Insurance is a type of risk management primarily used to manage potential risks that are often associated with things such as purchasing a car, or buying a new home. So to put it simply it is a sort of transfer of risk from the insurance purchaser to the insurance company in exchange for a fee called a premium. There are many different kinds of insurance available, including hom
e insurance, life insurance, pension insurance , and health insurance.
Many historians believe that insurance can be traced back as far as ancient China. Records of risk transfer from ancient China and are as early as 3rd millennia BC where traders used to evenly distribute their merchandize across multiple boats in order to minimize risk of a single boat capsizing.
Some people say the insurance policy originated in Babylon at around 2000 BC. It started off as a contract for a loan to merchants that travelled frequently. The contract stated that if the merchant bore a loss in transit caused by a robbery the loss would be borne by the lending party. Now in exchange or compensation for this was that the borrower had to pay an exceptionally high interest rate on the loan.
The Greek and Roman version of life and health insurance was introduced in 600 AD. It was this time around that both nations organized guilds in which members would have a multitude of benefits including financial contribution towards their funeral, burial rites etc in exchange for a small regular contribution made by its members.
The Achaemenian (modern day Iranian) monarchs were one of the first to introduce insurance on a large scale to their people. The process was formalized via registration by the court. During the beginning of their new year the monarch would be presented gifts by heads of various ethnic groups. The purpose of these gifts was to ensure that the gift giver would be bailed out by the court and the monarch whenever they were in trouble. So whenever the gift giver needed financial assistance or was in trouble the court would first check the registration of the gift and if it exceeded 10,000 Derrik double the amount would be returned.
The insurance we know today was actually sparked by the Great Fire of London in 1666. With an estimated loss of over £10million the government not surprisingly looked towards a way of insuring its assets against any future fires, sparking of that insurance business that later became common with lawyer (Rechtsanwalt Leer) proessionals and noblemen of that era.