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Insurance is as old as the first traces of civilization in the world, can you imagine? Be it a risk of death in a car accident or a fear of being killed by a giant mammoth, humans have always been open to the risk of death and harm.
Researches show that the history of insurance with regards to it being a proper legal document from just being a verbal commitment dates back to the Babylonian empire, which is centuries ago, astonishing, isn’t it?.
Bottomry contracts are said to be the first insurance contracts known to the merchants of Babylon in the 4000-3000 century BC. It is also said that the Hindus had a similar kind of practice in 600 BC and in Greece such practices were traced as early as the 4th century BC. Under such contracts, loans were granted for shipping purposes and were not needed to be paid if the shipment was lost or destroyed in the sea.
Can you believe the present-day marine insurance is just an advancement of the centuries-old bottomry contract with almost similar pacts?
Now let’s dive deeper into the history of insurance and look at how insurance developed in different parts of the world:
The great fire of London led to the invention of fire insurance in 1666. Several insurance companies, most of which were fraudulent, were incorporated in 1711. Out of these the most prominent and successful insurance companies, whose incorporation marked the start of property and liability insurance were the London Assurance Corporation and the Royal Exchange Assurance Corporation.
How could a discussion about insurance be completed without Lloyd’s of London- the international market of insurance? It was patronized by various merchants, banks, and insurance underwriters and became the most trusted insurance company.
Philadelphia Contribution ship- the first insurance company in the United States was started by Benjamin Franklin. Moreover, the Presbyterian Ministers’ Fund was the first full life insurance company set in 1759.
By 1820 there were 17 insurance companies incorporated only in New York and many more in the entire country. Out of these companies, many failed due to poor management, fraud practices, and inadequate distribution units.
The era of the Civil War saw the worst phase in the history of insurance. Dividends were declared but not earned and advertisements exaggerated the policies looting the public. In the late and mid-18th-century, numerous insurance companies failed and the 19th century enjoyed a steady growth of the insurance markets.
During the 20th century there was a huge expansion in world trade and businessmen started investing outside their home countries, this led to the unstoppable growth of insurance companies worldwide.
The European and American countries remained to be the center of insurance markets and served the needs of other parts of the world.
The 20th century was the era when pet insurance was introduced. It first entered the USA in 1982, a dog named Lassie became the first pet to receive it because of her popularity.
In the 21st century, pet owners realized the importance of pet insurance. It became widely sought-after. In the year 2005, the USA had more than 500,000 insured pets.
Insurance for ages has been the most trusted measure to safeguard oneself and the family. It continues to keep up with its reputation and maintain people’s belief in them. Have you guarded yourself with insurance? If not, then now’s the time!