History of insurance
Wednesday, February 6, 2008 | | |In a sense, we can say that insurance appears simultaneously with the emergence of human society. We know two types of economy in human societies: saving money (with markets, money, financial instruments, etc.) and not money or natural economies (excluding money markets, financial instruments and so forth). The second type is an older form than the first. In such an economy and community, we can see insurance in the form of people helping each other. For example, if a house burns, members of the community help build a new one. If the same thing happen to his neighbor's other neighbours must help. Otherwise, neighbors will not receive help in the future. This type of insurance has survived until today in some countries where money modern economy with its financial instruments is not widely available (for example countries on the territory of the former Soviet Union).
Regarding insurance in the modern sense of the term (ie, insurance in a modern cash economy in which insurance is part of the financial sphere), the early transfer methods or distribution of risk were performed by Chinese and Babylonians operators from the 3rd and 2nd millennia BC, respectively. Merchants Chinese who travel treacherous river rapids redistribute their goods in many vessels to limit losses in a single capsizing of the vessel. The Babylonians developed a system that has been recorded in the famous Code of Hammurabi, c. In 1750 BC, and put into practice in early Mediterranean sailing merchants. If a trader has received a loan to finance his expedition, he should pay the lender an additional sum in exchange for guaranteeing the lender to cancel the loan should be sending flight.
Achaemenian monarchs were the first to insure their people and has been officially recorded by the insurance governmental notary. The insurance tradition has been carried out each year in Norouz (beginning of the Iranian New Year), leaders of different ethnic groups and others willing to take part, presented gifts to the monarch. The largest donation was presented during a special ceremony. When a gift is worth more than 10000 Derrik (Achaemenian gold coin), the question was registered in a special office. This has been beneficial for those who present such gifts. For others, the gifts were fairly assessed by the confidence of the court. Then, the assessment was registered in offices.
The purpose of registration is that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court help. Jahez, a historian and writer, wrote in one of his books on ancient Iran: "[W] Henever the owner of this is a problem or wants to build a building, set up a party, her children married, so a in charge of this issue in the court to verify the registration. If the amount exceeded 10000 Derrik registered, he or she will receive an amount twice as much. "[1]
A thousand years later, the inhabitants of Rhodes invented the concept of "average". Merchants whose goods were shipped together, pay a premium divided proportionally to be used to repay any merchant whose products have been thrown overboard during the storm or depression.
The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "corporate welfare" that supported families and paid the funeral expenses of members for death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of property insurance. Before insurance was created in the late 17th century, "societies" are in England, where people donated money to a sum which could be used in case of emergency.
Separate insurance contracts (ie, insurance policies not bundled loans or other types of contracts) were invented in Genoa in the 14th century, as well as insurance pools backed by pledges of landing areas. These new insurance contracts allowed insurance must be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance has become much more sophisticated in the post-Renaissance Europe, and specialized varieties developed.
Towards the end of the seventeenth century, London importance increasingly as a centre of trade increased demand for marine insurance. In the late 1680, Mr. Edward Lloyd opened a coffee has become a popular haunt of ship owners, merchants, ships and captains and, therefore, a reliable source of the latest Shipping News. It became the meeting place for parties wishing to secure cargo and vessels, and those who are willing to support such initiatives. Today, Lloyd's of London remains the largest market (note that this is not an insurance company) for marine and other specialist types of insurance, but it works differently than the more familiar types of insurance.
Insurance as we know it today can be attributed to the great fire of London, which in 1666 devoured 13200 houses. In the wake of this disaster, Nicholas Barbon opened an office to ensure buildings. In 1680, he created the first England Fire Insurance Company, "The Fire Office," to ensure the brick and frame homes.
The first insurance company in the USA subscribed fire insurance and was trained at Charles Town (modern-day Charleston), South Carolina, in 1732. Benjamin Franklin helped to popularize and make the standard practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses losses by fire. Franklin company was the first to contribute towards the prevention of fires. Not only is his company to guard against risks of fire, he refused to insure certain buildings where the fire risk was too great, like all wooden houses. In the USA, regulation of the insurance industry is very fragmented, with the primary responsibility assumed by the State Insurance. Considering that insurance markets are centralized nationally and internationally, State Insurance Commissioners operate individually, although sometimes in a concert by the National Insurance Commissioners organization. In recent years, some have called a dual state and federal regulatory system for insurance similar to that which oversees state banks and national banks.
