Governmental Conditions for the Economization of Uncertainty

The central place occupied by actuarial calculation in insurance is usually understood as resulting from the process of bringing the laws of large numbers to bear on archival data in terms of an 'insurance imaginary'. However, little attention is paid to the political and broader governmental conditions upon which actuarialism rests. Analysis of fire insurance in Australia indicates that despite urgings from other branches of insurance, the industry did not go down this 'scientific' track until well into the twentieth century. Instead, it relied on detailed individual inspection by insurance agents and a process of 'cumulative dangerousness' - adding up the multiple hazards discovered in each case and using this as a guide to setting premiums. The result was slow, expensive and cumbersome. But the industry was forced to adopt this approach because the built environment in Australian cities was so underregulated that nothing could be taken for granted. Only when adequately designed and enforced government regulations began to appear after the mid-1920s could fire insurance adopt actuarial techniques for economising uncertainty.