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When insurance happens

Posted 24 January, 2016 by Surely
in Educate Yourself

The Neanderthal insurance agent

A group of Neanderthals wished to swing across a deep ravine.
In their prehistoric minds, they knew instinctively that it was a dangerous act.
Thus, they exchanged their babies so that each of them carried only one of their own during their crossing.
This is the first insurance ever, in the history of mankind.

The Neanderthal insurance agent

The Neanderthal insurance agent

Except that it may not be true.
Nobody really knows how insurance has started unless we build a time machine.
Some historians maintained that the first instances of known risk-sharing happened in 2nd-3rd millennium BC
That was when the Chinese and Babylonian traders started to distribute their risks among themselves for their journeys down some treacherous rivers.

How do that work?

Lets say there were10 traders with 10 boxes of their products each.
They had 1 boat each.
Instead of carrying 10 boxes of their own in their boat, each of them carried 1 of their own and 9 boxes that belong to the other 9 traders.
In that case, when one boat capsized, the loss would only be 1 box per trader instead of 10 boxes.

Pretty sure they had better boats than the Running Man ones

Pretty sure they had better boats than the Running Man ones

That does not look like any kind of life insurance.

Agreed. This is more applicable to general insurance which is insurance for non-living things.
It also shows that mankind has always cares about money more than their own kind.
Moving on….

In about 600 BC, the Romans and the Greeks had these guilds that took care of family of the deceased members and also the funeral expenses.
Guilds are made up of people who are plying the same trade.
They could be merchants, carpenters, blacksmiths, etc.

Your clan does not buy you insurance?

Your clan does not buy you insurance?

Anyhow, this should be the closest you can get to a primitive form of life insurance.
It is basically a small-to-medium size pool of people, getting together to take care of their financial needs of their families.
Quite obviously, someone thought along the line of “let’s get more people so that the pool can be larger and deeper!”
That is at least what the official story says but I figure that super-normal profits weigh more in their minds.

That gives birth to the insurance business and thus, insurance companies.
Insurers started to pop up in the 17-18th centuries, starting from Britain and outreaching to even America.
Insurance itself also begins to diversify as part of insurers’ efforts to widen their product range.
Accident insurance was one of the earliest adaptations.
After which, healthcare, endowment and Investment-linked policies were developed subsequently.
That is pretty much where we stand today.

Governments got into the act of insuring too.

Realizing that insurance can play its part in maintaining societal balance, governments all over the world have implemented nation-wide insurance schemes for its people.
A majority of these government insurance plans involves healthcare and rightly so, since medical care is one of the basic needs of a human being.
Some of these plans includes ObamaCare, National Health Service (NHS) and our very own CPF MediShield Life.
However, some may be funded by tax-payers (NHS) while others are paid by the citizens themselves.
No prize for guessing which funding system are we on.


Peeking into the future

Clearly wrote an interesting blog on Peer-to-Peep insurance model.
That may be the direction where the wind may be blowing.
Due to the internet age, the middle man’s value in linking up buyers and sellers is quickly diminishing.
Thus, insurers must be prepared to innovate, react fast and most importantly, take care of its customers before customers do it themselves.

This is also where we hope to make a difference – to be an unwavering lighthouse in the times of change.
Regardless of how the insurance industry changes, we shall guide you through it all.
With that, we leave you with the immortal words of Charles Dickens.


“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way.” 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.

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