Medieval Genoa: how were the first insurance contracts drawn up?

Seafarers of antiquity knew how to share a loss, but there was no separate contract for "buying off risk with money". This step was taken in medieval Italy, in cities full of merchant ships such as Genoa and Pisa.

• Risk became a product of its own. Historians link separate marine insurance contracts, that is, pure insurance not combined with a loan, to 14th-century Genoa.
• One of the oldest documents. The University of Genoa researchers L. Piccinno and A. Iodice mention a Genoese policy drawn up by a notary on 18 March 1343; they also write that there had been an earlier agreement in Pisa.
• The often-cited document of 1347. A citizen of Genoa guaranteed the ship "Santa Clara", sailing from Genoa to Majorca. The document was written on the evening of 23 October 1347.
• The "becomes void" condition. As the text of the contract states, if the ship arrived safely within six months or changed its course, the agreement became void. In other words, the guarantee was given for a specific route and a specific period; the "period of insurance" and "territory" in today's policy start here.
• The notary's role. The contracts were written by a notary. This increased trust: if a dispute arose, the document was at hand.
• Be careful with claims of "first". Some popular websites state without question that 1347 is "the very first", but later research has pushed the date back to 1343. If new documents emerge from the archives, the date may change again.

Example (prepared by the author, hypothetical figures). The merchant Anvar is shipping silk worth 50 million soum. The guarantor Sardor takes the risk upon himself and receives a payment of 3 million soum for it (6%). If Sardor makes such contracts with 20 ships, he collects 60 million soum. If one of the 20 ships sinks, he pays 50 million and is left with a profit of 10 million. If two sink, he pays 100 million and suffers a loss of 40 million. Medieval guarantors likewise learned to spread their bets over many ships: the fate of one ship is unknown, but that of a hundred can be estimated.