The History of Insurance

The concept of insurance is increasingly gainingregistered in a special office. This was advantageous
popularity even in India, though instead of being seento those who presented such special gifts. For
as a protection shield, its being seen as anothers, the presents were fairly assessed by the
investment. Insurance can be considered as aconfidants of the court. Then the assessment was
promise of reimbursement for specific potentialregistered in special offices.
future losses for a periodic payment between thePeople in Rhodes came up with the concept of the
insurer and the insured.'general average'. Merchants whose goods were being
How important is insurance really? An insuranceshipped together would pay a proportionally divided
product is designed such as to protect the life and/orpremium which would be used to reimburse any
the property of an individual, company or othermerchant whose goods were jettisoned during storm
entity from losses under unforeseen circumstances.or sinkage.
It would not be incorrect to say that the concept ofLife insurance and health insurance have been around
insurance is as old as that of human societies. In thesince 600 AD when the Greeks and Romans who
ancient times, if an individual's house burned down,organized guilds called "benevolent societies" that
the other members of the community helped build atook care of families and paid funeral expenses of
new one by contributing the necessary resources.members upon death. In the late 17th century
In as early as 3rd and 2nd millennia BC, the ChineseEngland, "friendly societies" existed where people
and the Babylonian traders' practiced methods of riskdonated funds to be used for emergencies. This was
transfer. The Chinese were known to redistributemuch before the concept of insurance was formally
their wares across many vessels to limit the loss duebrought in place.
if a ship sunk when traveling through treacherousIt was in 14th century in Genoa that came up the
river rapids.concept of separate insurance contracts which were
Insurance was practiced by Babylonians in form of anot bundled with loans. The insurance pools were
system, the famous Code of Hammurabi, c. 1750 BCbacked by mortgage of property.
and the by early Mediterranean sailing merchants. If aThe end of the 17th century, the concept of marine
merchant took a loan to fund his shipment, he wouldinsurance existed in a concrete form.
also pay the lender an extra sum in exchange for theThe modern day concept of insurance has its origin in
lender's guarantee to cancel the loan should thethe Great Fire of London, 1666 which destroyed
shipment be stolen.13,200 houses. This lead to the establishment of
The concept of insurance was also popular amongEngland's first fire insurance company, "The Fire
the Iranian Achaemenian monarchs of Iran who wereOffice," to insure brick and frame homes by Nicholas
pioneers in insuring their people. They went an extraBarbon in 1680.
step by registering the insuring process inThe first Insurance Company in the United States
governmental notary offices. Insurance was almostunderwrote fire insurance and was formed in Charles
ceremonial and was performed each year in NorouzTown (modern-day Charleston), South Carolina, in
(beginning of the Iranian New Year). The heads of1732. Benjamin Franklin popularized the practice of
different ethnic groups, as well as others willing toinsurance, particularly against fire in the form of
take part, presented gifts to the monarch. The mostperpetual insurance. In 1752, he established the
important gift was presented during a specialPhiladelphia Contributionship for the Insurance of
ceremony. When a gift was worth more than 10,000Houses from Loss by Fire.
Derrik (Achaemenian gold coin) the issue was