Insurance has been around for how long?
January 31, 2023
Love it or hate it, the insurance industry plays an important role to help to mitigate risk and share risk from individuals to the larger community, plus support the public and private sectors.
We are very used to it just being available when we need it and we know it’s been around for years, but when was the very first policy created?
Insurance has a history that dates back to the ancient world. Can you believe it?
- In the ancient world, the first forms of insurance were recorded by the Babylonian and Chinese traders. To limit the loss of goods, merchants would divide their items among various ships that had to cross treacherous waters.
- As the ancient world evolved, maritime loans with rates based on favorable seasons for traveling surfaced.
- Around 600 BC, the Greeks and Romans formed the first types of life and health insurance with their benevolent societies.
- Standalone insurance policies that were not tied to contracts or loans surfaced in Genoa in the 14th century. This is where the first documented insurance policy came from in 1347.
Over the years different types of insurance policies have been created, as this practice spread around the world.
- Property Insurance can be traced to the Great Fire of London which in 1666 devoured more than 13,000 houses. The devastating effects of the fire converted the development of insurance “from a matter of convenience into one of urgency.
- Lloyd’s Coffee House was the first marine insurance company. In the late 1680s, Edward Lloyd opened a coffee house in London. This was during a boom of several hundred coffee house gathering places in London, many catering to certain social groupings of clientele. Lloyd’s clientele tended to be ship owners, merchants, and ships captains. This enabled Lloyd’s Coffee House to become a reliable source of the latest shipping news. Because of this, Lloyd’s became the meeting place for parties in the shipping industry to do business for having their cargoes and ships insured, with those willing to underwrite such ventures. These informal beginnings led to the establishment of the insurance market Lloyd’s of London and several related shipping and insurance businesses.
- The first life insurance policies were taken out in the early 18th century. The first company to offer life insurance was the Amicable Society for a Perpetual Assurance Office in 1706. The first plan of life insurance was that each member paid a fixed annual payment per share on from one to three shares with consideration to the age of the members being twelve to fifty-five. At the end of the year a portion of the “amicable contribution” was divided among the wives and children of deceased members and it was in proportion to the number of shares the heirs owned.
- The Railway Passengers Assurance Company was founded in 1848 as the first company to provide accident insurance. This operated much like modern disability insurance.
The history of insurance, you would agree is rather interesting and dates back centuries
Whilst much has changed, the basic concept remains the same – to provide support to people who face loss due to unexpected circumstances.