Marine Insurance in Early Modern Genoa (1564–1571): A Risk-Shifting or Risk-Sharing Tool?

Abstract

This paper investigates the main features of the Genoese insurance market between 1564 and 1572, thanks to the analysis of an unpublished tax register that preserves all insurance policies drafted in Genoa in that period. Marine insurance, intended as an archetypical risk-shifting technique, is probably the oldest financial instrument intended solely to protect against the economic consequences of commercial losses. Conventional premium insurance was developed as a tool to transfer risk during the commercial revolution of the late middle ages. This development was first led by Italian cities, among whom Genoa played a key role. However, Genoese operators involved in the insurance sectors, which belonged almost exclusively to the patrician families ruling the republic, acted as a mutual “risk-community” in a semi-closed market: a sort of “syndicate”. They shared among them the risks of maritime routes calling at the port of Genoa. Insurance was a zero-sum game, with low losses and gains that did not allow a true single-sector specialisation.