January 24, 2017

The history of business communication is, of course, closely linked with the histories of communication itself and that of business operations. When the two merge, they become a vital part of successful commerce.

Communication is the process where a concept is shared between two living things. It can occur as a gesture, sound or visually in the form of pictures or print. Some of the first forms of visual communication came in the form of pictographs. People conveyed stories, histories or instructions through a series of illustrations typically drawn on the walls of caves. The second stage of written communication appeared as crude alphabets used to create a written language. Mobility of communication also occurred at this time, with the writing being found on clay, wax and tree bark. The next leap was that of the printing press during the 15th century. Next came the magnificent technological advancement using air waves and electronic signals: radio and telephone.

At every stage of communication development, so did business practices. The advent of common alphabets and a written language mean that craftsmen could order raw materials from previously unattainable sources. Consumers living outside of town could order products from tradespeople in town without having to make the trip. Invoices could be written and paid, and purchase orders sent. One could even surmise that international business practices began around this time. Since exploration was taking place, and wonderful new things like spices and fabrics were being brought back home, sometimes now written business communication made it possible for vendors to offer their high-end customers the latest discoveries.

The printing press bought with it books, newspapers and catalogs bearing advertisements for local businesses. Businesses now had an entirely new way to draw in potential new customers. The latest advances in products could be advertised, as well as sales and new services offered. Catalogs were generally only printed by companies who could afford such a large expense, but for many families who lived in rural areas it was their only means of shopping.

Printed communication served both consumers and business owners well, but when the radio came into use at the end of the 19th century it revolutionized business communication once again. Now the products and services of every business could have been marked on the basis of mass communication. Once a household had a radio, broadcasts could reach far further than any newspaper or catalog. And it was instant. As soon as the message was spoken on the air, the word was out. When print ads were published it could sometimes take weeks or months for a response. Many entrepreneurs who saw the potential in radio became hugely successful. Their market share grows, and with it their profits.

Once radio took off, the telephone and television were not far behind. Of course, at first the telephone was not used for advertising in business, but more of a practical tool. Manufacturers could communicate with raw materials representatives, business owners could communicate with consumers and investors could …

It is exactly 100 years since the pride of the White Star Line, the RMS Titanic, hit an iceberg in the Atlantic Ocean and sank with the loss of over 1500 lives.

The centenary has prompted many insurance companies on both sides of the Atlantic to publish documents relating to the greatest maritime loss to date in relative costs, mostly showing their company's involvement with claims payouts.

When the Titanic sank on the 15th of April 1912, the Lutine Bell was run at Lloyd's of London, and a very rapid claims process was begun.

A few months earlier the ships owners, the White Star Line, had instructed insurance brokers Willis Faber and Co. To find cover for the hull, cargo, contents and personal effects of the ship. Willis Faber passed the 'slip' to their Lloyd's mercantile division where it was assessed and subsequently underwritten by multiple syndicates and insurance underwriters acting on behalf of members.

The Titanic's hull was insured for total loss for $ 5 million or just over one million pounds sterling at the exchange rate of the time. The policy also included total loss cover for cargo at $ 600,000 and contents at $ 400,000 a value equivalent to two hundred thousand pounds.

The original breaking slip passed around Lloyd's has been lost, but was photographed and can be seen in Wright and Fails book of 1928 called 'A history of Lloyd's'. It shows that seven large insurance companies took nearly forty percent of the risk between them and the other sixty percent was underwritten by over seventy individuals and Lloyd's 'Names'.

According to documents recently released by Willis the marine insurance policy cost White Star £ 7500 or $ 38,000 to insure the Titanic at a rate of 15 shillings per hundred. Modern day rates for cruise liners are significantly lower.

The Ship was significantly underinsured for a value of only five-eighths of its replacement cost. This was apparently because the owners thought the hull to be unsinkable and were prepared to bear the additional $ 3 million dollars of risk themselves.

Willis state that despite the owners belief in the vessel being unsinkable, they had trouble placing all the hull cover at Lloyd's and some forty thousand pounds was underwritten in Germany. There was also an extremely high excess or deductible of 15% of the insured value.

Four days after the Titanic sank the US senate held a preliminary investigation at the Waldorf Hotel in New York. The surviving officers of the ship presented their evidence to the panel describing the events of the sinking and signed what is called a 'protest' which enable insurance claims to be paid.

Incredibly White Star were reimbursed for the loss of the hull within seven days of the sinking, usually minus the excess, and fully paid up on cargo and contents losses within thirty days.

They were however grossly underinsured for their liability to others given the value of the people on board. Claims against the company exceeded …