Insuring the Titanic: the tale of the unsinkable ship

The Olympic and the Titanic were fully insured for a total of £1 million each

Have you ever wondered, who insured the Titanic? To delve into this part of the famous ship’s history, we go back in time to the year 1828, placing ourselves in the United Kingdom.

We begin with the establishment of Henry Willis & Company, an independent maritime insurance company founded by Henry Williams. Growing in the industry, Williams formed a partnership with the American firm Johnson & Higgins. This collaboration culminated in the creation of Willis, Faber & Co., which would build an extensive clientele in the maritime sector. By 1912, the partnership had a wide client base in the maritime industry, leading them to broker the unfortunate case of the Titanic.

On January 9, 1912, on behalf of the White Star Line, Willis, Faber & Co. insured both the Titanic and its sister ship, the Olympic. This process was facilitated by the widespread belief that both vessels were “unsinkable.”

According to Lloyd’s insurance market records, they secured the participation of most maritime insurance companies in London, with various subscribers assuming portions of the risk ranging from £200 to £75,000. By the end of January, both the Olympic and the Titanic were fully insured for a total of £1 million each.

Titanic coverage and payments

The coverage for the Titanic and the Olympic spanned a period of 12 months for the hull and machinery, with a value of £1 million assigned to each vessel. Insurers who signed on committed only to compensate for damages exceeding that predetermined amount. The premium, set at 15% without discounts, was notably low, totaling £7,500 for each ship.

During its maiden voyage on April 14, 1912, the 46,000-ton Titanic struck the submerged tip of an iceberg 350 miles off the coast of Newfoundland and sank in the icy waters of the North Atlantic in just two hours and 40 minutes. Following the news, reinsurance rates sharply rose, reaching 60%. This represented the greatest maritime risk in history up to that point, equivalent to 20% of the total capacity of the £5 million market at that time, with total losses in 1912 amounting to £6.75 million.

However, due to the unique risk distribution structure, the £1 million indemnity for the damage to the ship’s hull was fully settled within 30 days. Although the sums insured for life policies were substantial, most of them were backed by American insurers. The impact the Titanic has had on the maritime world is significant, serving as a reminder that no vessel is entirely invulnerable to sinking.