Insurance is one of the things that we tend to take for granted. It seems to have always been there. But have you ever wondered about the origin of insurance? Who were the first people to be insured? What is the basic idea behind insurance? The basic idea behind insurance is 'guarantee against loss'.

The history of insurance is very interesting. If we look back into the history, we will come to know about who first felt the need of a guarantee against loss, and who gave them that guarantee. In Babylonian times, around 2100 B.C., the first basic insurance policy was Code of Hammurabi. It was paid by the traders in the form of a loan to guarantee the safe arrival of their goods.

With the progress of history, the need for insurance also increased. The Greeks and the Phoenicians wanted the same type of insurance with their seaborne commerce. For the very first time, Roman people had burial insurance which paid expenses of funeral to the surviving members of the family. In the medieval era, different clubs protected their members from the loss by shipwreck and fire, provided respectable burials, paid ransoms to pirates as well as support in sickness and poverty.

Then came the first actual insurance contract which was signed in 1347 in Genoa. These policies were signed by individuals, either in a group or alone. They wrote their name with the amount of risk they wanted to assume under the policy proposal. This is where the term underwriter has come from. By developing the first mortality table, Edmond Halley, an astronomer, created a base for underwriting life insurance 1693. He also combined the principle of compound interest and the statistical laws of mortality.

In the era of 17th and 18th century, the British commerce was growing rapidly. As the commerce grew, the risks also increased. The progress was actually working against the insurance policy. There were many ways of goods getting lost or damaged, as goods were shipped greater distances as well as by advanced methods. This became the reason for the higher payouts for claims.

At this point, everybody was getting into the swing of insurance. Many people accepted the fact that they required to pay premiums for protecting themselves and their loved ones in case of major as well as minor losses. In the 19th century, most of the societies were founded to insure the health and life of their members. Many employers offered group insurance policies to their employees, providing them life insurance, pensions, accident and sickness benefits.

Now insurance became the accepted thing to do. Everyone wished to protect themselves against many risks in life. Travelers wanted their travel insurance, many wanted deposit insurance at their banks, farmers wanted the crop insurance. They all turned to the insurance companies for the insurance as well as for peace of mind. And really, isn’t that what insurance is – the paying of a premium to protect against some form of loss.