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History of Insurance
History of Insurance | studynotes1.com
What is origin / history of Insurance
Insurance is a means of financial and social security for human life. It is also a cover for financial security. In the stressful life of the modern world, every person’s life has become insecure. Insurance is very important in terms of providing personal and family security. Insurance is the most popular method of risk transfer. This means that there is a promise to the insured to compensate for any possible future loss. Insurance is not just a word but insurance is used as an effective tool for risk management. In general, it is natural for human beings to be aware of the possibility of loss or damage to the life, property, life or property of any person due to any natural or unnatural causes. In general, nature has made every element, including human beings, aware of the protection of themselves and others. The question of bread arises when a person in your household has an accident or death. The sudden death of a member of the household can put other members of the household in serious financial trouble. Each person takes care of their family members in a different way. He makes sure that no one is bothered by your departure. It also creates physical resources. Every effort is made to bring happiness to every person. Insurance is a system designed for risk management. Even from human evolution, everyone thinks that his life should be safe. Risk transfers are made to compensate for losses caused by natural or unnatural causes or uncertainties.
History of Insurance | studynotes1.com
The concept of insurance in India dates back to Vedic times. The name of the headquarters of the Life Insurance Corporation of India is Yogakshema, derived from the Rig Veda. The word implies that the concept of insurance existed in India during the Vedic period. This concept was implemented by Arya around B.C.1000. Burial institutions were established in Buddhist times, as in ancient Rome, to help families, to build houses, and to protect widows and children, through which the concept of insurance existed even in Buddhist times. Social security was also being provided. This suggests that the concept of insurance has existed in India since ancient times. Also, Kautilya’s Arthashastra seems to have discussed the issues of state governance and security of states. Also, in the period before and after many B.Cs, the safety of the state and its people has been given an important place in the Indian tradition.
History of Insurance | studynotes1.com
The concept of insurance has been around since the 2nd and 3rd millennia, respectively. In the early days trade took place through rivers and seas. Chinese traders invented the methods of risk and transfer due to treacherous voyages of rivers and seas 5000 years ago. On the other hand, traders in Babylonian culture around 4,500 years ago, when there was a sudden loss of life and property at sea, they redistributed their ships from several ships to limit the damage caused by the capsizing of any one ship.
History of Insurance | studynotes1.com
A similar system originated in Babylonian culture about 4,500 years ago, as recorded in the famous code of King Hammurabi. This Code of Conduct is considered to be the first written legal code of conduct regarding insurance. This concept gave rise to the concept of ‘Maritime Contract’ or Bottomry. This is how the concept of marine insurance started from here. The agreement consists of three components: debt, interest rate and surcharge on eligible, cargo or cargo ships. Some merchants agreed to pay a certain amount of money to the merchant who came together, claiming that if a merchant had received a loan to send his goods, and if the goods were stolen or a natural calamity occurred while going to sea, the merchant would suffer huge financial losses. Also, if a loan was received for the shipment of goods and the goods were stolen or lost at sea, the lender would again pay the borrower an extra amount in return for a guarantee, and if the goods were delivered safely, the merchants would charge interest. This is how the insurance business originated in Babylonian culture. In the middle of the 18th century, a large number of their own industries were insured in England. But after 1750, as bills against West Indian merchants increased, so did the need for concessions.
History of Insurance | studynotes1.com
Thus some of Liverpool’s most important merchants began to operate in the banking business. These gifts were given to the king to protect him from various kinds of damage. At some point in the 1st millennium B.C., the inhabitants of Rhodes prepared a general average for insurance. This allowed groups of merchants to pay for insurance to ship their goods together. The accrued premium will be used to reimburse the trade for any reason such as storm or sinking, whose goods will be damaged or stolen during transportation. Friendly institutions existed in England before insurance was introduced in the late 17th millennium. In which people donated large sums of money for the general amount used for emergencies. In ancient Greece and Rome, in the year 600, various associations were formed under the name of Philanthropy. It also took care of the families of the deceased members and also paid for the funeral expenses of the members. Medieval organizations did the same. In this way the concept of insurance has existed since time immemorial. It continues in modern times with a variety of schemes.
History of Insurance | studynotes1.com
Especially with the development of trade and industry, as well as the rise of insurance companies after the Industrial Revolution of the 18th century. There are different types of needs at different stages in a person’s life. The big question is how to plan savings and risks by recognizing that. The concept of insurance is not just a concept of compensation, it has been developed in modern times to meet the needs of the future, education of children, health, pension, theft, riots, disasters, and protection from various kinds of losses. As a result, insurance has become an integral part of a person’s life.
History of Insurance | studynotes1.com
What do you mean by Insurance:
Insurance is considered a social invention. There are many disasters in human life. There is a man-made plan to face this disaster with courage. Any kind of natural calamity like rain, fleece, wind, storms, landslides, rains, excavations etc. Disasters arise suddenly. There are also some man-made crises. Social responsibility created by the human mind to protect against and protect economic interests from vehicle accidents, factory fires, boiler explosions, mechanical malfunctions, damage caused by terrorist acts, other accidents that may cause huge damage or loss. So the concept of insurance came into existence. The concept of insurance mainly consists of the following, as shown below.
History of Insurance
1. Cooperation between the two parties to the agreement
The emergence of the concept of insurance depends on mutual understanding and cooperation. Human life is full of various crises. In this concept of insurance, the two parties come together and try to reduce the specific loss based on the rules specified in the agreement. If every person has to bear the loss, he is likely to suffer huge financial loss. The two parties also come together to provide financial protection in case of death or disability of the occupant of the household as well as in case of closure of the business due to natural and man-made disasters.
2. Risk and Compensation
The two parties enter into a reconciliation agreement through an insurance contract. Based on that agreement, one party agrees to compensate the other party for possible future losses by accepting certain risks in the form of insurance premiums.
History of Insurance
3. Insurable interest
The insurance contract must have an insurable interest. The person or property in which the insured has an insured interest as stated in the insurance contract. The purpose of insuring is not achieved if the person or property does not have an insurable interest. Therefore, the insurance contract must be insured.
4. Indemnity
Compensation is an important part of the concept of insurance. In the concept of insurance, one party is contracted to compensate the other party for possible losses in case of loss or damage. In the general form of insurance, if any risk arises after the expiry of the term of the policy or before the expiry of the term of the policy as mentioned in the contract, compensation is paid as per the contract in the policy. Life insurance is a type of insurance in which the aforementioned losses are covered.
History of Insurance | studynotes1.com
