Insurance History rose with the steam of coffee houses in the 13th century. Shipowners wanted to insure their ships and cargo against loss at sea. The concept was to spread the chance of financial loss among a large number. If 200 ships go out and 180 come back, premiums from the 180 are used to help reimburse the 20 that didn't quite make it. "We can't save the sinking ship, but we can help keep the company from going under with it."Interestingly enough, CARGO owners were assessed first for damage to or loss of ships. If your cargo damaged the ship, you paid for the damage. If a reef was struck, or something equally hazardous happened to the ship, all of the cargo shippers paid to get another ship floating.
The first large insurance company, and the most famous in the world today, is Lloyd’s of London.
This company was founded in 1689 by a group of men who met in Lloyd’s coffee house, Tower Street in London, and originally sold only ship insurance. His establishment was a popular place for sailors, merchants, and ship owners and Lloyd catered to them with reliable shipping news.
The shipping industry community frequented the place to discuss insurance deals among themselves. This arrangement carried on long after Lloyd's death in 1713 until 1774 when the participating members of the insurance arrangement formed a committee and moved to the Royal Exchange as The Society of Lloyd's."
United States Insurance History:
The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732.
In 1752 Benjamin Franklin launched the Philadelphia Contribution ship for the Insurance of Houses from Loss by Fire. Unwilling to see the new concept go up in smoke, Ben also invented the lightning rod to reduce the risk of having to pay off claims.
Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses.
In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance markets have become centralized nationally and internationally, state insurance commissioners operate individually, though at times in concert through a national insurance commissioners' organization.
Insurance History in recent years, some have called for a dual state and federal regulatory system (commonly referred to as the Optional federal charter (OFC)) for insurance similar to that which oversees state banks and national banks.
Today you can buy insurance on almost anything, a house, a car, a painting, even a life. But the first kind of insurance ever sold was probably for ships. There are records of ship insurance dating back to the days of early Rome, around 300 B.C.
The first person ever to be insured was a ship’s captain named William Gibbons, who was insured by a group of Englishmen in 1583.
Insurance History Of The Highest Payout.
The highest life insurance pay-out of all time was $18 million, paid to the widow of an American rancher in 1970!
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