The morning of 1 June 1911. The ‘Lloyd’s List & Shipping Gazette’ reports that Belfast witnessed the launch of the White Star leviathan Titanic, 45,000 ton sister ship to the Olympic, with philosophical calm; “At Messrs. Harland & Wolff’s shipbuilding yard nothing out of the ordinary was observable. There was no big display of bunting and no commotion whatever. A rather unusual calm prevailed and this it was that indicated that something a little out of the common was going to happen”. Ten months later, a Lloyd’s signal station reported that the largest and most luxurious liner ever built was in distress.
Early Days Thomas Andrews, managing director of Harland & Wolff, who Early in 1912, brokers Willis Faber & Co sought insurance for built the vessel and had been a major influence in her design two of the world’s largest ocean liners; the Olympic and the and construction, inspected the damage 15 minutes after the Titanic. The slip shows that Willis Faber, already a considerable collision. He reported to Captain Edward Smith that the ship force in the market, managed to negotiate an impressive would sink in 90 minutes and advised him to lower the lifeboats. premium rate of just 15 shillings (75p) per cent, helped by the The vessel lasted longer than either of them expected, but fact the ships were universally advertised as ‘unsinkable’. finally at 2.20am she plunged beneath the waves.
Cover was for 12 months on hull and machinery, valued at Open for business £1 million for each ship. The premium amounted to £7,500 per On the morning of 15 April, as Lloyd’s opened for business, ship, free from all average under £150,000 and insurers were the first news that Titanic had struck an iceberg had already to pay only on damage in excess of that sum. A risk of £1m was arrived from Cape Race. Reinsurance rates rose sharply during enormous; given that the total insured marine losses for 1912 the morning and reached 60% after further confirmation from came to £6.75m. Cape Race at lunchtime that the vessel was sinking. Shortly after this, a reassuring message came from the Exchange The slip from the broker acting for the White Star Line opened Telegraph in New York – Titanic was safely under tow for Halifax. on 9 January. Different underwriters took portions of the risk Rates plummeted to under 25% on the news. ranging from £200 to £75,000 and by the end of the day over £580,000 – more than half of the largest marine risk ever – had Reinsurance is the insurance of insurance. Today, as then, been placed. By 11 January the slip was complete; the Olympic it provides a way for insurers and their clients to protect and the Titanic were fully insured. themselves. If an insurer takes on a particularly large risk, they can transfer part of it to another insurer. However, insurance But not everyone was keen. British Dominions Marine Insurance, companies can only transfer a portion of their liability and must later Eagle Star, apparently declined to insure the ship. Edward always keep a share or an interest in the risk. The type of Mountain, founder of the company, reportedly said she “sat too reinsurance being traded the day after Titanic was called low in the water” and that the rate being offered was too cheap. “overdue insurance” and it allowed insurers to sell on their liability if uncertain news was received about a ship. The A Changing Marine Market purpose of the Lutine Bell, which still hangs in the market today, In 1912, Lloyd’s remained primarily a marine insurer. Indeed, was to inform the market when the ship arrived safely at port, just a year before, when writing the first ever aviation policy, or to confirm it as lost. When the bell rang, trading stopped. an underwriter, described a certain part of the new airborne In the 19th century, this was how breaking news was reported, machine as a ‘hull’ because they had no idea what else to call it. but wireless changed all that. The Exchange Telegraph report affected an estimated £50,000 worth of reinsurance. THE Shipping news It also became the subject of heated debate about how reports from news media sources, rather than Lloyd’s, were processed. A pioneer in improving the safety of ships was a former Royal Artillery Officer, Sir Henry Hozier, who became Secretary of The Loss to Lloyd’s Lloyd’s in 1874. He would later become Winston Churchill’s father in law. Within 30 days of the tragedy, White Star was paid in full. Lloyd’s picked up a large share of the hull claim. The life cover Hozier is best known for creating a network of coastal signal sums were significant, however most of these were covered stations, all equipped with telegraphs. By 1891, Lloyd’s had by American life insurance firms. Rumours spread of special created 40 stations in the United Kingdom and 118 abroad. parcels that were lost filled with De Beers diamonds and He was a keen technophile, determined to use the new wireless precious necklaces taken on board by glamorous passengers. technology to improve shipping safety. He was particularly However, the truth was a little more prosaic than the myths; interested in the work of a young Italian, Guglielmo Marconi. among many other things, the recovered inventory recorded By 1898, Lloyd’s decided to equip all their signal stations with items such as potatoes, 800 cases of shelled walnuts, 20,000 radio equipment, including the Lloyd’s Cape Race Signal Station, eggs and 15,000 bottles of beer. Newfoundland, which would later play such a crucial part in the Titanic story. The Titanic left a profound legacy to maritime safety. Her loss is a reminder that no ship is unsinkable. Despite being one of the ON A CLEAR NIGHT largest losses of its time, this is ultimately a human story and one that is summed up by the simple words in our loss book, At 11:40pm on Sunday, 14 April, steaming 22 knots and dated 16 April, “The loss of life is very serious”. 350 miles off Newfoundland, the 46,000 ton ship struck the submerged spur of an iceberg. The result was a 300ft gash, 10ft above the keel which ripped open six of her ‘watertight’ compartments on the starboard side.
Visit www.lloyds.com/titanic to download a free Titanic and Follow us on twitter: Find us on Facebook: Lloyd’s podcast and more Titanic features and images. @LloydsofLondon www.facebook.com/Lloyds The placement slip for the Titanic and no discount, was particularly low and her sister-ship Olympic. Cover was for amounted to £7,500 per ship. The slip TITANIC 12 months on hull and machinery, valued at £1million for each vessel; “FAA (Free opened on 9 January and by the end of the day brokers Willis Faber had placed over CENTENARY from All Average) absolutely under half the risk. Within 3 days the slip was £150,000” – insurers to pay only on complete with some 12 companies and damage in excess of that sum. The over 50 Lloyd’s syndicates participating premium of 15 shillings (75p) per cent, in the risk.
