AAI History

The Melbourne of 1862 was a young town, a lusty town, a town which boldly claimed the title of “Metropolis of the Southern Hemisphere”.

Here was a vigor fired by the discovery of gold in Victoria some ten years before, a vigor fanned by the fascination of gold and the wealth and prosperity it brought.

Gold, the magnet, had drawn the people to its fools' search so that by 1862, Victoria had the biggest population of all the Australian Colonies - 551,388 souls, of whom nearly 130,000 lived in and around Melbourne.

In 1862, this was Melbourne, the British Colony of Victoria….

Against this backdrop, on the 28th May 1862, the prospectus of the Australian Alliance Assurance Company was submitted at a meeting in Scott’s Hotel, Collins Street, Melbourne. A provisional Directorate for the new Company was appointed and this was composed of members of the Colony’s Legislative Council, including the Honourable (subsequently Sir) John O’Shannessey, who was then the Chief Secretary of Victoria.

The Australian Alliance Assurance Company was constituted two months later by a Deed of Settlement dated 24th July 1862. Its aims were “to transact Insurance against fire on every description of property. Life insurance in its various branches. Guarantee for Honesty in Situations of Trust.”

In just the third year of operation, the Directors negotiated the transfer of assets and liabilities of the Life Investment and Guarantee Business of the Colonial Insurance Company.

In 1864 there were only two local companies – The Australasian and The Victoria – conducting Marine business and Australian Alliance decided to enter its field appointing Dalgety & Co their London agent. In 1872 Australian Alliance undertook quite possibly its most important acquisition - The Australasian Insurance Company. A further purchase in 1895 added Southern Lloyds to the portfolio.

An extract from the 1903 Cyclopedia of Victoria, Vol.1, provides eloquent testimony to the standing of Australian Alliance at the time: “A company which has been able to quintuple its paid up capital, not by the ordinary process of making calls upon shareholders, but by the capitalisation of profits, during the forty years of its flourishing existence, must have transacted, as it still continues to do so, a great and highly remunerative business, and must have been, as it still is, conducted with the utmost tact, caution, ability and prudence.”

In 1909, Australian Alliance was purchased by the London & Lancashire Company and in 1911 it was decided that Australian Alliance should “carry on and transact all kinds of insurance business whatever”. The next decade saw a policy of vigour growth pursued.

During the four years of World War I it was business, as usual and the company’s income was inflated by its Marine business which in the months after the outbreak of hostilities were very high but reduced when the threat diminished with clearing of the seas of German raiders.

From 1923 onward, great concern was expressed continually at the unfavourable state of Motor vehicle insurance. That same year it was noted that accident business was becoming an important feature of revenue.

The far-reaching effects of the great economic depression of the late ’20s and early ’30s were starkly reflected in the premium income of the Australian Alliance.

By 1933, signs of early improvement were noted and two years later the financial position of the company was exceptionally strong. During the World War II, Australian Alliance maintained its premium income, although large fluctuations were experienced. Therefore it was not unit post-war inflation and the return of normal competition that any marked change took place.