Prediction by markets

Insurance markets can act as prediction markets. Adam Tooze writes in his book “The Wages of Destruction: The Making and Breaking of the Nazi Economy”,

The threat of war was obvious, so obvious in fact that the main global insurance market – Lloyds of London – ceased trading in war cover on property by the end of 1936. (p. 203)

There was a message there, which most people seem to have missed. Clearly the insurance industry thought war highly probable.