History of Insurance

„Insurance History

      Insurance is not a new concept. History of Early insurance goes back to the Egyptian times. It was known that around 3000 BC, Chinese merchants dispersed their shipments among several vessels to avoid the possibility of damage or loss. There are some insurance companies around today in the United States that provided insurance back in the mid 1700’s, as well as some that provided relief to banks during the 1930’s and the Great Depression.

„How did insurance originate?

„  The concept of insurance rose with the steam of coffee houses in the 13th century. Ship owners wanted to insure their ships and cargo against loss at sea.  The concept was to spread the chance of financial loss among a large number.  If 200 ships go out and 180 come back, premiums from the 180 are used to help reimburse the 20 that didn't quite make it.  "We can't save the sinking ship, but we can help keep the company from going under with it." 

„ Interestingly enough, CARGO owners were assessed first for damage to or loss of ships.  If your cargo damaged the ship, you paid for the damage.  If a reef was struck, or something equally hazardous happened to the ship, all of the cargo shippers paid to get another ship floating. 

„ By the 17th century Lloyd's of London evolved from the leading coffee house. 

„ In 1752 Benjamin Franklin launched the Philadelphia Contribution-ship for the Insurance of Houses from Loss by Fire.  Unwilling to see the new concept go up in smoke, Ben also invented the lightning rod to reduce the risk of having to pay off claims.

„Date Line

„ 2500 BC Babylonians insure goods in transit; transported by camel caravans. First Crime coverage. Insurance in form of loan taken by shippers and interest was the premium. The  coverage was only for armed robbery as caravans were frequently attacked by thieves and looted

 „2200 BC Babylon is the financial and trading center of the world. Code of Hammurabi contains details of various such insurance loan contracts

„ 1000 AD Anglo Saxon and Danish Guilds, reimbursed members suffering certain losses including fire and theft

„ 1100 AD Iceland Mutual Aid Societies for cattle loss

„ 1170 AD Church involved in Crime Insurance. Pope Gregory IX creates a form  of Burglary Insurance which survives in Southern France for centuries

„ 1865 AD Crime Insurance begins to spread rapidly throughout North America

„ 1937 AD Broad form of coverage Introduced. Destruction, Disappearance and wrongful Abstraction coverage added.

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