History of Insurance
Insurance has long been part of all economies and can say that it evolved with the very earliest of societies and economies. The earliest type of ‘insurance’ was the reliance on your community to help in times of difficulty, for example should you get sick then your community would help you.
Insurance as we know it today can be traced back to traders from China and Babylon over 5,000 years ago. In these times the shipment of goods across oceans was extremely treacherous and a merchant would usually take a loan to fund the shipment. This loan would then have a clause that would mean that should the journey end in the shipment being stolen or the ship sinking then the loan would not have to be repaid. In exchange for this condition to be applied they would pay an extra fee to the lender in the repayment of the loan.
Other civilisations such as the Roman and Greeks also used insurance in their economies to help protect their investments. The more modern type of insurance that we are familiar with is seen developing around the time of the great fire of London in the UK. The fire engulfed and destroyed over thirteen thousand houses and shortly afterwards Nicholas Barbon created ‘the fire office’ which would insure people homes. This then spread across the Atlantic and Ben Franklin helped to realise the popularity of fire insurance in the USA.
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