In an exciting collaboration between Minet Malawi, Britam, and The Daily Times - Malawi's leading newspaper - we are thrilled to introduce a groundbreaking initiative that will redefine your Wednesdays. Welcome to the Insurance Insights Column – a weekly rendezvous with the world of insurance and contemporary issues that matter. Every article aims to illuminate the intricate landscape of insurance products and relevant topics that impact us all. The articles will be educative at all levels, catering to both practitioners and non-practitioners.
As published in The Daily Times (Malawi) on June 5th, 2024
As I write this article, I am surrounded by six standard-two young boys and girls. They are reciting a series of couplets of the Great Fire of London. As an insurance professional, I am pleased. The Great Fire of London has great bearing on what modern insurers do. It was not an ordinary fire in cause, magnitude and effect. No fire that we have witnessed in Malawi can measure up to the London Fire. It was a fire extraordinaire. Yes, this is an event that changed the face of London.
Insurers trace the origin of modern insurance to the London Fire. To learn that the Great Fire of London is taught in standard-two is a thing that most insurers will be happy about. For this reason, we take our turn to salute the teacher of this standard-two class, for inculcating knowledge to the young, about one of the major events, which transformed the landscape of insurance and risk management in the world. A job well done to the teacher for educating Malawi’s future insurers. One cannot call oneself an insurer if one does not know facts about the London Fire.
The Great Fire of London is a classic example of static risk. Static risks are risks, which occur irrespective of any changes in an economy. They are principally a consequence of human negligence.
The Great Fire of London ran from September 2 to 5, 1666 in Pudding Lane. It is reported to have commenced in a bakery, following a small human negligence by the baker’s maid, who had forgotten to douse ovens as she was going to bed. When she woke up at one o’clock in the morning, the house was aflame. The fire spread in all directions of the city.
At this time, the city of London had heavy fire load. Most of the buildings were made from wood and had grass thatch. This gives you a clue as to why insurers do not favor insuring grass thatched houses. They have a tried-and-tested risk as reference.
The Londoners fought a losing battle for three full days. They could not extinguish the fire, which on the second day had grown out of control. Fortunately, the fire died down after three days, having destroyed 80 percent of London city.
The Great Fire was a blessing in disguise. The fire brought two positive effects to inhabitants of London in particular and the world in general. One - the plague, which had ravished the city, diminished greatly due to mass death of plague-carrying rats. Whereas the fire killed only 16 people, the plague is estimated to have knocked down 105,000 people to death. The case in point is that the plague disappeared as a result of the Great Fire.
Two - the aftermath of the inferno presented an opportunity to Londoners to rebuild a new city. A lesson was learnt. A number of town planning legislations were passed following the fire. The most important legislative measure was that timber buildings were banned. Dear reader, the city that we know as London today, was once under the ashes. London is now safer than it was in 1666 because its inhabitants lived up to the challenge to rebuild it.
As a nation - whether we live in Mtandire in Lilongwe, Mchengautuwa in Mzuzu, Ndirande in Blantyre or Makungulu village in Likoma Island – we can learn a lesson from the Great Fire and rebuilding our cities. In the past, we witnessed catastrophes, such as cyclones Ana, Idai, Gombe and the omnipotent Freddy, running down our cities and villages. Apart from giving victims handouts, what have we done to avoid experiencing another catastrophe? What have we done to rebuild our cities, especially Blantyre city that was most affected by cyclone Freddy? Any new legislative measure in place, as was the case with London in 1666? What has the insurance fraternity done about the risk? Food for thought.
Back to the Great Fire. Insurance, as we know it today, can be traced to the London Fire that burnt the city in 1666. Records indicate that the Great Fire costed Londoners an estimated GBP 10 million. At that time, the country’s GDP was just GBP12,000. No wonder, the expense led to the idea of insuring against fire. Yes, the first insurance company in the world can be traced from the 1666 ashes of London.
Views from the top are that we, as a nation, can import ideas from the Londoners of the 1660s, especially with the destructive fires and cyclones that we experience in the country nowadays. The standard-two kids have set the ball rolling. It’s now your turn. Talk to us. We are here to serve you.
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