The Origins and Role of Insurance in Society

The first chapter offers an overview of how insurance originated and evolved. Historically, mutual solidarity has been the foundation of the concept of insurance: giving mutual assistance to the needy, indemnification for those suffering injuries from an economic damage, group solidarity in marine traffic etc. From the tenth century the European population began to grow rapidly for at least three centuries so there was a significant growth in maritime traffic in the Mediterranean. One consequence was the birth of the first insurance contracts which responded to the need for protection against the risk of loss of cargo or ship during shipments. The first pre-insurance legal institutions were loans of maritime exchange (bottomry) and contracts of commenda. The forms of mutual solidarity described above represent archaic forms of insurance, and in the fourteenth century, there was the passage from mutual insurance to insurance for a premium. Since then and up until our time, four stages can be identified that mark out the development and sophistication in covering insurance needs over the course of time: the development of traffic and maritime routes, the growth in overland commerce, the expansion of urbanization and the effects of the first industrial revolution. The final paragraphs describe the different historical development of life insurance.