Introduction and History of Insurance

What is Insurance? Introduction and History of Insurance Insurance provides protection against financial losses by Pooling the resources of policyholders

Introduction and History of Insurance Insurance is created when people like you and your neighbors pool their resources to protect themselves from loss If the risk of loss can be spread over a large enough group, the effects of the loss to any one individual can be minimized

Introduction and History of Insurance Where did insurance come from?

Introduction and History of Insurance “The Code of Hammurabi” Created by the Babylonians around 2100 B.C. to guarantee safe arrival of their goods by caravan

What types of perils would the caravan have faced? Weather Theft Breakdowns

Introduction and History of Insurance As history progressed, the need for insurance increased The Phoenicians and Greeks used insurance for their seaborne commerce The Romans were the first to use burial insurance

Introduction and History of Insurance The first Insurance Company was formed in 1688 in London (Lloyds of London) Merchants, Ship-owners, and Underwriters met at a coffeehouse to discuss how to protect the sea voyages

Introduction and History of Insurance Modern insurance traced back to the “Great Fire of London” in 1666 13,200 houses were destroyed Societies were formed to pool money for losses This event also created the need for modernizing fire fighting

Introduction and History of Insurance The first American Insurance Company was formed in Charleston, South Carolina in 1735 Fire Insurance Companies began spreading to New York City and Philadelphia

Introduction and History of Insurance Benjamin Franklin Founded America’s first successful insurance company Founded the first mutual insurance company Encouraged prevention by educating the public about fire hazards Refused to insure wooden buildings “An ounce of prevention is worth a pound of cure”

Introduction and History of Insurance Insurance is Big Business The United States Insurance Industry: Trillion dollar business Employs over 2.5 million people in US As the population ages and wealth grows the industry will continue to expand