Abstract: Shaped by Risk: The American Fire Insurance Industry, 1790-1920

Dalit Baranoff


Fire insurance represents one of the first institutional approaches to risk management in the United States. Between 1790 and 1920, the American fire insurance industry recast the unmanageable physical hazard of fire as a financial risk. In the formative years of the industry, catastrophic fires repeatedly bankrupted waves of insurers, confronting the survivors with the need for strategic and structural adaptations. Their responses included geographical diversification, and the establishment of a cooperative regime. Ultimately, insurers were forced to adapt to state rate regulation. Their strategies served to assure long-term stability for the industry as a whole at the expense of individual firms' pursuit of short-term gains.