Brief History of Insurance

BRIEF HISTORY of Insurance The main concept of insurance, spreading risk, has been around as long as human existence. From hunting in a group to spread the risk of being the one gored to death or shipping cargo in several different caravans to avoid losing the whole shipment, people have always been wary of risk and how to avoid it CHINA 3000 BC Tired of losing valuable goods in shipwrecks, Chinese merchants divided their goods evenly among the ships. 1790 BC BABYLON The first written insurance policy appeared on a Babylonian Each boat carried a mix of obelisk monument with the code cargo, not just one merchant's and a shipwreck meant a slight of King Hammurabi carved into it. loss for all rather than a crippling loss for one. It offered basic insurance in that a debtor didn't have to pay back his loans if some personal catastrophe made it impossible (disability, death, flooding, etc.). THE MIDDLE AGES Once apprentice craftsmen became masters, they paid dues to the guild that trained them. 1688 LONDON EDWARD LLOYD'S COFFEE HOUSE The wealthier guilds had large coffers that acted as a type of The start of the world's best known insurance underwriting society. SU, msurance fund. The investors would sign at the bottom of the manifest beneath Investors would contractually agree If tragedy befell a master's practice, such as fire or robbery or injury, the guild would use money from its coffers to support the master and his family until the money started to flow in again. the figure indicating what share of the cargo they were taking responsibility for (hence, to indemnify the owner if the goods didn't make it to their destination, in exchange for a premium. underwriting). AMERICA 1752 BENJAMIN FRANKLIN'S FIRE INSURANCE Benjamin Franklin founded America's oldest, continuously active insurance company Before a merchant would entrust his goods to a sea captain, he wanted a financial guarantee if his cargo ended up at the bottom of the ocean. Franklin and several prominent A single voyage would have multiple underwriters, who would try to spread their risk as well by taking business associates established the Philadelphia Contributorship for the Insurance of Houses from Loss by Fire. 1752 shares in several different voyages. The Contributorship refused to provide coverage to houses that were not constructed according to strict building standards. 1881 GERMANY OTTO VON BISMARCK'S WORKERS During the British occupation, the Contributorship hired a chimney sweep to maintain the chimneys of insured COMPENSATION INSURANCE First introduced between 1881 and 1884 in Germany houses that were still Maryland, Massachusetts, Montana OCcupied by the insured. and New York introduced workers' compensation statutes between 1902 and 1910, but were struck down under constitutional challenge as violating "due process." FIRST WORKERS' COMPENSATION LAW *The Wisconsln Workmen's Compensation Act of 1911 assured victims of work-related accidents or illpesses just compensation regardless of fault. With this law, enacted on May 3, 19I, Wisconsin became the first state to have a constitutional system for providing mgedical expenses, wage loss payments, or death benefits to employees or their families. The Jaw is regarded as a pioneering at of soeial legis lation and a major aecomphshment of Wisconsin's progressive movement, On Sepfember 1. 1911. the date the law Wisconsin in May 1911 became the first state to effectuate an ongoing fully effective. A mutual Insura becam began operations in a onecroam pice in down towin Wancam, The company, which was faemeditoy a groun of sentral Wieconeln businemen os a means of meeting their nesponsibilities under the new law, Is today known throughout the world as Wausau Insurance Coinpanies. workers' compensation program that survived legal challenge. he purchaser of the first poliey Bsued by the fledgling Insurer was the Mosinee Baper Dations Grdtvalld aerken compensation Erected 1909 Sources: http://www.insurancejournal.com/magazines/features/2011/01/10/185786.htm http://www.investopedia.com/articles/08/history-of-insurance.asp https://www.esurance.com/info/car/the-history-of-car-insurance BusinessInsuranceQuotes ......-.......