An overview of the insurance industry ideally means gaining an insight into all things that are related to insurance. For ease of understanding, insurance overview is an analysis of the insurance industry. Here we shall try and gain an insight into the history of insurance, understand more about modern insurance, and briefly understand what is insurance and who needs it.
Origin of the Word “Insurance”
The word Insurance finds its origin from the late 14th Century, Anglo-French word “enseurer”, where “en” means “make” and “seur” means “sure”. The term insurance was derived as a variant of Middle English “enseurer”. Therefore one can say that insurance means to protect or safeguard.
History of Insurance
The recorded history of insurance dates back to almost 4000 years ago to Babylonian shipping merchants who wanted to protect their merchandise. They wanted to ensure the safety of their goods while in the passage, from pirates and unfavorable weather conditions. The well known and well-preserved Babylonian law book, “Code of Hammurabi”, mentions a system that was in place to safeguard the merchants in case of loss of goods at sea or stolen shipment.
The plain fact is that Insurance is as old as the formation of human society. Back when money was not in play Insurance took the form of communal help and support. In case of death and destruction of property, the whole community would rally support for the affected party. They would help them overcome the difficult circumstances by raising money or offering service.
In the medieval era maritime insurance was most popular as most of the trade routes were through the sea. The first known insurance contract was written in Genoa in the year 1347. The first book on Insurance was published by Pedro de Santarem, in the year 1552, and was called “On Insurance and Merchants’ Bets”.
Insurance as we know today came into being in the 17th century. The Great Fire of London in 1666 brought to the forefront the need for Property Insurance. Since then many forms of Insurance have come into being, some of which are mandatory and the others optional.
What Is Insurance?
Insurance is a means of protecting yourself and your assets against any future financial loss or eventuality. It is a contract where a company or state guarantees to indemnify the insured financially in case of specified loss (illness, death, damage or destruction) for a fixed premium.
Who Needs Insurance?
Speaking of today, one and all require insurance of one kind or the other. Future is unknown and as such nobody can know or predict for sure what will happen tomorrow. But one can take steps to ensure that no matter what the future holds, financially they will be secure. Insurance helps people to manage risk. Therefore, no matter what hardship befalls them they can come out of it with ease and relatively few scars. We live in a material world and hence it is all the more necessary to make sure that our assets are also safe from any damage or destruction. Once again this can only happen through insurance.