Darcy tilted his head, interest piqued. “How so?”
“Have you ever heard of reinsurance?”
Darcy shook his head. “No, the term is unfamiliar to me.”
“It is tied to property insurance,” Bingley explained. “After the Great Fire, insurance companies began to offer coverage for homes and businesses. But lately, those companies have realized the risks they face. They are making money while things are going well, but if, say, a fire were to devastate an entire area, it could ruin the insurer.”
“But do not those companies all insure different buildings in different places?” Darcy asked in confusion.
“Yes, but there are not many insurance companies, and many areas tend to use the same companies. On Mayfair, for example, my neighbors use my insurer— the Sun Fire Office— based on my recommendation.”
“As is true for Grosvenor Square; we use the Fire Office.”
“Precisely; it is largely on word of mouth. Additionally, the insurance companies are the ones who fund the fire brigades. It is more cost effective for them to have several properties in one area being protected by one fire
Darcy’s brow furrowed. “That makes sense.”
“But if a large fire were to break out one of those areas and be unable to be contained,” Bingley explained, “then the one company would be liable for much more property value than they would have in their coffers.”
“Especially since many have just now begun to include more than just the building and land, but also the contents of the building.”
“Exactly! More lately, these companies are realizing the risks they take on.”
“Naturally,” Darcy replied, “but what does reinsurance do, and how does it solve the problem?”
“By spreading the risk and establishing financial backers,” Bingley answered. “Essentially, the insurance companies that insure themselves with private investors. Gentlemen such as yourself offer to cover the value of claims higher than a certain amount. In return, you are granted a portion of the monthly insurance payments for that coverage.”
“And you are considering investing in this?”
Bingley nodded. “The Royal Exchange Assurance is one of the leaders in this, especially for the warehouses down on the Thames. They are looking for investors to provide capital, and I thought it could be an excellent opportunity. Profitable, but also necessary. These warehouses and docks are the backbone of commerce, after all.”
“It is an intriguing idea,” Darcy said thoughtfully. But you know the disdain many of the upper class have for ventures tied to trade.”
“Yes, which is why they approached me. I am already tied by trade due to my father, but the fortune is larger than many of the upper class. You know, I have never entirely understood why an accident of birth makes some people better than others.”
Darcy sighed. “It is a lot of nonsense, when you think about it. But I must say that I do prefer more refined company, and that often is something ingrained in a person since their birth.”
Guffawing, Bingley reached over to clap his friend on the back. “When have you ever preferredanykind of company, my friend?”
“Touche. I am just concerned for your status, that’s all. Investing could definitely improve your wealth, but not necessarily your position. Why are you so eager to strengthen your ties to yourfather’s past? I thought you said he wished for you to put it all behind you and enter the gentry.”
"I will not lie, Darcy,” Bingley said earnestly. “It is not just about the returns or even the risk. It is the idea of it—the practicality. These warehouses, these businesses, they are the heartbeat of London’s economy. Without them, society crumbles.”
Darcy regarded him with quiet respect. “You speak with conviction. It is refreshing.”
Bingley laughed lightly. “Well, that’s a first. Usually, my enthusiasm is dismissed as naivety.”
“Not by me. I just hope for the best for you, my friend. There are many benefits for not just yourself, but also for your family, if you become a landowner.”
Bingley grimaced. “I know, which is why I am a considering purchasing an estate. I would not have the capital to both purchase and invest. If I heed your advice, however, and simply lease for a year, then the investment can still be made.”
“Leaving you with a larger sum of money when you are ready to purchase.”
“Precisely, which means a larger estate.”
Darcy steepled his hands in front of his chest. “I actually think it quite a brilliant idea, Bingley.”
Shoulders relaxing, Bingley beamed in relief. “Excellent! I was planning on attending an informational meeting with them tomorrow; I will share the good news with them then.”
