The History of Insurance
Summary Article By Mike Smith
car insurance
car insurance, travel insurance, life insurance
How important is insurance really? An insurance product is designed such as to protect the life and/or the property of an individual, company or other entity from losses under unforeseen circumstances.
It would not be incorrect to say that the concept of insurance is as old as that of human societies. The Chinese were known to redistribute their wares across many vessels to limit the loss due if a ship sunk when traveling through treacherous river rapids.
Insurance was practiced by Babylonians in form of a system, the famous Code of Hammurabi, c. 1750 BC and the by early Mediterranean sailing merchants. If a merchant took a loan to fund his shipment, he would also pay the lender an extra sum in exchange for the lender’s guarantee to cancel the loan should the shipment be stolen.
The concept of insurance was also popular among the Iranian Achaemenian monarchs of Iran who were pioneers in insuring their people. They went an extra step by registering the insuring process in governmental notary offices. The heads of different ethnic groups, as well as others willing to take part, presented gifts to the monarch. The most important gift was presented during a special ceremony.
People in Rhodes came up with the concept of the ‘general average’. Life insurance and health insurance have been around since 600 AD when the Greeks and Romans who organized guilds called “benevolent societies” that took care of families and paid funeral expenses of members upon death. It was in 14th century in Genoa that came up the concept of separate insurance contracts which were not bundled with loans. The insurance pools were backed by mortgage of property.
The end of the 17th century, the concept of marine insurance existed in a concrete form.
The modern day concept of insurance has its origin in the Great Fire of London, 1666 which destroyed 13,200 houses. This lead to the establishment of England’s first fire insurance company, “The Fire Office,” to insure brick and frame homes by Nicholas Barbon in 1680.
The first Insurance Company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732. Benjamin Franklin popularized the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he established the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Insurance has come a long way today
The Underestimated Value of Insurance
Summary Article By Sarah Martin
Insurance as an issue in business–the worth of insurance is typically greatly underestimated. This is partially the consequence of assuming a very tapered view of the insurance industry for, in assessing the value of any commerce enterprise, we must mull over not only the basic and obvious benefits which are the outcome from its behavior but also its more distant penalties (upon close examination it will be clear (1) that insurance executes a wide variety of functions for the business individual and the population which are frequently acknowledged without notice or approval and (2) that the abundant forms of insurance have in basic form very much the identical elements in sight ).
Insurance brings out security in business activities–a service which is ordinary to all forms of insurance–life insurance, homeowner insurance , credit insurance, bonding, title insurance, etc., and is to alternate for big and uncertain losses a minute but definite payment. By this it means that the business individual enters into a contract to disburse a relatively diminutive premium at fixed intervals, in exchange for the insurance company’s agreement to presume the risk of particular bigger losses which may or may not happen.
For example, while an individual may be aware that fires are consistently ruining business property and stocks of goods he is unable to determine how quickly his property will be affected, if ever. A revision of fire insurance statistics would demonstrate that on bakeries, for example, a particular percentage of loss due to fire may be predictable in a given time period. The constituent of confidence or guarantee is a fundamental one in every industry and to every individual and insurance supplies a means in which such confidence can be introduced where it likely did not previously exist.
Nor do other types of insurance fluctuate from fire insurance in this esteem, except in scale. In marine insurance we can also discover individuals and companies who, depending upon their familiarity of conditions and the understanding of the past, are prepared for a minute consideration to suppose the risks incident to conveyance of a vessel or a cargo over the ocean.
