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Risk has been around since the beginning of time, and therefore, people have been trying ever since to share the risk and eliminate disaster. The basic concept of insurance is to spread risk; countries and their citizens needed an option to spread risk among large numbers of people. This is how the theory of insurance emerged.

History of InsuranceThe first methods of transferring or distributing risk were practiced by Chinese when merchants traveling through the river would redistribute their products across many vessels to limit the loss due if any single vessel capsized.

Many centuries later, the Greeks and Romans introduced the origins of health and life insurance in 600 B.C. when they created "benevolent societies" which cared for the families of deceased members, as well as paying funeral expenses of members. Later, in Europe, "friendly societies" existed in which people donated amounts of money to a general sum that could be used for emergencies.

In 1666, the great fire of London changed everything. When over 14,000 buildings were destroyed, people were searching for an answer. As a response to this insurmountable tragedy, a new business emerged for underwriters who formed insurance companies to offer fire insurance. The modern-day insurance industry expanded from there.

While insurance thrived in Europe, the early colonial period in America was different. Because the colonists' lives were filled with so many dangers, it was impossible to provide any type of insurance. The death rate was so high, there was no option for insurance or protection because the risks were simply too great. It took more than 100 years for insurance to establish itself in America, brought together by none other than Benjamin Franklin. Franklin added insurer to his resume in 1752 along with statesman, scientist, inventor or author. He offered the first fire insurance policy in America through the Philadelphia Contributionship. Benjamin Franklin helped to promote and make property insurance standard. From here, insurance expanded to include life, health and disability.
 
The first employer-sponsored hospitalization plan was created by teachers in Dallas, Texas in 1929 and this plan incorporated the first HMO concept, by requiring all teachers to use a specified hospital. After World War II, the employer-sponsored health insurance plans expanded because federally imposed wage and price controls prohibited manufacturers and other employers to offer higher wages. As an alternative, they began to offer health insurance benefits to their employees.

Since the days of the Chinese vessel insurance, insurance is always been in demand because people are always looking for ways to minimize risk. As the demand, range, options and policy variations became available, insurance companies were established, grew and expanded. With the onslaught of the internet, people can now get insurance from all over the country, and even internationally. Insurance is a global market with a limitless number of insurance options available to spread the risk across the globe and protect the customers they serve.


By Matt Reynolds - Google+
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