This week we’re marking the anniversary of one of London’s defining events: the Great Fire of London, which ravaged the city at the start of September 1666.
It was started by nothing more than a fire from an overheated oven at a baker’s shop near London Bridge.
The damage was immense. The Association of British Insurers estimates that the cost of rebuilding London was a colossal £37bn in today’s money. Rebuilding St Paul’s Cathedral alone would cost around £600m today. But out of the ashes a new London soon arose – one built from bricks and stone. And a new industry – insurance, with fire insurance offered to Londoners for the first time in 1681.
Insurance has been a UK success story ever since – contributing around £12bn in taxes in 2014, providing well over 300,000 jobs and managing investments of £1.9 trillion. That’s equivalent to 25 per cent of the UK’s total net worth. And London has always been the capital city of that success.
Now our challenge is to maintain that success, to keep London as a capital of insurance. We want to ensure we can provide the right framework for the industry in which we can serve customers better. This would help us to act as a long-term responsible investor.
It’s worth thinking for a moment about the importance of the services the insurance industry provides. I look on an insurance premium as a down-payment for future security. Take those Londoners of 1666. They would have been left with nothing after the Fire – and with no means to make good their losses.
Now help can be almost instant when something bad happens – whether that’s to a customer’s home, their possessions, their health, or their pets. We’re there to help them get back on their feet as soon as possible.
The same is true of business – we’re there to give business confidence, so it can do business and create jobs and growth, while being covered against the risks they face. That’s anything from accidents at work to insuring cargo as it travels across the world.
Few of those Londoners in 1666 would have been in a position to save for the future. Now a huge part of our work is to help customers save for their pension, so they can enjoy a prosperous retirement.
That means our relationship with them will last decades – so the investments we make on their behalf must create long-term returns as well. So we’re big investors in business. We put the fuel in the tank of UK business.
But we also invest in the UK’s infrastructure – the roads, railways, hospitals and other amenities – that are vital to help us grow the economy and support our communities. We want to get a good return on our investments and we want society to get what we might call a social return – better and more efficient public services and a stronger more stable society.
We’d like to invest more – but we can only do that if the government and regulators put the right incentives in place. That’s work in progress. The old insurance companies used to fix plaques up on the walls of the properties they insured.
Aviva can trace its history back to the Hand-in-Hand Office, founded in 1696. If you look carefully you can still see a few Hand-in-Hand plaques on old buildings across London, showing the original homeowner’s policy number and the image of a handshake. It is an image of trust and support.
That was true in 1696 and it is just as true of the service we provide today. Now we must make it true for another 300 years.