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Risk and Insurance History

The Great Fire of London

Barry Klein | June 1, 2001

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The insurance industry can accurately trace its formation to the Great Fire of London on September 2, 1666. Learn the history behind the event—why the setting was ripe for disaster, the demolition of most of the city, and the foretelling of what emerged from the ashes.

Most industries evolve over time. While there have been risk-sharing mechanisms dating back to the days of Phoenician ship captains splitting up their cargoes at the mouth of the then-raging Nile river, the insurance industry Superior Access Internet Software can accurately trace its beginning to one event. That event was the Great Fire of London, on September 2, 1666.

The Setting

London had a poor history with fire. There had been many severe fires over the years. In fact, when William the Conqueror took over in the early 11th Century, he was aghast at what he saw. Fires, sometimes severe fires, were commonplace. Straw roofs would catch fire and burn, only to be replaced by more straw roofs. One of the customs was to stoke a fire before going to bed to keep the home warm throughout the night. Needless to say, there were many nighttime fires. He instituted a law that each home had to douse all candles and cover the main fire with a large metal bowl or cover. That law, requiring a couvre-feu (couvre for cover and feu for fire) led to today's "curfew" laws.

By the mid-1600s, London was a city ripe for a conflagration. Many of the buildings were built of wood, many of them old. Even many of the brick and stone buildings had thatched roofs. Where there were sidewalks, they were made of wood with no fire-stops inside them.

Fires, even today, can be scary events. They had to have been especially scary back in those days. There were no formalized fire departments yet. Any building that caught fire was pretty much doomed, but the citizenry would rally around with bucket brigades to keep the fire from spreading.

The Spreading

The fire started early in the morning in a baker's shop in Pudding Lane, and quickly spread. Surviving written records indicate that it was windy, which blew burning embers around the still-sleeping city. Unfortunately, one of the first structures to burn was the huge wooden waterwheel on the Thames that supplied water to the city. Losing the waterwheel significantly reduced the amount of available water throughout the city. The bucket brigades didn't stand a chance.

The fire raged for days. Structure after structure burned, with the fire spreading from one district to another. After several days, the king, King Charles II, called in the Duke of York, who was in charge of the Royal Navy, to be responsible for putting out the fire.

It had long been a practice to use long poles, with hooks on the end, to pull down adjacent buildings to a fire to keep the fire from spreading. Unfortunately, the combination of heat, wind, and lack of water kept that from working. The concept of a "fire break," depriving a fire of fuel, was nonetheless a valid way of containing a fire. The Duke of York applied it to a large degree.

He had his men fan out past where the fire was burning and create a large swath of empty land. They did it not only by pulling down buildings where they could, but by using gunpowder to blow up and clear away buildings where they couldn't be pulled down. The tactic worked. In the end, the fire burned to the edge of the large fire break and finally died for lack of fuel. After raging for 5 days, the Great Fire of London was finally out.

The Rebuilding

By the time it was over, London was devastated. Four-fifths of the city lay in smoldering ashes. England's biggest city—containing roughly two-thirds of the wealth of the empire—was ruined. Over 13,000 buildings were destroyed, mostly homes but including many churches and commercial establishments. Fortunately, the death rate was amazingly small. Whereas the first "Great Fire" in London in the 11th Century reportedly claimed around 3,000 lives, this new inheritor of that name caused only 16 recorded deaths.

The city began the long and arduous task of rebuilding. It was a task that would take many years. As new buildings began springing up from the ruins, so did something else. The following year, 1667, rising from the ashes of London like the mythical Phoenix bird, was the world's first insurance company.

See the next article in this series for the rest of the story, The World's First Insurance Company.

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