Alyssa Lane
The history of insurance is inextricably linked to the history of slavery. Slave insurance, one of America's earliest forms of industrial risk management, was a significant industry in the United States, with insurance companies writing policies to insure slave owners against the loss, damage, or death of their slaves. This practice, which treated enslaved people as commodities, emerged and grew significantly in the decades leading up to the Civil War, coinciding with the expansion of European colonial powers and the development of global capitalism. While the full extent of insurance companies' involvement in slavery may never be known due to incomplete historical records, the discovery of slavery-era insurance policies has brought this dark chapter of history into the spotlight, prompting legislative action and a reckoning with the past.
| Characteristics | Values |
|---|---|
| Companies involved in slave insurance | Aetna, US Life, New York Life, Manhattan Life, Baltimore Life Insurance Company of Maryland, North Carolina Mutual, Mutual Benefit Life and Fire of Louisiana, JPMorgan Chase, Wells Fargo, National Loan Fund Life Assurance Company, Nashville Commercial Insurance Company |
| Slave insurance in the UK | London Assurance, a member company of Royal & Sun Alliance, may have insured owners of slave-carrying vessels |
| Slave insurance as a form of risk management | Slave insurance was a form of risk management for slave owners, protecting them from the untimely loss of their slaves and allowing them to rent out slaves to businesses |
| Slave insurance as a source of revenue | Slave insurance provided an important source of revenue for companies, with several million dollars stored in life insurance policies |
| Impact of the Civil War and Emancipation | The abolition of slavery following the Civil War rendered slave insurance policies void, as the "property" insured no longer existed |
| Incomplete historical record | The full extent of insurance companies' involvement in slavery is likely much greater than what current evidence shows due to incomplete reporting and lost or destroyed records |
| Disclosure laws | California and other states have passed laws requiring companies to disclose their slavery-era activities and ties to slavery |
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What You'll Learn
Slave insurance as a form of risk management for slave owners
Slave insurance was a form of risk management for slave owners, who viewed slaves as valuable property. This practice was particularly common among urban slave owners in the South, who promoted insurance as a means of safeguarding against the untimely death of their slaves.
Slave insurance became an increasingly significant industry after the Act Prohibiting Importation of Slaves, a federal US law that came into effect in 1808, which prevented any new slaves from being imported to the country. As a result, existing slaves, especially skilled workers, became more valuable and were often rented out to businesses. Slave owners insured against the death or loss of these rented slaves, with policies covering damage, injury, or death. Industries that rented insured skilled slaves included blacksmithing, carpentry, railroad construction, coal mining, and steamboat operations. Insurers also wrote policies on child slaves as young as 12 years old who worked in hazardous conditions in mines and factories.
Slave insurance policies were sold by over 40 firms, mostly based in the South, including New York Life, Aetna, US Life, and Baltimore Life Insurance Company of Maryland. These companies charged double the rate for slaves compared to white lives of the same age due to a lack of data on slave mortality. Baltimore Life, for instance, initially refused to insure slaves engaged in dangerous work but later underwrote slaves on steamboats and in coal mines for an additional fee.
Slave insurance advertisements targeted owners whose slaves worked in various sectors, including domestic service, hospitality, agriculture, manufacturing, and transportation. In one instance, the Nashville Commercial Insurance Company offered to insure "Negroes against the risks of the River" in 1859. Slave insurance also allowed slave owners to recoup a significant portion of a slave's value in the event of their death, thus protecting the long-term value of their "property".
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Slave insurance as a means of profiting from slavery
The discovery of insurance policies from the slavery era in the archives of several insurance companies has brought to light the role of slave insurance as a means of profiting from slavery. These documents provide evidence of the profits made from insuring slaves, which contributed to the capitalisation of insurance companies, some of which continue to exist today.
Slave insurance in the United States became a significant industry, especially after the Act Prohibiting Importation of Slaves took effect in 1808, preventing the importation of new slaves into the country. As a result, existing slaves, especially skilled workers, became more valuable and were often rented out to businesses. Slave owners insured against the death or loss of these rented slaves, recognising their value and the potential for financial gain.
In cities like Richmond and Lynchburg, male slaves were extensively hired out, and their labour was utilised in industries such as coal mining, iron manufacturing, and emerging cotton mills. Life insurance policies were taken out on these slaves, with companies like Baltimore Life insuring enslaved people up to two-thirds of their total value. By the 1850s, the life insurance industry was firmly established in Richmond, and companies like New York Life sold insurance policies to slave owners, profiting from the system of slavery.
The practice of insuring slaves extended beyond the United States, with records indicating that London Assurance, a member company of Royal & Sun Alliance, may have insured owners of slave-carrying vessels. Lloyd's of London, a leading market for marine insurance, also played a significant role in the insurance of slave-voyages and the broader slave economy. The discovery of these historical records has sparked legislative interest, with efforts to uncover the extent of slave insurance and its impact on the profitability of insurance companies.
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The role of insurance companies in the economic mechanisms of slavery
Insurance companies played a significant role in the economic mechanisms of slavery, particularly in the 18th and 19th centuries. During these periods, insurers provided coverage for slaveholders, insuring their slaves against damage or death. This practice was common among slave owners whose labourers engaged in hazardous work in mines, lumber mills, turpentine factories, and steamboats in the industrialising sectors.
