Believe it or not, insurance can trace its roots to the beginning of civilization itself. We've come a long way from hunting mammoths, but the basic principle of insurance —
And while you might be thinking, "Deductibles and date lines? Snooze-fest!" the history of insurance is surprisingly colorful once you start digging. Armed with this knowledge and very little else, we decided to trace it back some 5,000 years. And yes, that's definitely as ambitious as it sounds. But with the help of Esurance VP of Sales Thomas Capp, we conquered!
Now that we've got you on the edge of your seat, let's dig in.
3000 BC – Insurance Is Born
Like spaghetti and gunpowder, modern insurance can
So one day, these ancient entrepreneurs gathered near the town square, cooked spaghetti (probably not), and strategized ways to reduce each individual's shipping risks.
The solution, like so many other society-transforming ideas, was simple. By evenly distributing each merchant's goods to all of the ships, they could safely reduce their individual levels of risk. It was agreed, and from then on, a shipwreck became a collective downer rather than an individual catastrophe, a tenet of insurance even today.
1790 BC – Getting to the Bottom of Bottomry
Fast forward to Babylon, the civilization that mastered cuneiform script and brewing. With established trade routes stretching from the Mediterranean to the Persian Gulf, caravans and boats transporting goods faced a myriad of obstacles, from bandits and pirates to rough waters and inclement weather.
The risks of shipping began to outweigh the rewards. But shortly after 1800 BC,
This system, known as
800 BC – Cutting Your Generally Average Losses
More than a thousand years later, Rhodes, a small island in the south of Greece, had established itself as a major trading power in the Mediterranean with colonies in modern-day Spain, France, and Italy.
In order to minimize the risk of shipping goods and to help settle trading disputes, the Rhodians developed the earliest form of maritime law and adopted the principle of general average (which to this day, remains a fundamental insurance principle).
Here's
Knowing this could happen to anyone, merchants paid to insure their goods so that "what is sacrificed for the common benefit should be made good by
Sounds like the work of a few Rhodes scholars.
600 BC – Insurance Comes to Life…Literally
Known for their forward thinking, the Greeks and Romans established guilds known as "benevolent societies" or "burial clubs" that paid for funeral expenses and cared for each member's family afterwards.
Everyone in the club paid a weekly amount that went toward a common treasury. When a member died, a previously agreed upon sum was taken from the treasury and used to pay for proper funeral rites and the burial. And thus, the first life insurance policies were sold.
If
0 – Our Last Stop (For Now)
To paraphrase the great Isaac Newton, if we at Esurance have seen further it is only by standing on the shoulders of Chinese, Babylonian, Rhodian, Greek, and Roman giants. Which is not nearly as catchy as we had hoped.
Check back soon for part two...
Paul Thompson is a social media communications specialist at
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