Insurances and their developmentSeptember 19, 2018
Insurances and their development
In today’s modern world, where there is heavy traffic of everything in life, it is vital that we protect our valuables and secure them as much as we can. Today’s individual who is consumed by time seeks to climb up the ladder of success with all their might, and there is but one thing that can protect from that big fall, insurances. It seems something that is trivial and people often times take it very lightly; nevertheless, the wise strategic ambitious person will never take an extra step without it. People even argue that it is one of the greatest inventions as an ideology, but others believe that it is nothing but a scam that robs people out of their money. This is not the case; however, insurances play a major role in every person’s path from all walks of life. The thing that strays people away from insurance is something that is very simple; it is an action whose results and impact cannot be seen instantly. It is only natural that we get wrapped up in things that have to see instantly in this low attention span age. This results in people completely crashing out once they fail, the greatest thing about insurances though, is that is a long-term investment which you can make and forget about it completely and it will be there for you once you need it.
The question that arises is what is insurance; insurance is simply an arrangement deal or policy whereby the individual or the company holding get a compensation of return or pay off for the valuables they want to include with the state or the insurance company. These valuables may include property loss or damage, illness, and even life. But insurances cover many areas of life; for instance, insurances can even cover financial needs for your loved ones once the contracting individual passes away, it can help regain the momentum of a company’s progress in the case of a lost deal by financial providing and even pay off taxes and other debts. Other needs for insurances can be the compensation or prevention of loss, sharing risk, and even providing funds for investment. Therefore, insurances are not something that is going to take the people’s money away; it can even provide money once they make the arrangement.
Insurance categorization ranges in many ways as well, since it can be accustomed to one’s own lifestyle, in musicians and celebrities, they make insurances on their companies and even their body parts in the case of Kim Kardashian. The most common one perhaps is the life insurance deal, it involves a contract whereby the individual insures a sum of money to be paid off for a selected person or a company once the specific term agreed upon has ended. The second type is car insurance, these deals can even be involved in the general insurances, but they can be sometimes specific. The car insurance provides the paying off of a loss in case of an accident happening to the car or happening to the person. It can pay off the hospital bill or even give a sum of money as compensation. Another type is the general insurance, this is the deal whereby the person signing off the contract secures property included in the deal in case of fire, theft and various other risks such as hurricanes and natural disasters.
It is absolutely crucial to get insured on anything that you own of high value; as a matter of fact, it is important that you get insurance even if you do not have anything, as some companies provide a sum of money for new coming entrepreneurs. Another critical component of insurance is the legal protection from lawsuits, bankruptcy, false allegations and targeted accusations against the contractor. Insurance companies make sure they provide complete protection in those cases, and it is something that people are in dire need of these days.
The very idea of insurance is quite interesting, as the history of insurances is very rich and intriguing. It did not start off as one may think in a contract made on paper. As a matter of fact, the history of insurances dates back as far as human history goes. Humans were constantly at risk of being attacked by robbers and natural incidents. In the Babylonian times, roughly 3500 years BC, it was a form of trade for the person making the journey to make errands such as shipments or making deals since it was difficult for a merchant to travel great distances without experiencing a possible ambush from attackers, and this was called bottomry loans. Therefore, these traders needed a form a security and compensation in case any risk may occur. In addition to that, insurance, as we know it today, has been as old as ancient Greece and China as a big component of the trade culture, they would bid with the person in need of the insurance, if the person arrives safely then the insurer gets his fee of safe arrival, if the person was exposed to danger, then the insurer offers to pay for the merchandise lost and even help the merchant if need be. In the bottomry case, the people would even offer their cargos as an offer if the shipment was not made. A similar thing happened in ancient Egypt as a form of life insurance around 2500 BC, this was to cover for the burial and pay off a sum of money to the widows and successors.
