance to property investment came about
is by considering the case of industrial life assurance, a sector that by the last
quarter of the nineteenth century was the largest in both the United Kingdom
and the United States 3 . Industrial assurance was targeted at the ‘industrious’
working classes and based on the door-to-door sale, and subsequent weekly
collection, of contributions towards small life insurances used initially to meet
funeral expenses. Beginning in the United Kingdom in the 1840s, with the
formation of companies including Prudential Assurance, Refuge Assurance,
and Pearl Assurance, by 1880 the sector was vast. In contrast to the slow trajectories of ordinary life offices, the growth of industrial offices was spectacular. A comparison of the sectors published in The Economist in 1892 records
a rate of increase in premium income in ordinary companies in the 10 years
to 1890 as 27.2%. In the same period, the rate of increase in industrial companies was 159.1%, a trend which continued with growth at over 100% in all the
major industrial offices in the decade up to 1902 (The Economist 1904) 4 . By
1934, the Prudential’s net Sums Assured from its Ordinary Branch 5 alone, at
£25,000,000, dwarfed those of its nearest competitors in the ordinary sector,
Legal and General, at £14, 539,451, and the Norwich Union, at £10,000,000
(Prudential Bulletin 1935). This exponential growth in income meant the
industrial companies were amongst the largest institutional investors by the
early twentieth century. When combined with the ordinary sector
… life insurance companies alone are estimated to have accounted for
about 17 per cent of the total assets of financial institutions in the early
1920s and for some 25 per cent by the early 1960s. … by 1938 insurance
companies were one of the most important institutional investors, with
assets exceeding those of the building societies by 30 per cent, and equal
to two-thirds of the clearing banks’ assets.
(Baker & Collins 2003, p. 137)
insurance, it was typical of the tendency to consolidation and the accumulation of vast capital sums that underpinned insurer’s role as major investors
in capital markets (Baker & Collins 2003; Van der Heide 2019). This process
had already begun with the acquisition of property assets in the nineteenth
century. For London-based insurance offices, locating in grand buildings,
close to the key institutions of the Bank of England and the Inns of Court,
conferred symbolic credibility and authority. It also provided practical,
spatial connections to other financial institutions and facilitated participation in the transformation of the City of London into a location primarily
dedicated to commerce and finance. This provided the foundation for their
twentieth century role as what were often referred to as ‘the institutions,’ the
pension and life funds that sat at ‘the apex of property investment capital in
the United Kingdom’ (Pryke 1992, p. 239).
The ‘Octopus’: Insurance property investment and the city
One way of tracing how this significance to property investment came about
is by considering the case of industrial life assurance, a sector that by the last
quarter of the nineteenth century was the largest in both the United Kingdom
and the United States 3 . Industrial assurance was targeted at the ‘industrious’
working classes and based on the door-to-door sale, and subsequent weekly
collection, of contributions towards small life insurances used initially to meet
funeral expenses. Beginning in the United Kingdom in the 1840s, with the
formation of companies including Prudential Assurance, Refuge Assurance,
and Pearl Assurance, by 1880 the sector was vast. In contrast to the slow trajectories of ordinary life offices, the growth of industrial offices was spectacular. A comparison of the sectors published in The Economist in 1892 records
a rate of increase in premium income in ordinary companies in the 10 years
to 1890 as 27.2%. In the same period, the rate of increase in industrial companies was 159.1%, a trend which continued with growth at over 100% in all the
major industrial offices in the decade up to 1902 (The Economist 1904) 4 . By
1934, the Prudential’s net Sums Assured from its Ordinary Branch 5 alone, at
£25,000,000, dwarfed those of its nearest competitors in the ordinary sector,
Legal and General, at £14, 539,451, and the Norwich Union, at £10,000,000
(Prudential Bulletin 1935). This exponential growth in income meant the
industrial companies were amongst the largest institutional investors by the
early twentieth century. When combined with the ordinary sector
… life insurance companies alone are estimated to have accounted for
about 17 per cent of the total assets of financial institutions in the early
1920s and for some 25 per cent by the early 1960s. … by 1938 insurance
companies were one of the most important institutional investors, with
assets exceeding those of the building societies by 30 per cent, and equal
to two-thirds of the clearing banks’ assets.
(Baker & Collins 2003, p. 137)