The London market has always been considered as a pioneers in marine insurance. Although, they haven’t been the first one who has issued cargo insurance certificate but they have quickly mastered the art of it. Underwriters in London have been known for willing to take a risk and play with high stakes not like their colleagues in Amsterdam in the early modern age.

Finally, London has been the home of Edward Lloyd`s coffee house which has later turned in to one of most specialized insurance markets in the world. Do you know that there has been a time when London cargo insurance market has been almost wiped out? The single loss has forced many underwriters to declare bankruptcy.

The catastrophic events have unfolded in late June of 1693. Its the time when Great Britain has been at nine years war with France. The war has been going on for several years and and has hold back many merchants. As a result, in the spring of 1693, a convoy of 200 merchant English and Dutch ships has been organized help bring the goods to Spain and Mediterranean.

The fleet is better known in history books as Smyrna fleet. It has been escorted by 69 English and Dutch warships. Unfortunately, their way to Mediterranean has been blocked by a fleet of 100 French warships. The battle of Lagos has unfolded during which 100 merchant ships has been lost and united fleet of England and Dutch ships have been scattered.

It is interesting to mention that French navy hasn’t lost a single warship. They have looted goods worth 13 million livres. The end of this battle has been devastating for Britain as their merchants haven’t reached Spain and the navy hasn’t been able to increase its presence in Mediterranean sea.

The battle of Lagos has been even more devastating for insurance industry. The City of London has declared it the second worst financial disaster since the Great Fire. What is more overwhelming is that it came only 27 years after the massive fire in London. The day the news about the battle reached London, many underwriters have left their office with a faces like they are heading for death sentence. Although, its worth to mention that even if Amsterdam insurers have lost more ships during that day, the financial impact of the disaster has been less severe for them. Their secret of success has been unwillingness to take a risk with high sums.