The idea developed and appeared as the oldest form of written insurance contract found in the old Babylonian monuments in the code of Hammurabi. The idea developed slowly but surely throughout time till it became a company in form of marine insurance. This branch of insurance is the oldest known written legal contract which originated around the 12th -13th century in Italy as a well-established element of the shipment procedure. The progress was very prominent during that time till it came to Britain and became a paramount procedure in every growing or well-established company. In Britain around the 17th century, insurances were something that isn’t as common as today’s age. Nevertheless, the great London fire that burned 85 percent of the city which last for 5 continuous days was a wake up for the citizens of England. A large number of insurance companies emerged by 1711 as they were in high demand due to the fire, and by that time, the London Assurance cooperation and the Royal exchange assurance cooperation settled in as major historical companies in the insurance field as they dealt with liability and property insurance. Lloyd’s of London was another major step where people started to write their own insurance instead of companies to form an agreement to find underwriters for marine insurance, in Edward Lloyd’s as it became a center for all regulations made regarding insurances, even the process of shipment and exact fees to be paid off.
Lloyd’s was then recognized as an eligible hotspot of underwriters accepting marine risks around 1769, this became a very known company of insurance today covering an array of demands the people need today.
This progress made its journey to America as the concept of insurance grew more and people became more accustomed to it, but the settlers in America from England faced a lot of danger since no insurance company wanted to take their risk as it was an uncharted territory. Then the contract of the first ever insurance policy named the Philadelphia contribution came into being with Benjamin Franklin in the US in 1752, this contract was made mainly because the settlements and house in the territory were prone to fire since they were mostly made out of wood. This insurance policy came to not only enhance the welfare of the settlers in the land, but it was also to invite newcomers. Then a life insurance created around the era of the industrial revolution. This was yet another major step in the prosperity of Insurance companies as the people and companies became more open to that idea. New laws also emerged with the accident policy in 1864 up to the auto insurance policy in 1889, so it was clear that the progress was much faster in the US since it was a growing land where industrialists and investors saw large profit margin in taking action in the US.
The regulations of insurance policy in the US intersected with other laws as in 1935 the unemployment compensation came into being with big anxiety about the World War II. Life insurance also experienced a major increase since people who volunteered to go to war had to ensure their money and property to their widows and children in case they do not return back home. By 1989, there was a huge increase of insurance companies throughout the US as there have been more than 2200 registered life insurance companies and many other types emerging to fulfill the needs of the people. The difference between today’s insurance and the one in the past is today’s overwhelming influence in the market industry and the internet. Back in the day, people would go to the most prestigious companies to make sure their valuables are in check, but today, people can make a simple search to find out about the cheapest fees that would cover as many areas of insurance as possible. This global market blooming makes other companies compete with each other in aspects like the different rates, the number of insurances, the quality and the length of the terms covered. So it creates an integrated market where companies would compete for convenience and price points.
Insurance companies also grew immensely in other countries and areas of the world such as Europe, Russia and Japan which had a great improvement since the World War II, and Japan is leading the rank in the 20th century in the insurance company influence and it is second to the US in the quality aspect.
The evolution of the Insurance industry was inevitable with the new inventions such as the internet. This is crucial in the changes that have been made in contracts and deals, as there was a significant increase in the rivalry between the companies and the supply-demand issues they face. This made the companies substitute their high price point for a more reasonable one at the cost of quality. This evolution between today and the past is both harmful and beneficial as small business owners may suffer lower compensation and bigger business might have a bigger profit in crashing rather than making normal progress, making insurance companies change their policy according to the traffic of the company and the needs of the individual. Another major change is the individual or personal insurance as in the past, people would register in insurance for the sake of protecting their homes from fire or even protect themselves from theft, but nowadays people also need the legal protection from the insurance companies and this creates a friction in the competition.
Today’s insurance company state is ready for a big change in the very near future. As the need to upgrade the policies grows more apparent with the media’s influence, since people usually use the internet to navigate through the deals offers made; this has but one outcome, insurance companies will have to do more marketing than in the past. Moreover, people nowadays require more quality for lower price points and this really helps the newcomers arise and the well-established one to change their views on the policies they have set.
Insurance is something that is vital in each aspect of our lives; it is a paramount step to make sure you are safe in your legal activities and business venues. People often regret not having taken an insurance planning since they face hardships in their growth as individuals. Furthermore, today’s citizen is someone that is on the go, and we are often busy changing and improving our lives. Thanks to the big progress and variety that the insurance companies experience throughout time, we are able to register in an insurance company and forget about it till we need it. It makes life much easier since the contractor is able to feel safe and protected from any frauds or failures in life that might occur, and not be worried about the welfare of your loved ones. People can finally sign a contract to make sure their family is safe even after their death, that way you will be looking after your loved ones even when you are not there to do so.