 Coat of Arms, granted 1721, in Liverpool | |
| Company type | Public |
|---|---|
| Industry | Insurance |
| Founded | 1720 |
| Defunct | 1968 |
| Fate | Merged with Guardian Assurance Company |
| Successor | Axa |
| Headquarters | London, England |
Key people | Lord Kindersley, (Governor) |
The Royal Exchange Assurance, founded in 1720, was a British insurance company. It took its name from the location of its offices at the Royal Exchange, London.
The Royal Exchange Assurance emerged from a joint stock insurance enterprise known as Onslow's insurance or Onslow's Bubble. This had been begun as the Mercer's Hall Marine Company, or Undertaking kept at the Royal Exchange for insuring ships and merchandise at sea. A similar enterprise sought incorporation in 1718, but the Attorney-General reported against this. Lord Onslow then sought a means of avoiding the difficulty by his company acquiring the charters of Society of Mines Royal and Company of Mineral and Battery Works, which declared itself open for assuring ships and merchandise in March 1719. Their opponents petitioned against this and the Attorney-General reported in May 1719 that the use made of the charters was "unwarrantable". [1] The directors admitted this mistake but requested their own charter in January 1720. They and another insurance enterprise each offered £300,000 towards the King's Civil List debts. The King then encouraged the House of Commons to permit their incorporation. This was done in the Bubble Act. The new chartered company then accepted subscriptions paid on shares in the old company in payment for those on its own shares. [2]
The company received its royal charter under the Royal Exchange and London Assurance Corporation Act 1719 (6 Geo. 1. c. 18), popularly known as the Bubble Act. Under the terms of this legislation, the Royal Exchange and the London Assurance Company were the only incorporated bodies chartered to write marine insurance. Although this eliminated competition from other corporations, private underwriters, such as those at Lloyd's of London would remain in business. This arrangement continued until the repeal of the act in 1825. [3]
The Royal Exchange Assurance survived as an independent company for over two centuries until merging with the Guardian Assurance Company in 1968. [4]
Notable governors of The Royal Exchange Assurance included:
A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity and recognized as such in law for certain purposes. Early incorporated entities were established by charter. Most jurisdictions now allow the creation of new corporations through registration. Corporations come in many different types but are usually divided by the law of the jurisdiction where they are chartered based on two aspects: whether they can issue stock, or whether they are formed to make a profit. Depending on the number of owners, a corporation can be classified as aggregate or sole.
1720 (MDCCXX) was a leap year starting on Monday of the Gregorian calendar and a leap year starting on Friday of the Julian calendar, the 1720th year of the Common Era (CE) and Anno Domini (AD) designations, the 720th year of the 2nd millennium, the 20th year of the 18th century, and the 1st year of the 1720s decade. As of the start of 1720, the Gregorian calendar was 11 days ahead of the Julian calendar, which remained in localized use until 1923.
The South Sea Company was a British joint-stock company founded in January 1711, created as a public-private partnership to consolidate and reduce the cost of the national debt. To generate income, in 1713 the company was granted a monopoly to supply African slaves to the islands in the "South Seas" and South America. When the company was created, Britain was involved in the War of the Spanish Succession and Spain and Portugal controlled most of South America. There was thus no realistic prospect that trade would take place, and as it turned out, the Company never realised any significant profit from its monopoly. However, Company stock rose greatly in value as it expanded its operations dealing in government debt, and peaked in 1720 before suddenly collapsing to little above its original flotation price. The notorious economic bubble thus created, which ruined thousands of investors, became known as the South Sea Bubble.
