History of Insurance

History of Insurance: Insurance has been known to exist in some form or other since 3000BC. The Chinese traders, traveling treacherous river rapids would distribute their goods among several vessels, so that the loss from any one vessel being lost, would be partial and shared, and not total. The Babylonian traders would agree to pay additional sums to lender, as the price for writing off the loads, in case of the shipment being stolen. This is starting of History of Insurance.

The inhabitants of Rhodes adopted the principle of the 'general average', whereby, if goods are shipped together, the owner would bear the losses in proportion, if loss occurs, due to jettisoning during distress.(Captains of ships caught in storms, would throw away some of the cargo to reduce the weight and restore balance. Such throwing away is called jettisoning).

The Greeks had started benevolent societies in the late 7th century AD, to take care of the funeral and families of members who died. The Friendly societies of England were similarly constituted. The Great Fire of London in 1666, in which more than 13000 houses were lost, gave a boost to insurance and the first fire insurance company, called the Fire office, was started in 1680.

The origins of insurance business as in vogue at present, is traced to the Llyod's Coffee House in London. Traders, who used to gather in the Llyod's coffee house in London, agreed to share the losses to their goods while being carried by ships. The losses used to occur because of pirates who robbed on the high seas or because of bad weather spoiling the goods or sinking the ship. 

In India, insurance began in 1818 with Life insurance being transacted by an English company, the Oriental Life Insurance Co. Ltd.. The First Indian insurance company was the Bombay Mutual Assurance Society Ltd, formed in 1870 in Mumbai. This was followed by Bharat Insurance Co. in 1896 in Delhi, the Empire of India in 1897 in Mumbai, the United India in Chennai, the National, the National Indian and Hindusthan Cooperative in Kolkata.This is normal overview of History of Insurance.

Later, were established the Cooperative Assurance in Lahore, the Bombay Life(originally called the Swadeshi Life), the Indian Mercantile, the New India and the Jupiter in Mumbai and the Lakshmi in New Delhi. These were all Indian Companies started as a result of the Swadeshi movement in the early 1900s. By the year 1956, when the Life Insurance business was nationalized and the Life Insurance Corporation of INDIA(LIC) was formed on 1st September 1956, there were 170 companies and 75 provident fund societies transacting life insurance business in India.

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