A Brief Look at the History of Insurance
While there are various types of insurance, all are based on the same concept: that of transferring risk from an individual to a collective, thereby shielding individuals from major losses.
In this broad sense, insurance has been around for millennia. For example, as far back as 600 BC, Greeks and Romans had guilds called benevolent societies whose funds were used to care for the families of deceased members.
However, insurance as we know it today, with its premiums and probabilities, really dates back to the 17th century. Here's a brief history of how the insurance industry originated.
Marine insurance for chancy transatlantic crossings
In the 1600s, sea voyages were a lot riskier than they are today. (It's worth noting that this was an era when European countries and their colonies in the New World began shipping goods back and forth regularly.) This was a big problem for merchants shipping goods overseas: if the ship carrying their wares capsized, they lost everything.
The marine insurance industry was born out of a need to mitigate this risk. Its hub was Lloyd's, a coffee shop in London, where merchants and ship owners would meet to buy and sell insurance.
Famous French mathematician Blaise Pascale played an important role in this nascent industry. Pascale's triangle provided a means to express probabilities and therefore calculate risk.
Fire insurance for vulnerable homeowners in London
It's true that most people don't have ships and merchants in mind when they think about insurance. However, they likely do associate insurance with house fires.
Fire insurance dates back to around the same period as marine insurance. It originated in the years following the Great Fire of London in 1666, one of the most destructive fires in history. In the wake of this calamity, many underwriters who had been dealing in marine insurance created companies offering fire insurance. London homeowners began purchasing this form of insurance so that they'd be financially protected from fire losses in the future.
Nowadays, fire insurance is a key component of any standard home insurance policy.
Insurance brokers in Nova Scotia
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