History of insurance

History of insurance

Early methods:

Traders have sought methods to minimize the risks from the earliest times. In the photo, the Governors of the Wine Merchant Guild by Ferdinand Bol, c. 1680.The methods of transferring or distributing risk were practiced by Chinese and Babylonian traders and on the 3rd and 2nd millennia BC, respectively. [1] Chinese merchants traveling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to one capsizing the vessel. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to finance his expedition, he would pay the lender an additional sum in exchange for the guarantee of the lender to repay the loan should be stolen or lost at sea shipping.

Sometime in the 1st millennium BC, the inhabitants of Rhodes created the "overall". This allowed groups of merchants to pay to ensure their goods are shipped together. Premiums collected would be used to reimburse any merchant whose goods were discarded during transport either the storm or sinkage. [2]Independent insurance contracts (ie, insurance policies not bundled with loans or other types of contracts) were invented in Genoa in the 14th century, as well as insurance pools backed by pledges of landed estates. The first known data of the insurance contract Genoa in 1347, and in the next century widely and marine insurance premiums were intuitively developed varied with risks. [3]

 These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance.

Modern insurance:

Insurance became far more sophisticated in the Age of Enlightenment Europe, and specialized varieties developed.
Property insurance as we know it today can be traced to the Great Fire of London, which in 1666 consumed more than 13,000 homes. The devastating effects of fire make the development of certain "a matter of convenience in an emergency, a change of opinion is reflected in the inclusion of Sir Christopher Wren of a site 'Office of Insurance' in his new plan for London in 1667 ". [4] A number of systems of fire insurance attempts came to nothing, but in 1681, the economist Nicholas Barbon and eleven associates established the first company fire insurance, the "Insurance Office for Houses" in the back the Royal Exchange to ensure brick and frame homes. Initially, 5,000 homes were insured by the Bureau of Insurance. [5]

At the same time, the first systems insurance underwriting business projects became available. In the late seventeenth century, the growing importance of London as a center for trade was increasing demand for marine insurance. In the late 1680s, Edward Lloyd opened a coffee house that became the meeting place of the parts of the shipping industry wishing to insure cargoes and ships, and those willing to underwrite such initiatives . These informal beginnings led to the creation of the insurance market Lloyd's of London and several shipping and insurance related businesses. [6]

The first insurance policies of life were carried out in the early 18th century The first company that offers life insurance was friendly Society for an Office of Perpetual Assurance founded in London in 1706 by William Talbot and Sir Thomas Allen. [7] [8] Edward Rowe Mores established the Society for Equitable guarantees about life and survival in 1762.

It was the first mutual insurance company in the world and pioneered premiums based on age based on the death rate by which "the framework for the practice of scientific insurance and development" and "the basis of the guarantee modern life in which all life insurance plans are subsequently based. " [9]In the late 19th century, "accident insurance" began to be available. This operated like a modern disability insurance. [10] [11] The first company to offer an accident insurance was the Railway Passengers Assurance Company, formed in 1848 in England to insure against the growing number of fatalities in the nascent railway system.

In the late 19th century, governments began to initiate programs of national insurance against illness and old age. Germany made in the tradition of wellness programs in Prussia and Saxony began already in 1840. In the 1880s the chancellor Otto von Bismarck introduced old age pensions, accident insurance and medical care that were the basis for the welfare state in Germany. [12] [13] In Britain more extensive legislation was introduced by the Liberal government in the National Insurance Act 1911. This gave the British working class the first contributory system of insurance against illness and unemployment. [14] This system was greatly expanded after World War II, under the influence of the Beveridge Report, to form the first modern welfare state. [12] [15]
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