Insurance gets a bad rap for being a seemingly-dull industry, nothing could be further than the truth. As the oxygen of commerce, the insurance has a rich and extensive history - but how much do you know about it?
In this article we’re sharing three facts about the insurance industry you may not have known. Why? Because knowledge is power, insurance impacts everyone, and they’re just plain interesting.
1. Risk transfer was not ‘invented’ by Lloyd’s of London
Many think that the notion of insurance as a method of transferring and distributing risk originated in the 1600s with Lloyd’s, the humble coffee house that was then known for its expertise in marine intelligence and underwriting.
In reality, the history of risk transfer goes back as far as 3000 BC. According to SwissRe, Chinese traders in the third millennia BC were “some of the very first practitioners of risk diversification, dividing their wares between vessels to limit losses.” Elsewhere Babylonian traders and merchants throughout the Mediterranean were practicing their own systems of risk transfer. The Greeks and Romans are believed to have even developed their own health insurance programmes.
So while the modern concept of insurance was indeed developed and pioneered in Europe during the 1600s, the idea of risk transfer was not terribly new. For as long as there has been commerce, there has been risk - and risk management.
2. Insurance didn’t take off in the United States until the 18th century
It’s the largest insurance market in the world, but did you know that the United States was a latecomer to the insurance landscape?
Varying forms of marine, business and property insurance had already taken off in Europe by the 17th century, but the first insurance policies in Colonial America weren’t written until the early 1700s – more than a century after the first insurance legislation was enacted in the United Kingdom. One of the first insurance companies to be formed in America was The Philadelphia Contributionship, founded in 1752 by Benjamin Franklin.
Today the insurance market in the United States accounts for nearly 30% of total world premiums written, making it the largest insurance market in the world. By contrast, the second largest market – Japan – accounts for a mere 9.88% of total world premiums.
3. Iceland has the smallest insurance market
According to the OECD the smallest national insurance market (relative to the OECD insurance market total) is Iceland, followed closely by Latvia, Estonia and Slovenia.
This isn’t terribly surprising given that Iceland’s total population is just over 300,000. The country also recently experienced a traumatic financial crisis which saw the default of three of its major commercial banks. It has, however, managed to bounce back since.
Share your facts about insurance
Know of any other noteworthy or interesting facts about the insurance industry? Share them in the comments section below!