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History Of The Development Of Insurance In The World | INSURANCE

History Of The Development Of Insurance In The World

The term types of insurance that we know today have a long history dating back to BC. These types of insurance originate from a basic concept of insurance, namely mitigation of various risks or threats, which then develops and evolves along with the development of human civilization.

An example is the concept of risk mitigation that has existed since the time of the Prophet Yusuf. At that time, the prediction about the threat of famine made the Prophet Yusuf advised the King of Egypt to reserve crops in order to face the risk of famine that would occur in the future.

Then, in 2250 BC, the Babylonians recognized the term bottomry bond or bottomry contract, namely a guarantee for borrowing money made by the captain of the ship for ship operating costs. In 600 BC, India was also familiar with the practice of Bottomry and the Greeks also knew the same term in 400 BC. Then in 215 BC, the Roman Empire recognized the concept of protection against the risk of loss of goods on board due to maritime hazards such as storms or enemy attacks.

In 50 BC, a philosopher Marcus Tullius Cicero conveyed the concept of protection or guarantees for the safety of sending money and securities while traveling. In return, the protected party pays a premium to the guarantor. Then in 50-200 AD, Emperor Claudius issued a guarantee to the importer for all losses suffered due to hurricanes. Only around 200 AD, associations called Collegia were born which had a social purpose in order to raise funds for funeral activities.

So, in the following years, the concept of insurance began to develop properly which became known as the types of general insurance that exist today, including:

Sea Freight Insurance (Marine Insurance)

Insurance for transport by sea and land began to be organized in Italy in the XII century. This custom was then brought by Italian traders to England around the XIII and XIV centuries. Various records and past events were then compiled into the Marine Insurance Act 1906 (MIA 1906) which regulates the implementation of Marine Insurance. In fact, the sea transportation policy in Indonesia also refers to MIA 1906.

Fire insurance

Fire insurance was born in 1680 which was marked by the establishment of the first fire insurance company, namely The Fire Office or The Phoenix. The existence of this fire insurance originated from the big fire that hit the city of London in 1666. The fire which lasted for 4 days caused huge losses so that the rebuilding process was only completed in 1671.

Personal Accident Insurance

The birth of this personal accident insurance originated from the many accidents that occurred in the XIX century along with advances in engineering and industry. At that time, accidents occurred in the process of operating modern equipment, motorized vehicles, trains. In 1848, the first insurance company named The Railway Passenger Assurance Co was founded, which covered the risk of personal accidents in the operation of trains. However, this type of insurance later developed and covered the risk of other personal accidents. Even at the end of the XIX century, this type of insurance has guaranteed the risk of certain diseases. Furthermore, in the 20th century, it was expanded again to guarantee hospital care costs.

Employers liability insurance

This insurance was born in 1880 after the Employers Liability Act came into force. This law was later amended in 1897 with the publication of the Workment's Compensation Act because the Employers Liability Act 1880 did not fully guarantee that workers would receive security. Furthermore, in 1906, this regulation which only applied to certain companies was refined again to become WCA 1906 which applies to all types of companies.

Other Liability Insurance

The birth of the Employers Liability Act 1880 also became the forerunner of liability insurance. The risk of possible lawsuits from third parties actually began to be realized in 1875. Therefore, the birth of the Employers Liability Act 1880 at that time sparked the issuance of general liability insurance policies, especially for building contractors.

Burglary Insurance

The insurance company that pioneered this type of insurance was the Mercantile Accident and Guarantee Insurance Co., which issued its first policy in 1889. Previously, in 1897 a Lloyd's Underwriter had actually approved the expansion of fire insurance coverage by adding the risk of demolition.

Motor Vehicle Insurance

In 1898, the Law Accident Insurance Society created a form of motor vehicle insurance to follow up the enactment of the Locomotive on Highways Act 1896 which allowed transportation by motorized vehicles. Furthermore, in 1930 the Road Traffic Act was issued which became the basis for the enactment of compulsory third party liability insurance. The reason is, often people who suffer losses due to motorized accidents do not get compensation from the vehicle owner.

Engineering Insurance

This type of insurance covers risks when building or installing machines. This design insurance was born in the XIX century as a result of the frequent occurrence of catastrophic steam boiler explosions. In 1858, the first boiler insurance company was established which provided regular boiler inspection services and also insurance protection. Along the way, a number of regulations were born, such as the Explosion Act 1882 and the Factories Act 1937. In 1872, machine insurance (steam engine damage) and electrical equipment insurance around 1897-1898 were born, which were then followed by elevator and crane insurance.

Aviation Insurance

In 1931 insurance companies formed The British Aviation and General Insurance Co. Ltd and in 1935 formed The Aviation and General Insurance Co. Ltd. The background to the formation of this aviation insurance company was the high demand for insurance in the context of the use of airplanes for civil transportation.

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