History of Insurance

Some decades ago insurance is only to help others but as normal understanding we assume that insurance appears along with growth of human society. AT that time there was two type of economies in humans culture; first was natural or non monetary and second was modern money related monetary economies. The former one is more primitives and the insurance in such economies entails agreements of mutual aid. In the ancient time, if one‘s house is destroyed than the neighbors were committed to help to rebuild his house or recover him from the losses. And Granaries houses were another primitive form of insurance to help people against the natural loss. Due to local customs and beliefs this type of insurance were survived to the present time in some of the countries. Because there were modern monetary economy with its financial instruments is not exist.

Now take a move to the modern sense early methods of transferring and sharing risk was popular and used by Chinese and Babylonian Traders. As long ago Chinese traders travelling and redistributes their wares across many vessels to reduce the loss. At that time Babylonians found or invent a system which was able to record the popular Code of Hammurabi, according to that if a traders received a loan to handle his shipment work. For this he had to pay an extra amount to the lender in exchange for the lenders guarantee to cancel the loan against ship if ship is stolen or damages or lost in the sea.

Now moving to as insurance is came to modern insurance industry or company form. The first insurance companies were started in United States as underwrote fire insurance and was established in Charles Town in South Carolina, in 1732. Another person Benjamin Franklin helped to famous and makes a standard for modern insurance, especially against fire. In mid of 1752, he founded the Philadelphia for the insurance Houses from fire. And no doubt that Franklin’s company was the very first company to make contribution to the fire safety. But it would refuse to provide preventions against such buildings like made by the wood etc. Now regulation of insurance is popular in many countries with primary responsibility assumed by individual insurance department.

In modern era, insurance markets are become more centralized nationally and internationally. They performs their work like a overseas banks and national banks.