Sunday, June 30, 2019

History of insurance, what kind of development until now?

In fact, the history of insurance has existed since ancient times before A.D.. Since then, people already understand the risks and strive to minimize the risks that occur by making protection together.

 In this article, we will review the history of insurance starting from the first time ideas when the insurance appears until its rapid development in Europe and of course how the development of insurance in Indonesia.

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Insurance globally already has a age of thousands since it was created. There is a unique thing that you need to know about the intricacies, the events that are behind until the system that is used from antiquity to modern times today.

To make it easier for readers to understand the history and intricacies of insurance, the review of this insurance history is divided into several sub-chapters chronologically.

The history of insurance developments in the world, divided into several period ranges, from the events of the BC until the development of modern insurance in such sophisticated era. Here is the review of the insurance developments:

Insurance in the year 3000 – 2000 before A.D.
Insurance that is currently used as a method to divert risk, it is already used by merchants and traders of China and Babylonia (Iraq) since the era of BC. In the first, traders inhabiting around the Euphrat River basin and Tigris made use of vessels as a method of delivering goods.

Since then the Babylonia community has been sophisticated in implementing guarantees in trading/business. So it was a common thing for merchants or creditors to give loans a certain amount of money with a ship's guarantee and some money.

The owner of the vessel (money borrower) will be exempt from debt when he learns that the ship is safe in conducting the expedition. In other words the vessel that was guaranteed to be released can be revoked as collateral. Furthermore, the amount of money paid is functioning as a premium that must be paid for any amount of money or capital received.

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King Hammurabi, character behind the development of insurance in Babylonia
king hammurabi.jpg

In line with the growing trading system in Babylonia, precisely during the reign of King Hammurabi, the insurance system also develops with a better system. Actually at that time that applied is not an insurance system as we know, but rather on forgiveness of someone who has a loan.

So if something happens to force that the borrower can not return the money caused by natural disasters, death or other, then the borrower is exempt from payment.

If we compare with the insurance system in the present era we can consider it as an insurance policy, where there is a agreement both parties are mutually binding to fulfill its rights and obligations. The insurance policy of the time, precisely in 1750 was governed by the law of King Hammurabi or better known as the term Hammurabi Code.

Insurance in the Middle Ages of Europe to the Era of Industrial Revolution (1400-1800)
The use of insurance can also be tracked in the Middle Ages in the period of European history to the era of Industrial revolution where insurance has spread to the Americas rapidly. In the Middle Ages the insurance was already used by the trade unions who were then living in unworthy conditions where only financiers had power.

In the midst of a society that is strong with the laws of the jungle, the Labour community has had colonies with a common mission to protect each other. It is then encouraging them to create what the name ' protection group ' is.

In the protection of the group each member has an obligation to protect the other members. For example, if there was a member who was dismissed from the place where they were working, then the other member would help to be able to win his fate.

Likewise, when a worker has a lot of debt so that he cannot afford to pay, another member also assists in completing the debt, until someone restores his or her condition. In insurance terms now then we can interpret the event as part of the principle of insurance that is the distribution of risk borne jointly.

Insurance developed in the UK starting from export-import activities
In 1600 the end of the insurance also began to flourish in London when the British Government initiated export-import activities with its colony areas. That year there was an official exchange owned by the British government known as the Lloyd of London.

That's where underwriting practices initially occur. The Lloyd of London serves as a bridge for merchants and capital owners to obtain insurance coverage. After creating the funding of shipping to the world, where venture capitalists had a very important role in guaranteeing a portion of the cost of the cruise to the merchants who wanted to travel.

Traders consisting of the colony took some capital from venture capital with the risk distribution system borne by the entire colony.

This is where underwriting practices are written in the beginning. Hose 50 years later a French named Blaise Pascal invented the probability calculator and the first actuary table which until now is still used to calculate the insurance rate.

Fire and Soul insurance products known starting year 1666
In 1666 London also gave birth to fire insurance and life insurance products after a devastating fire of about 14 thousand buildings and outbreaks that hit London before the Great Fire. The fire insurance was triggered by a group of underwriters who have long been handling shipping insurance. After that it appears the name of life insurance.

Several decades after the incident, new insurance became a trend that was much in demand by the European and American communities, especially after the industrial revolution where technology has taken over human hands for some work.


  1. Hola nena!gracias por tu visita y por informar y compartir!!

    1. thank you for visiting my blog :)
      have a nice day

  2. Maaf, saya baru berkesempatan singgah di blog ni. Terima kasih kerana sudi comment di blog sy. I'll back soon utk baca dan comment lagi...see ya!

  3. Maaf, saya baru berkesempatan singgah di blog ni. Terima kasih kerana sudi comment di blog sy. I'll back soon utk baca dan comment lagi...see ya!

  4. Thanks a lot :D

    very interesting my friend

    InstagramFacebook Official PageMiguel Gouveia / Blog Pieces Of Me :D

  5. hahahah...., saya kok jadi berada di luar negeri nih, soalnya artikelnya keren dan bule banget. :)

    1. hehehehe iya gan, mudah2an aja CPC nya gede :)

  6. Hello, thanks for the information. Have a nice day

  7. Cerita asuransi dan sejarahnya sangat menarik. Bahkan kita banyak yang tidak mengetahui nya

  8. Very interesting I didn't know that!!

  9. Such interesting information! Have a great Monday!

  10. Interesting post, thanks for sharing!
    Kisses, Paola.


  11. Ein wirklich sehr interessantes Thema. LG Romy

  12. I have never been interested in insurance, tbh, but this was an interesting read!

  13. Thank you for this article, an interesting read.

    All the best Jan

  14. I've read that King Hammurabi was a notoriously bad driver.

  15. Interesting article. Have a sunny day.