The History of Insurance
To decide the exact beginning of insurance or the first time that something was insured is not easy. In 2100 BC, traders in Babylonia assumed the risks of the caravan trade through loans that were repaid after the goods had arrived safely. The Romans used burial clubs as a form of life insurance, providing funeral expenses for members and payments for survivors.
The growth of towns and trade in Europe brought a need to protect members of guilds from loss by fire or shipwreck. By the middle of the 14th century marine insurance was practically universal among the maritime nations of Europe. In London, Lloyd's Coffee House was a place where merchants, shipowners, and underwriters met to transact business. By the end of the 18th century Lloyd's had progressed into one of the first modern insurance companies. Edmond Halley constructed the first mortality table in 1693.
With the growth of British commerce insurance developed rapidly in the 18th century. Prior to the formation of corporations devoted solely to the business of writing insurance, policies were signed by a number of individuals, each of whom wrote his name and the amount of risk he was assuming underneath the insurance proposal - hence the term underwriter.
The first stock companies to engage in insurance were chartered in England in 1720. The first American insurance company was founded in 1735. The Presbyterian Synod of Philadelphia sponsored the first life insurance corporation in 1759 for the benefit of Presbyterian ministers and their dependents.
The New York Fire of 1835 called attention to the need for adequate reserves to meet unexpectedly large losses. The great fire of Chicago in 1871 showed the costly nature of fires in structurally dense cities. Reinsurance, where losses are distributed among many companies, was devised to meet such situations and is now common in other lines of insurance.
The Workmen's Compensation Act of 1897 in Britain required employers to insure their employees against industrial accidents.
Public liability insurance began in the 1880s and attained major importance with the advent of the automobile.
In the 19th century states entered the field of insurance to safeguard workers against sickness, disability and unemployment.
Today you can find insurance to protect lives, homes, cars, and businesses from wind, fire, hail, earthquakes, hurricanes, tornadoes, liability, disability, long-term care, unemployment, life, cancer, health, critical illness and many more.