We take a quick look into some history today and understand a little more about how insurance came about.
Life, throughout the written records of human history, was full of breakthroughs and successes. Yet every now and then there were catastrophic events that occurred on a grand scale and not so grand scales. (Think the Black Death and leaving the barn door open)
Concept of insurance defined
It turns out that human beings, the collective and social animals that we are, intuitively knew how to protect each other (in general) when things didn’t go so well for each other.
Insurance is basically the collective pooling of resources (of many) to safeguard the interests of one (or a few) if anything bad were to happen to the select few.
It is a method (or methods) for people to spread their risk around, central to the idea that social animals like us function best when everyone is doing fine. (think equality)
The Earliest Known Insurance Schemes
In agrarian societies, granaries were built for storage of food in lean times, contributed by various farmers. Those same farmers also had pacts to help each other rebuild houses if anyone had theirs destroyed.
In earlier sea faring communities, merchants would distribute their ware across different vessels to limit the loss of any particular capsize. These were the first known forms of insurance, and they were executed more on a barter basis than using money.
The Romans and Greeks introduced the origins of health and life insurance circa. 600 BC by creating guilds called “benevolent societies” which cared for the families of deceased members. Before insurance was established in the late 17th century, “friendly societies” existed in England, in which people donated amounts of money to a general sum that could be used for emergencies.
Rule, Britannica and writing your name
England, being master of the seas back in the day, naturally were the first to conceive modern insurance, abeit in a maritime sense .Lloyd’s of London which, in its early days, would accept some of an event’s risk in exchange for a premium (for example, a sea voyage that features the possibility of a shipwreck and the subsequent loss of cargo and/or even the crew members). The individuals paying the premiums would literally write their names under the text describing the possession or event for which Lloyd’s was assuming some risk; hence, the term written under or underwriting.
Onwards and Upwards
Since then we have come a long way. There is virtually a method of insurance for every industry and situation that you can dream of. David Beckham’s legs are insured for a princely amount when he was still an active footballer, and Rod Steward’s voice was backed by a cool 6 million pound insurance back in the 40s (around 15.5 million today, factoring inflation).
For the rest of the world there is fire insurance, property insurance, business insurance, professional indemnity insurance, accident insurance and even national insurance (see this post on SDIC to get an idea of what national insurance looks like)
We think that insurance *might* be here to stay.
www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.