history of insurance
history of insurance

History Of Insurance From Babylonia Until Today

Now we will discus the history about insurance. At that time, the Babylonian people turn out to sophisticate in applying guarantees in trade or business. So that it has become common for merchants or creditors to lend a sum of money by providing a ship and some money as collateral.

The ship owner (borrower) will later consider free from debt. When he knows that the ship is safe during the expedition. In a sense, the ship that is use  as collateral is free and only then can its status as collateral revoke. Then, the amount of money  turns out to function as a premium that must pay for the amount of money or capital.

Development of Insurance in the 14th Century

Furthermore, in 1347, insurance began to develop in Genoa with the emergence of the first insurance policy on the type of maritime insurance. At that time, the explorers explore various parts of the world. Insurance premiums that have been paid are also differentiated based on the uniqueness of the risks posed by each person.

For information, Pedro de Santarém was the first to print literacy on insurance issues in 1552. Until finally, these notes continued to be developed during the Renaissance in Europe. The history of insurance and its types also develop with a more sophisticate system.

However, the history of insurance on the European Continent at that time still apply the old insurance system. This is because the people there still carry out the tradition of paying insurance premiums as compensation for family members who die and funeral expenses.

History of Insurance Developing in England From Export-Import Activities

Then, in the late 1600s, insurance had also develop in London when the British Empire began export-import activities with its colonies. At that time, there was already an official exchange belonging to the British Empire. Known as the Lloyd of London. Starting from that, underwriting practices began to occur in which Lloyd of London has a function as a bridge for merchants and capital owners to obtain insurance protection. About 50 years later, a Frenchman, Blaise Pascal invent the first probability calculator and actuarial table which is still use today to calculate insurance rates.

Fire in London As a Marker of the Development of Modern Insurance
In 1666 London fire insurance and life insurance products have also appear. This was due to a fire that destroyed around 14,000 buildings and an epidemic that also hit London before the great fire. The fire insurance is made by a group of underwriters who have handle shipping insurance for a long time. Then, came the name of life insurance.

About a few decades after the incident, insurance became hotly discuss and was in great demand by the people of Europe and America. Especially after the industrial revolution in which technology took over human hands for some jobs.

The Birth of the World’s First Insurance Company

Insurance also began to develop in the following years in England. Precisely in London, stood the first insurance company in the world. This company was found in 1688. Initially this insurance company emerge from a small coffee shop that was Edward Lloyd’s whose name as the name of the world’s first insurance company.

The insurance company offers a trade insurance product. That provides protection against the movement of export and import of cargo ships by sea. For the insurance coverage system, this is classified as very simple because as long as the ship transporting the trade goods does not happen.  The ship still gets their premium money.

Meanwhile on other continents, such as the United States, the first insurance company  at that time was Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. The company by the current President of the United States, Benjamin Franklin and several of his colleagues in 1752.

In addition, this insurance system is that contributors will refuse insurance claims submitted by customers. It happen if the house built does not comply with very strict building standards. Until this second, this fire prevention insurance company is still active.

The Development of Post World War Insurance

The emergence of the Wright Brothers, the inventors of the world’s first airplane, made the pioneers of new product breakthroughs. This product is the world’s first travel insurance. This idea start with James Batterson who state that risks can occur anytime and anywhere. However, this travel insurance is only specifically for class I and II only. In a sense, there are special boundaries between people who are able to board a plane and are considered special or exclusive.

Then in the 20th century, the history of insurance grew and was much needed by people in the world. Especially after World War I and II. In the aftermath of World War II, the world was entering a baby boom phase, also known as a population explosion. Please note, in the United States, all married couples get insurance protection with a percentage of up to 90 percent. Even though the economy at that time experienced a fairly drastic decline. There were several insurance companies that recover and develop their insurance products, such as: Allianz, Manulife, Cigna.

These companies have continue to develop in their respective countries for a long time and they also dare to make their first international expansion. The first country to be the destination is China and Hong Kong as the first expansion center.

This international insurance company has many product breakthroughs that are quite unique and are much needed by the community. For example, personal vehicle insurance (two and four wheelers), dental health insurance, and orphan insurance.

History of Insurance in Indonesia

Then, PT AXA Indonesia from France first made a breakthrough special insurance package for corporate groups. They cooperate with local and multinational companies by protecting the life and health of the company’s employees. Until now, many insurance companies have made acquisitions or joint ventures (purchasing shares) with local companies in various countries. This method turn out to be quite easy for these international companies to widen the requirements in the insurance industry of each country.

The history of insurance in Indonesia is also almost similar to other countries. However, that does not mean that in Indonesia there are no original Indonesian insurance companies. In fact, several names such as PT Asuransi Sinar Mas in Indonesia prove that local insurance can also develop and is no less competitive with international insurance. For information, the development of insurance itself consists of three main pillars. Namely currency exchange (currency), urbanization (urbanization) and development of actuarial theory (development of actuarial theory).

History of Life Insurance

Please note, in 1666 London success in giving birth to an insurance product, namely fire insurance and life insurance. The emergence of this insurance product shortly after the fire that destroy around 14 thousand buildings and the plague that hit London before the great fire. The fire insurance was initiated by a group of underwriters who had handled shipping insurance for a long time. After that came the name of life insurance.

About several decades after that incident, insurance had become a topic of conversation. It also much in demand by the people of Europe and America. Eespecially after the industrial revolution where technology had taken over human hands for some jobs.

For information, the history of insurance is from the middle ages of the European historical period to the time of the industrial revolution where insurance has spread to America rapidly. In this era, it can be said that labor unions live in inadequate conditions. In which capitalists have more power. Because of this unfavorable condition. The workers’ community become “group protection” to protect one another.

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