When you think of insurance, it probably feels like a modern notion. In reality, the idea of insuring yourself and your goods is thousands of years old. Travel back in time to around 3,000 B.C. and you’ll find Chinese merchants who understood the risks of losing their merchandise in a shipwreck. Some of these merchants would band together and send their products out on a number of ships so that if one were to sink, they would lose a little profit, but their entire product base wouldn’t be a total loss. This same idea is a little how insurance works today. Money is collected by insurers, they keep it safe in a fund, and it’s then ready to be paid out in claims as needed.
For all those language lovers out there, this part is for you. “Insure” is a variant of “ensure,” which is also a variant of “assure.” For a long time, these three terms were used interchangeably in the English language. In the mid-1400s, the term “ensurance” showed up basically meaning “betrothed.” Then later, we get the term “insurance” in the 1550s referring to a marriage engagement. Marriage may seem a bit of an extreme situation to compare with a simple insurance policy of today, but you can see how “marriage” or “pledge” started to evolve into a term meaning fulfilling a pledge. And knowing marriage throughout history dealt heavily with reputation, money, or even credit and land ownership, it makes even more sense. Additionally, the term “sure” evolved from something more like carefree or free from dangers to security then finally to trustworthy and established. Slowly, insurance became knows as a security against loss, which is essentially what it is.
The oldest, continuously active, tenured insurance company in the United States was founded in 1752 by Benjamin Franklin and a few partners. It was called, and is still called, The Philadelphia Contributionship. It was initially modeled after insurance companies in England that were established as a result of London’s Great Fire of 1666. In Philadelphia at the time, fire damage was a great threat, so a few of these folks joined forces financially in a protection effort in case of fires. It included building standards for properties to meet, and even incorporated a hired chimney sweep to clean the chimneys in homes of those insured.
The first marine insurance company and oldest stockholder-owned insurer is Cigna. They started in 1792 as the Insurance Company of North America (INA). Their main priority was insuring the hull and cargo on ships voyaging from Pennsylvania to Northern Ireland. In 1794, they became incorporated and issued their first life insurance policy to a sea captain against a death at sea. Their initial policies even included benefits in case a Barbary Coast pirate captured the captain! You may not need to protect a cargo ship on its way to Ireland, but your auto heading to work is just as important. For all your insurance needs, reach out to Four Seasons Insurance.