The Success Story of Insurance Sector
The story of insurance can be traced back to 4000-3000 years ago during the era of Babylonian merchants who used to ship their goods across the world. During this time, the merchants used to get loans to facilitate their shipping activities while guided by contracts known as the “bottomry”. Under these contracts, the loans extended to the merchants were not to be paid in case the ships ferrying the cargo sunk and the goods were lost. However, interest was to be paid on the loan so as to cover the risk. This is one of the earliest forms of insurance and it highly gained popularity in the 15th century when the bottomry was recognized in the early Roman law. Rome was also a pioneer of the earliest form of life insurance where some members of the community used to form groups and do monthly contributions to a plan which would cover the members’ burial
Towards the middle of the 1600s, London was becoming the hub of the world trade. Merchants would gather at various coffee shops in the town to plan cargo insurance as well as have some charts amongst themselves. It was during this period when the term “underwriter” emerged whereby the insurer was supposed to sign his name under the contract document. Lloyd emerged as one of the most dominant insurers at this time and his companies are still operating to-date.
During this same period of the mid-1600s, a more friendly form of mutual assurance had begun to emerge from the Alps. Here, the farmers had started to come up with agreements to take care of each other’s livestock or children in case there was an illness or death. This is thought to be a form of health insurance which had begun to gain root in the region. As farmers migrated to urban areas, they continued with this practice and latter bigger life insurance corporations emerged especially in Zurich and Munich.
The diversification of the insurance to other areas such as fire incidents, vehicle accidents, and many others started around 1666 after the Great Fire of London. Royal Charter was one of the insurance providers who offered marine, fire, and life insurance policies after the fire. In the United States, Benjamin Franklin formed the first company known as the Philadelphia Contributionship. This company offered fire insurance services to around 15,000residents of Philadelphia since the year 1752. Author is an expert of trade insurance, click here for more interesting information.
Since then, many insurance providers have emerged not only in the United States but in all corners of the world. As is the case with life and health insurance, the motor traders insurance is also among the most common insurance cover worldwide. This type of policy protects the stakeholders in the line of motor trading business ranging from mechanics, tyre fixing, road risk, and many others. There is also a combined cheap motor trade insurance which covers more than one aspect of this business. This story about the development of the insurance sector is a good lesson to startup businesses to learn that Rome was never built in a single day.
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