History of insurance, from the first types to the present day

History of insurance, from the first types to the present day

Insurance is a way by which the risk of loss can be reduced by guaranteeing that the injured person will be compensated. Compensation is given out of the insurance fund, which is formed by insurance premiums.

Insurance is one of the main categories in the modern economy, in the market economy. At the same time, the history of the emergence of insurance goes deep into the old days, and originally existed as a mutual insurance, based on the idea of collective mutual aid.

The first types of insurance

The very first type of insurance was natural insurance. It implied the preservation of food, seeds in the community barns. Stocks were formed at the expense of natural per capita contributions. Such reserves were used in case of crop failure or enemy attacks, siege. Products saved the urban population from hunger in such situations, and for the peasant households were allocated material aid. Such insurance existed in the early stages of the state and in peasant communities.

Then the history of insurance developed into a new form. Gradually from the in-kind form insurance passes to the monetary form, and around the end of the fifteenth century the rapid development of insurance began. At this time the rapid growth of shipping, international trade began. At the same time, risks of loss of property during river crossings increased. That is why merchants and ship owners setting out on joint expeditions agreed to divide losses among themselves in advance in case of loss of property of one of the owners.

The first mention of insurance appears in 1347. It was in that year that the first insurance contract for a fee was concluded, which covered the carriage of cargo on the ship "Santa Clara" from Genoa to Mallorca. This indicates that the first beginnings of commercial insurance appeared, where risks were insured for the charging of a certain sum insured.

The first insurance companies

The first insurance companies begin to appear in the seventeenth century. Among all the companies, the British insurance organization Lloyd's stood out, carrying out its activities in the insurance of maritime cargo. This organization united several private insurers (underwriters), which carried out their activities on the basis of their financial capabilities. "Lloyd's members," the status given to people who got into the company, were obliged to pay premiums out of their personal funds if the risk for which the contract was signed suddenly occurred.

Gradually, in addition to insurance of maritime risks, insurance of other activities began to develop.

All in the same 17th century, when most houses were wooden and cooking, heating and lighting were provided by fire, there was a very high risk of fires. In the countryside, mutual aid was used in case of fire, when villagers helped the victims to build a new house, provided food and other things. In the city, where many craftsmen did not have time to help the victims, property insurance was practiced. Residents of the city paid premiums to insurance companies, and they, in turn, provided assistance to the fire departments, as well as paying compensation to the injured person, on the money of which the firefighter could rebuild a house.

A special place in the development of insurance is the Great Fire of London, which occurred in 1666, when the entire center of the city burned out. After this tragedy, the world's first "Fire Office" was formed and the development of fire insurance began.

Together with fire insurance, life insurance also began to develop, and companies engaged in this service began to be formed. And also in England appeared the first insurance company, which was engaged in life insurance of orphans and widows.

Gradually, from marine cargo insurance, fire and life insurance, other forms of insurance begin to develop.

And by the beginning of 1760 in Western Europe there were about 100 different types of personal and property insurance.

Nowadays the history of insurance is at its peak, and now it is possible to insure almost any material object or interest