For example, companies like New York Life, Aetna, and US Life sold insurance policies to slave owners. By 1847, insurance policies on slaves accounted for a third of the policies in New York Life, a firm that later became one of the nation's Fortune 100 companies. In the span of about three years, the company sold 508 policies, more than Aetna and US Life combined, according to available records. Other companies with ties to slavery include JPMorgan Chase, Wells Fargo, and their predecessor companies, which allowed slaves to be used as collateral for loans.
Insurers also provided maritime insurance for the slave trade, insuring slave-carrying vessels and their cargo. This practice began in the 17th century and continued into the 19th century. For example, London Assurance, a member company of Royal & Sun Alliance, may have insured owners of slave-carrying vessels starting in 1720. Similarly, Manhattan Life provided a policy that insured shippers for their cargo of 700 Chinese coolies in 1854.
The life insurance industry also underwrote the lives of slaves, particularly those engaged in dangerous occupations, valued as artisans or house slaves, or hired out for work in factories and railroads. This practice allowed slaveholders to protect the long-term value of their slaves and confirmed their confidence in the longevity of the slave system.
In summary, insurance companies facilitated the economic mechanisms of slavery by providing coverage for slaveholders, insuring slave-carrying vessels, and underwriting the lives of slaves. These practices contributed to the profitability of the slave trade and the exploitation of enslaved people.
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The use of slaves as collateral in loans
During the antebellum period, slaves were used as collateral in loans in the southern United States. Banks accepted slaves as collateral on loans made to plantation owners in the South in the early 19th century. Slaves were considered desirable as collateral because they had a high liquidation value and could be sold in well-developed markets for the highest price in cash. However, their mobility also made them insecure collateral, as borrowers could sell them to outside buyers or move them beyond the reach of creditors. This created the paradox of slave collateral, where collateral mobility increased liquidity but decreased security.
During this time, borrowers in the South gained access to credit by pledging their wealth as collateral on loans. As slaves were considered the property of their owners, they were included in an individual's wealth and could be pledged as collateral. Free white males in the South owned an average of 2.0 slaves in 1860, and if the average market value of a slave was $900, this would account for a significant portion of southern per capita wealth.
America's second-biggest bank, JPMorgan Chase, has admitted that its subsidiaries accepted slaves as collateral on loans and ended up owning several hundred slaves. The bank apologized for its involvement in the "brutal and unjust institution" of slavery and expressed contrition for the role that its predecessor institutions, Citizens' Bank and Canal Bank, played in the slave trade. The bank's disclosure was made in compliance with a rule requiring companies to detail past dealings with the slave trade when doing business with the city of Chicago.
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The impact of slave insurance on the development of capitalism
The practice of insuring slaves demonstrates a sophisticated understanding of capitalism and its exploitation to maximise profits from the enslavement of African Americans. Slave insurance was promoted as a means of protecting the long-term value of slaves, and by purchasing insurance, slaveholders confirmed their confidence in the longevity of the slave system and its value for the future of southern industrialization.
The Baltimore Life Insurance Company of Maryland, for example, enjoyed a virtual monopoly in the slave insurance market until the late 1840s and 1850s. During this period, demand for such policies grew, attracting competition from other institutions. Baltimore Life insured enslaved people for up to two-thirds of their total value and prohibited multiple policies on a single person. From 1854 to 1860, nearly 60% of the company's policies covered slaves.
Slave insurance policies were also sold by companies like New York Life, Aetna, and US Life, particularly for slaves engaged in hazardous work in mines, lumber mills, and steamboats. In the case of New York Life, insurance policies on slaves accounted for a third of the policies in the company's early days.
The existence of slave insurance is indicative of a broader relationship between capitalism and slavery. Some scholars argue that slavery played a significant role in spurring the Industrial Revolution, particularly in Great Britain, by creating a highly sophisticated commercial enterprise that required a secure financial system and physical infrastructure. The management techniques used by 19th-century corporations, for example, were developed during the previous century by plantation owners.
However, others argue that plantation slavery was incompatible with urban and industrial development, and thus not capitalist. This perspective views slavery as precapitalistic or even primitive, protecting the idea that America's economic ascendancy was achieved in spite of, rather than because of, the labour of enslaved people.
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Frequently asked questions
No, insurance as a concept predates slavery. However, slave insurance was one of America's earliest forms of industrial risk management and became a significant industry.
Slave insurance was a means for slave owners to protect themselves financially from the loss, damage, or death of their slaves.
Slave owners could insure their slaves for a certain amount, with annual premiums. For example, a slave could be insured for $500 with an annual premium of around $11.25.
Many insurance companies, including New York Life, Aetna, US Life, and Baltimore Life, were involved in selling insurance policies to slave owners.
Yes, in 2000, California Governor Gray Davis signed two bills related to slave insurance. One bill authorized the California insurance commissioner to request slave insurance policies from companies operating in the state. The other bill, the UC Slavery Colloquium Bill, allowed the University of California to hold a conference on the economics of slavery.
