Hartford's signature industry — insurance — started by offering financial protection against fire damage, but as the property-casualty business evolved the biggest threat to property became weather in all its extreme variations: tornadoes, hurricanes, thunderstorms, hail, blizzards, ice and more.
Connecticut did not have the first insurance company in the world or even in the United States, but the trademark business in the state's capital city dates back hundreds of years. On April 14, 1794, Sanford & Wadsworth placed an ad in The Connecticut Courant for the Hartford Fire Insurance Office, insuring houses, household furniture, goods, wares and merchandise against fire.
"The origins of property insurance in the United States, and there really wasn't anything known as casualty insurance ... property principally was buildings and the principal threat was fire, whether it was commercial buildings or whether it was residences," said Robert Hartwig, president of the Insurance Information Institute in New York, a property-casualty research organization funded by insurers.
"That was for very obvious reasons," Hartwig said. "People cooked, they heated with fire. They used wood. They used coal. Eventually, they used kerosene lamps. And most structures were made of wood. So, fire was by far the greatest threat. This was the same in Europe. Virtually every major city in Europe had suffered a major conflagration. Cities like London had burned down repeatedly over [hundreds of] years."
The need to protect property against ravaging wind and other weather developed along with the migration of America's population from the East Coast to the prairies and farther west, Hartwig said.
The late 1800s brought a rapid expansion of the U.S. economy, growth in industrial might and a population boom that drove up demand for financial protection on property in a manner that was unprecedented, Hartwig said.
The St. Paul Cos. — which merged more than a hundred years later, in 2004, with Travelers Property Casualty Corp. — started offering cyclone insurance in 1882, and crop hail insurance in 1883, Travelers spokesman Daryl Richard said. In May 1897, the St. Paul Cos. charter was revised to include coverage against hail, tornado, cyclone and windstorm losses, Richard wrote in an email. Travelers began writing weather-related insurance policies in October 1924.
The Hartford Fire Insurance Company, incorporated in 1810, was limited by its charter to fire insurance. Most of the front page of The Connecticut Courant on Sept. 5, 1810, is an ad for the company with a woodcut image of a three-story house on fire at night atop a large-type ad offering "PROPOSALS for insuring HOUSES, BUILDINGS, STORES, SHIPS IN HARBOUR, AND ON THE STOCKS, GOODS, WARES AND MERCHANDIZE FROM LOSS OR DAMAGE BY FIRE."
"As all classes of citizens are exposed to the great calamities from fire, we presume that prudence will induce them to pay the small premium which is required for an indemnity against such accidents," the ad read in part.
It was many decades later that the Hartford expanded to other lines, according to the "The Hartford of Hartford," written by Hawthorne Daniel in 1960 for the company's 150th anniversary. By 1909, the Hartford was writing tornado insurance.
"Hail insurance, unknown not so long before, was widely in effect in 1914," Daniel wrote.
The first rain insurance, which covered the cost of hosting an event canceled by rain, was issued for a rodeo on July 3, 1920, in Dewey, Okla., according to Daniel's book. One modern outgrowth of rain insurance is wedding coverage, which will pay for expenses that can't be recovered if a wedding has to be canceled or postponed because of a hurricane or some other extreme weather.
The Hurricane of 1938, which devastated Connecticut two years after widespread flooding in 1936, was followed by a full page ad in The Hartford Daily Courant on Sept. 23, 1938, that listed 20 insurers and included photos of the destruction. "Everyone thought: It couldn't happen here! But it did and it may happen again," the ad read in part:
"INSURANCE is mankind's boon in time of catastrophe. The probability of hurricane, flood or fire may seem remote when you place your insurance….yet one NEVER KNOWS, as Hartford and Connecticut can attest today."
Another ad, on Oct. 2, 1938, from Aetna, asked in large letters: "Have you a CYCLONE CELLAR?" And it urged home and property owners to reconsider their insurance needs. "If you have learned through bitter experience that it pays to be prepared, we urge you to avoid further delay."
In the 1900s, hurricanes became a major costly event for insurers that offered policies on homes and cars and they continue to be costly today, although thanks to forecasting the death tolls are lower. The Hurricane of 1938 killed hundreds. The storm tore roofs off home and shredded buildings to splinters. The '38 hurricane also led to a greater number of homeowners and property owners increasing their insurance policies to include extended coverage — wind, not just fire, according to "Aetna Life Insurance Company: Its First Hundred Years" by Richard Hooker, published in 1956.
"For many insurers, the 1938 hurricane would have been their first experience with hurricane damage because before that there was not too much coverage in places like Florida," Hartwig said.
Aetna is a health insurer now, but the company provided property-casualty insurance for most of its history. For example, Aetna paid $8.24 million in 1954 to cover 44,152 claims from three hurricanes — Carol, Edna and Hazel. That's equal to $71.4 million today, adjusted for inflation.
The cost of major weather events to insurers has only grown since then. Insurers consider anything that does $25 million or more in insured damage a catastrophe. The inflation adjusted cost of U.S. catastrophes to insurers during a 20-year-period ending 2011 were as follows:
$161.3 billion for hurricanes and tropical storm.
$130.2 billion for tornadoes.
$28.2 billion for winter storms.
$14.8 billion for wind, hail and flood damage to commercial property covered by private insurance, but not including National Flood Insurance Program policies through the federal government.