History Of Insurance

Introduction

It could be said that Insurance dates as back as mankind. Since his first appearance, man organized his life into communities, realizing that he could not cope with the dangers of prehistoric times, if he lived on his own. Organized in cave communities, he could find the required Insurance.

Either way, the concept of Insurance is clearly stated in ancient scripts or inferred from various events.

The principles of the institution of Insurance become untraceable around the 2nd millennium BC. In its primary stages, security appeared in the form of “inter-assistance” among individuals who executed a similar kind of work.

The conditions, under which the laborers of the pyramids in ancient Egypt worked, were miserable. They were plagued with many labour accidents and diseases. As a result, the first known “mutual aid fund” was formed, as was revealed in a papyrus found in the museum of Cairo.

Workers used to be paid in commodities like oil, grain and other foods on the first of every month. From their payment, they all gave a portion of food, so as to secure some for those who could not work. Moreover, the “mutual aid fund” provided for compensation in case of death, in order for the funeral expenses to be covered.

In ancient Babylon, in 1750 BC, King Hammurabi’s code clearly refers to a mutual aid fund for traders. In this code, we find terms, under which the members of caravans were required to be charged in common for any possible theft, loss of camel or any other damage caused ,even in cases of natural disasters. In the same code, we witness many more terms which stipulate the concept of civil liability and marine insurance.
Similar kinds of insurances also exist in other, subsequent codes in Mesopotamian countries.