The History of Insurance
Where Insurance First Appeared
Insurance is an integral part of any modern economy. As a concept, it dates back all the way to ancient times. The history of insurance begins with the Romans and Greeks. They would redistribute their goods across a large number of vessels to curtail their losses, should one of their ships sink. This was the most rudimentary form of insurance, and it is nothing like the insurance we think of today. But it was insurance nonetheless.
Origin of the General Average
The next stage in the history of insurance came when the Island of Rhodes created a system called the “general average.” This allowed groups of merchants to insure their goods together. They would redistribute the collected premiums among the merchants if something were to happen to the goods. After the Great Fire of London in 1666, Nicholas Barbon created the first insurance system that would be recognizable in today’s world. When Nicholas saw the massive loss of property during the fire, he realised he could capitalise on people’s desire to protect their property.
From Fire Insurance to Health Insurance
He called it the “Fire Office”, created to insure brick and frame homes from the perils of fire. The first insurance office was opened in 1680 in London to insure homes against future fires. In 1694 the first concept of health insurance appeared. That along with accident insurance, which is similar to modern-day disability insurance. Insurance fraud was a large problem in these times, and there were many people who tried to beat the system.
The Ethics of Insurance in History
During the slave period in the 1800s, some companies would allow slave owners to take insurance policies out to cover the possible loss of their slaves. In case they died during the voyage across the Atlantic. This raised moral and ethical questions about what insurance could cover and what it should be used for. The first vehicle insurance appeared years after the first vehicles rolled off of the assembly line.
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