Insurance & The Blitz

September the 13th saw the residents of London cram into the underground stations and platforms for the first time during the Blitz which started on the 7th of September 1940.

Anyone who knows me knows I have a keen history interest with World War 2 in particular and I’ve been seeing how my role acted at various points in history.?I wasn’t sure what or how to write about this given the colossal human losses on all sides of the world, but it goes without saying that I feel keenly about this.?I recall talking to my Grandparents about their experiences during the war albeit they were in Coventry and still remember how vivid their recollection was.?

Hopefully this is informative and unbiased as well as compassionate to the loss of life.?Sometimes as an insurance underwriter we are seen as uncaring in this respect where property is concerned but truly, we are all human.

Taking things back a step and doing some research, the War Exclusion on most policies is found in 1915 whereby a Lloyds catastrophe underwriter calculated the risk based on;

• Number of Zeppelins
• Frequency of attacks
• Bomb load
• Area of explosion or area of effect
• Size of London

Cuthbert was able to differentiate his rating based on the amount bombardment being carried out at any given time during World War One.?

As an emerging risk the applicable costs were based on the potential damage with sufficient loading and so the coverage was offered as urban-bombing insurance.?This was roughly sold in the market for 20 years until technology had caught up.?Bombing speed, intensity and payloads had increased with the introduction of twin engine bombers and in greater numbers meant that Cuthbert’s rating was unable to cope.

So, in 1936 the decision was made to exclude war and civil war from what we know as fire insurance policies during a meeting between the British Insurance Association and a committee from Lloyds.

This brings us to World War Two and our subject matter.?Most if not all civilians had no such insurance in place let alone insurance which would sufficiently cover the damage caused by bombs and so the fact of the matter is that no insurance cover was in place.?It’s important to remember that the economic landscape of the time meant that few people owned their homes of a working class background and a large portion of these residents were in rented accommodation.

Bombing map of London during 8 months of bombing. Source (https://www.pri.org/stories/2015-04-14/map-shows-locations-where-bombs-fell-london-during-world-war-ii )

During the early stages of the bombing campaign and building speed during the war, prefabricated homes were constructed in place of the homes lost.?The majority of bombing was delivered in a ‘stick’ and so whole streets were levelled as opposed to single houses following a Zeppelin raid.?The owner would be given a certificate to present at a later date to have a brick house built for them where the prefab stood.

Prefab houses along Straight Road, Harold Hill, Romford...used to pass these very ones on the 174 bus on the way to Harold Hill Grammar School.

Unfortunately, the majority of this damage was left uninsured and money was being channelled into the war effort as you would expect.?However, in 1941 the War Damage Commission set up the War Damage Act 1941 which was principally used to cover damage, but not repair to, buildings, the land and fixed plant and machinery too.?I believe repairs would be carried out locally or by ‘make do’ fixes until they could be tended to.

Split into 16 regions the commission was originally chaired by Malcolm Trustram Eve and was headquartered out of Mayfair Place in London.?It also went through several revisions during it’s time and to me the biggest impact was that it included the tenant under the Act which gave everyone certain rights which weren’t available before.

Now, to go back to our subject matter, what we know as The Blitz was a campaign that lasted from September 1939 to May 1940 and so it’s the effectiveness of the Commission wasn’t in effect beyond that of the prefab houses.?Prior to this, any war damage claims were reported to the Valuation Office of the Board of Inland Revenue who took on the unenviable task of assessing and administering to war damage claims.

Notification and claim forms (source https://upload.wikimedia.org/wikipedia/commons/b/b3/War_Damage_Commission_claim_form_c1_p2.jpg )

This system was clumsy and plagued with red tape and so where claims were made they could be tied up in an administrative backlog for some time.?The 1941 commission later revised in 1942 and 1943 was specifically designed for this task, but it still wasn’t insurance based as we know it but the principals were based in the roots of insurance and the definitions we use.

For example, the committee was responsible for assessment much like loss adjusting and then deciding if it was economic to repair.?It was then later decided to issue money to local authorities under Emergency Powers to administer to this.?I found this really interesting because the government took on the role of insurer here and in a short amount of time was able to set up a scheme to provide basic cover for the nation.?Moreover, I don’t think it would be viable for insurers to remain in place for very long during a war of that scale.?The majority of which would have gone bust long before 1942 and so for a government to step in on such a global scale was unprecedented at the time.

As the commission progressed it became more as an agent, with the board having overall responsibility in terms of policy and its responsibility to the likes of property owners and what we would see as insureds.?As it evolved the Act sought contributions via property owners as a pool of resource in addition to that provided by the government which the Inland Revenue collected on.

One of the far reaching things about the amount of damage to be rectified was that the board was only dissolved in 1964, and even then, it’s various arms were disseminated into the Ministry of Transport, Inland Revenue and other offices of government to carry out the remainder of the repair work.

One important thing I found was that after October 1st 1974 there was no further payments, rights or recourse on war damage although under a discretionary board there was some leeway here.?Interestingly this was in the form of unexploded bombs or ordnance which were not the fault of the insured.?If any such damage was caused by a dormant bomb then payment could be made.?I have to wonder how many people knew about this and how many actual claims were made given there was no internet in 1974 to research this.

September 14th, bomb damage to Buckingham Palace from a bomb dropped the previous day (source https://www.theatlantic.com/photo/2016/05/london-during-the-blitz-then-and-now-photographs/481851/ )

I’ll be honest, I could write on this subject far beyond this article.?The more I researched it the more twists and turns I found to it and the most fascinating thing to me was how long the evolution of the ‘insurance’ was.?I cannot express enough how I feel toward those who suffered at the constant threat of death or loss from this event as a whole let alone the Blitz.?So in conclusion I feel that although the responsibility for repair and rectification lay with the government in this case, the takeaway for me is that the insurance industry was largely unable to do much by way of it’s purpose.?However, I feel the principles and policies were the influence that crafted the War Damage Act and also changed the insurance industry in the post war years.?In regards to the subject at the start of the article, well, I think in a fast moving and technologically advanced event like this the insurance industry just isn’t (or wasn’t) quick enough to respond and as mentioned earlier most would have become bankrupt before the end of the Blitz.?I certainly wouldn’t like to be the actuary working on how to rate for this, particularly with the weight of loss of life on my shoulders.

As always, I hope you enjoyed this article and I’m always open to any feedback.?The views and opinions expressed here are my own and do not necessarily reflect those of my company.