John Law was a Scottish-French economist who distinguished money, a means of exchange, from national wealth dependent on trade. He served as Controller General of Finances under the Duke of Orleans, who was regent for the juvenile Louis XV of France. In 1716, Law set up a private Banque Générale in France. A year later it was nationalised at his request and renamed as Banque Royale. The private bank had been funded mainly by John Law and Louis XV; three-quarters of its capital consisted of government bills and government-accepted notes, effectively making it the nation's first central bank. Backed only partially by silver, it was a fractional reserve bank. Law also set up and directed the Mississippi Company, funded by the Banque Royale. Its chaotic collapse has been compared to the 17th-century tulip mania parable in Holland. The Mississippi bubble coincided with the South Sea bubble in England, which allegedly took ideas from it. Law was a gambler who would win card games by mentally calculating odds. He propounded ideas such as the scarcity theory of value and the real bills doctrine. He held that money creation stimulated an economy, paper money was preferable to metal, and dividend-paying shares a superior form of money. The term "millionaire" was coined for beneficiaries of Law's scheme.
A joint-stock company is a business entity in which shares of the company's stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares. Shareholders are able to transfer their shares to others without any effects to the continued existence of the company.
The Bubble Act 1720 was an act of the Parliament of Great Britain passed on 11 June 1720 that incorporated the Royal Exchange Assurance Corporation and London Assurance Corporation, but more significantly forbade the formation of any other joint-stock companies unless approved by royal charter.
The Mississippi Company was a corporation holding a business monopoly in French colonies in North America and the West Indies. In 1717, the Mississippi Company received a royal grant with exclusive trading rights for 25 years. The rise and fall of the company is connected with the activities of the Scottish financier and economist John Law who was then the Controller General of Finances of France. Though the company itself started to become profitable and remained solvent until the collapse of the bubble, when speculation in French financial circles and land development in the region became frenzied and detached from economic reality, the Mississippi bubble became one of the earliest examples of an economic bubble.
The Company of Mineral and Battery Works was, with the Society of the Mines Royal, one of two mining monopolies created by Elizabeth I. The Company's rights were based on a patent granted to William Humfrey on 17 September 1565. This was replaced on 28 May 1568 by a patent of incorporation, making it an early joint stock company. The Society of the Mines Royal was incorporated on the same day.
Thomas Onslow, 2nd Baron Onslow, of West Clandon, Surrey, was a British landowner and Whig politician who sat in the English and British House of Commons between 1702 and 1717. He commissioned the building of Clandon Park House in the 1730s.
The Joint Stock Companies Act 1844 was an act of the Parliament of the United Kingdom that expanded access to the incorporation of joint-stock companies.
Events from the year 1720 in Great Britain.
Exchange Alley or Change Alley is a narrow alleyway connecting shops and coffeehouses in an old neighbourhood of the City of London. It served as a convenient shortcut from the Royal Exchange on Cornhill to the Post Office on Lombard Street and remains as one of a number of alleys linking the two streets. Shops once located in Exchange Alley included ship chandlers, makers of navigation instruments such as telescopes, and goldsmiths from Lombardy in Italy.
Companies Act is a stock short title used for legislation in Botswana, Hong Kong, India, Kenya, Malaysia, New Zealand, South Africa and the United Kingdom in relation to company law. The Bill for an Act with this short title will usually have been known as a Companies Bill during its passage through Parliament.
The history of insurance traces the development of the modern business of insurance against risks, especially regarding cargo, property, death, automobile accidents, and medical treatment.
The York Buildings Company was an English company in the late 17th and early 18th centuries.
The history of company law in the United Kingdom concerns the change and development in UK company law within the context of the history of companies, deriving from its predecessors in Roman and English law. Company law in its current form dates from the mid-nineteenth century, however other forms of business association developed long before.
The history of corporate law in the United States concerns the development of the corporation, primarily as a business organization, under the different United States corporate law, including federal regulation.
Richard Lockwood of Dews Hall, near Maldon, Essex was a British merchant and politician who sat in the House of Commons between 1713 and 1741.
Charles Povey was a British pamphleteer and entrepreneur, who challenged the Royal Mail's postal monopoly by running the "Halfpenny Carriage", a local London postal system similar to William Dockwra's Penny Post. He founded the first joint-stock company for fire insurance, the Exchange House Fire Office later the "Sun Fire Office" that remains in business today as the RSA Insurance Group.
London Assurance was an English insurance company founded in 1720, in the midst of the South Sea Bubble speculation. It was acquired by Sun Alliance in 1965 to form the Sun Alliance and London.
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