It’s difficult to imagine a time when insurance wasn’t an integral part of managing risk for both individuals and businesses alike. But insurance has evolved over the millennia from something we would barely recognize to the products of today.

To understand the current insurance industry and all of its potential, it’s important to learn its past. Where will insurance will go in the next decade, century and beyond? The clue may reside in the interesting history of insurance.

It’s Older than You Think

The first recorded insurance product was “sold” over 5000 years ago. That’s 3000 BCe, in China.

In those days transportation was less reliable. A merchant could lose a year’s work if his wares didn’t make it to their destination. He wouldn’t be able to feed his family.

The merchants developed a clever plan in which many merchants would share many transport vessels. Their good spread among the ships rather than all being on one boat.

If a ship was lost, each merchant only lost a portion of their goods. Their fellow merchants each carried a portion of the risk. And so insurance was born.

Less than 2000 years later in 1790 BCe, the Babylonians developed a similar system to combat the risk of loss during transport. Lenders offered special business loans to merchants that would be considered paid in full if the shipment didn’t arrive at its location.

This system encouraged more merchants to finance transportation, thereby allowing lenders to earn more interest, offsetting the cost of the occasional lost or damaged shipment.

In More Recent History

Let’s take a brief look at the past several centuries before moving into modernity.

1666 AD

The Great London Fire destroyed over 13000 houses and other buildings. People who’d lived and worked in the same place for generations came to the realization that they could lose everything at no fault of their own.

This new understanding led to a new industry. The first casualty insurance company came into existence.

1751 AD

The concept of insurance as a way to manage risk spread through Europe. Those traveling to the “New World” adopted the idea. Benjamin Franklin promoted the concept of insurance as a way to prevent the devastation caused by fire.

On to the 19th Century

As the Industrial Revolution in the US approached, people became concerned about new kinds of risk. As new risks entered to the forefront, insurance companies developed new products to manage that risk.

Accidental Medical

In 1850, accidents that required costly medical care became a concern. More people were being injured by new technologies.

Insurance companies around the country who had previously insured primarily against fires added accident-only medical insurance to their lines of business.

Demand for New Building Codes

Here’s a piece of notable insurance history. Around this time the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire was instrumental in pushing for better building codes to reduce the chance of fires, thereby allowing agencies to lower their costs and the related premiums.

Life Insurance

Soon after, cutting-edge companies like these added life insurance to the number of risks as a person could now manage through insurance.

Life insurance took some time to catch on. Opponents saw it as an attempt to put a monetary value on human life. But soon more people recognized that it’s not putting value on a life, but the wellbeing of those who depend on them.

Car Insurance

As Henry Ford made cars more accessible to the average person, people were already well aware of the risk of injury from property damage from motor vehicles. Traveler’s introduced an accidental policy in 1864. By 1889, we already had car insurance policies somewhat recognizable today.

Growing Pains

The insurance industry was there to help offset risk in a world that many perceived to be more dangerous than days gone by. But with this came opportunities for people testing the industry’s limits, sometimes to the point of fraud.

By the early 20th century it became clear that the industry needed to be regulated to protect the consumer and the integrity of legitimate agencies.

By 1945, federal regulations were established to this end.

Health Insurance

During WWI, a wage freeze pushed employers to get creative to attract the best workers. Employer-paid health insurance emerged as a result.

Innovations and new product offering continue into the present.


The Internet has transformed the insurance industry in just the past several years. The quickly emerging “gig economy” is changing how many people acquire insurance. New risks and consumer demands get identified and gain steam every day.

This leads to new opportunities for agency growth and acquisitions. identifying and pursuing the opportunities will help ensure that your own agency continues to thrive.