Mutuality Tested: The Rise and Fall of Mutual Fire Insurance Offices in Eighteenth-Century London

Abstract

There is now a considerable body of theoretical literature on the comparative efficiencies of mutual and stock forms of corporate organisation in financial services. However this question has received comparatively little attention from business historians. This article examines the factors behind the dramatic rise and fall of three large mutual fire insurance offices in Georgian London, addressing issues of their financial structure, organisation and governance, in the context of modern theories of mutual formation. It is concluded that changing levels of aggregate uncertainty in the market - rather than internal agency conflicts - provide the best explanation for the early success and subsequent failure of these financial institutions.