Insurance Info Evolution of Insurance – Know the best

The origin of insurance is lost in antiquity. The earliest traces of insurance in the ancient world are found in the form of marine trade loans or carriers’ contracts which included an element of insurance. Evidence is on record that arrangements embodying the idea of insurance were made in Babylonia, India and Sindhu at quite an early period. In Rigveda, the most sacred book of India and written behind the Indus river, references were made to the concept “Yogakshema” more or less akin to the wellbeing and security of the people. The codes of “Hummurabi” and “Manu” had recognized the advisability of provision for sharing the future losses. However, there is no evidence that insurance in its present form was practiced prior to the twelfth century.

Marine Insurance:

The Marine insurance is the oldest form of insurance. Under Bottomry bond, the system of credit and the law of interest were well developed and were based on a clear appreciation of the hazard involved and the means of safeguarding against it. If the ship was lost, the loan and interest were fortified. The contract of insurance was made a part of contract of carriage, and Manu shows that Indians had even anticipated the doctrine of average and contribution. Freight was fixed according to season and was expected to be reasonable in the case of marine transport which was then very much at the mercy of winds and elements. Travelling by sea and land were very much exposed to the risk of losing their vessels and merchandise because the piracy on the open seas and highway robbery of caravans were very common. Besides there were several risks, many times, it might have been captured by the king’s enemies or robbed by pirates or got sunk in the deep waters. The risk to owners of such ships were enormous and therefore, to safeguard them the marine traders devised a method of spreading over them the financial loss which could not be conveniently borne by the unfortunate individual victims. The cooperative device was quite voluntary in the beginning, but now in modern it has been converted in to modified shape of premium.

The marine insurance policies of the present forms were sold in the beginning of fourteenth century by the Brugians. On the demand of inhabitants of Burges, the Court of Flanders permitted in the year 1310, the establishment in this Town of charter of Assurance, by means of which the merchants could insure their goods, exposed to the risks of the sea. The insurance development was not confirmed to the Lambards and to the Hansa merchants, it spread throughout Spain, Portugal, France, Holland and England. The marine form land lending prominence of Lombards merchants got a prominent section of the London city. They built homes there and took the name of Lombards Street. Later on, this street became famous in insurance history. The Lloyd’s Coffee House gave an impetus to develop the marine insurance.

Fire Insurance:

After marine insurance, fir insurance developed in present form. It had observed in Anglo-Section Guild form for the first time where the victims of fire hazards were given personal assistance by providing necessaries of life. It had been originated in Germany in the beginning of sixteenth century. The fire insurance got momentum in England after the Great Fire in 1666 when the fire losses were tremendous. About 85% of the houses were burnt to ashes and property worth of sterling hundred millions were completely burnt off. Fire Insurance Office was established in 1681 in England. With colonial development of England, the fire insurance spread all over the world in present form ‘Sun Fire Office’ was successful fire insurance institution.

Life insurance:

Life insurance made its first appearance in England in sixteenth century, the first recorded evidence in England being the policy on life of “William Gybbons” on June 18, 1653. Even before this date annuities had become quite common in England, and marine insurance had in fact, made it first appearance three thousand years ago. The life insurance developed at “Exchange Alley”. The first registered life office in England was the Hand-in-Hand Society established in 1696. The famous “Amicable Society” for a Perpetual Assurance Office started its operation since 1706. Life insurance did not prosper in the United States during the 18^th century, because of serious fluctuations in death-rate, but soon after 1800 some active interest began to be shown in this enterprise because of the application of level premium plan which had by then been in operation in UK for more than generation.

Miscellaneous Insurances:

The miscellaneous insurance took the present shape at the later part of nineteenth century with the industrial revolution in England. Accident insurance, fidelity insurance, liability insurance and theft insurance were the important form of insurance at that time. Lloyd’s Association was the main functioning institution. Now insurances such as cattle insurance, crop insurance, profit insurance and after the disintegration of USSR the changes in world’s politics the new form of terrorism insurance or even the natural disasters insurance are taking place. The scope of general insurance is increasing with the advancement of the society.