Regarding insurance in the modern sense of the term (ie, insurance in a modern cash economy in which insurance is part of the financial sphere), the early transfer methods or distribution of risk were performed by Chinese and Babylonians operators from the 3rd and 2nd millennia BC, respectively. Merchants Chinese who travel treacherous river rapids redistribute their goods in many vessels to limit losses in a single capsizing of the vessel. The Babylonians developed a system that has been recorded in the famous Code of Hammurabi, c. In 1750 BC, and put into practice in early Mediterranean sailing merchants. If a trader has received a loan to finance his expedition, he should pay the lender an additional sum in exchange for guaranteeing the lender to cancel the loan should be sending flight.
Achaemenian monarchs were the first to insure their people and has been officially recorded by the insurance governmental notary. The insurance tradition has been carried out each year in Norouz (beginning of the Iranian New Year), leaders of different ethnic groups and others willing to take part, presented gifts to the monarch. The largest donation was presented during a special ceremony. When a gift is worth more than 10000 Derrik (Achaemenian gold coin), the question was registered in a special office. This has been beneficial for those who present such gifts. For others, the gifts were fairly assessed by the confidence of the court. Then, the assessment was registered in offices.
The purpose of registration is that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court help. Jahez, a historian and writer, wrote in one of his books on ancient Iran: "[W] Henever the owner of this is a problem or wants to build a building, set up a party, her children married, so a in charge of this issue in the court to verify the registration. If the amount exceeded 10000 Derrik registered, he or she will receive an amount twice as much. "[1]
A thousand years later, the inhabitants of Rhodes invented the concept of "average". Merchants whose goods were shipped together, pay a premium divided proportionally to be used to repay any merchant whose products have been thrown overboard during the storm or depression.
The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "corporate welfare" that supported families and paid the funeral expenses of members for death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of property insurance. Before insurance was created in the late 17th century, "societies" are in England, where people donated money to a sum which could be used in case of emergency.
Separate insurance contracts (ie, insurance policies not bundled loans or other types of contracts) were invented in Genoa in the 14th century, as well as insurance pools backed by pledges of landing areas. These new insurance contracts allowed insurance must be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance has become much more sophisticated in the post-Renaissance Europe, and specialized varieties developed.
Towards the end of the seventeenth century, London importance increasingly as a centre of trade increased demand for marine insurance. In the late 1680, Mr. Edward Lloyd opened a coffee has become a popular haunt of ship owners, merchants, ships and captains and, therefore, a reliable source of the latest Shipping News. It became the meeting place for parties wishing to secure cargo and vessels, and those who are willing to support such initiatives. Today, Lloyd's of London remains the largest market (note that this is not an insurance company) for marine and other specialist types of insurance, but it works differently than the more familiar types of insurance.
Insurance as we know it today can be attributed to the great fire of London, which in 1666 devoured 13200 houses. In the wake of this disaster, Nicholas Barbon opened an office to ensure buildings. In 1680, he created the first England Fire Insurance Company, "The Fire Office," to ensure the brick and frame homes.
The first insurance company in the USA subscribed fire insurance and was trained at Charles Town (modern-day Charleston), South Carolina, in 1732. Benjamin Franklin helped to popularize and make the standard practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses losses by fire. Franklin company was the first to contribute towards the prevention of fires. Not only is his company to guard against risks of fire, he refused to insure certain buildings where the fire risk was too great, like all wooden houses. In the USA, regulation of the insurance industry is very fragmented, with the primary responsibility assumed by the State Insurance. Considering that insurance markets are centralized nationally and internationally, State Insurance Commissioners operate individually, although sometimes in a concert by the National Insurance Commissioners organization. In recent years, some have called a dual state and federal regulatory system for insurance similar to that which oversees state banks and national banks.
Great ! I always wanted to know about the history of insurance, how it came into existence. I heartily thank you Indra for sharing all about the emergence of insurance.
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