The term insure is derived from the word ensure. It comes from the French term enseurer. En, means to cause, and sure, is to be free from doubt or, to be certain. Sure is traced to the Latin word securus. From this, se is to be free and cura means care. History has shown that to be free from care means to secura…enseuer…ensure…insure.

The concept of insurance has its origins in our earliest history. As long as there have been humans, there has been the need to “spread the risks,” so to speak. With time and experience, the techniques developed became less of an action in basic survival and more of one offering protection against unexpected losses. The crucial elements of insurance have always been “safety in numbers.” Therefore, the need to develop an understanding of this became evident. The study of time and its effects were quantified. The year was first broken into segments and counting developed. One skill led to another. Communication was needed to transfer information. The various parties had to be able to envision time, understand the risks and be prepared. Teamwork was vital to survival. As this timeline shows, the history of insurance begins as a natural instinct and develops as a valuable, learned trait. Along the way are the events which remind us to safeguard our own future and that of our family.

This week's Time piece...

1227 AD: Pope Gregory IX (1170-1221 AD) issued a Papal Seeforbidding the common practice of charging premium interest on maritime loans. The Papacy and theology were not against the principle of insurance, or methods used to spread the risk, per se, only interest rates deemed “usury,” or excessive. In order to continue the practice, the traders created independent contracts which separated the risk sharing from the loan contracts. These practices helped establish the first contracts for insurance type schemes and such important concepts as the principle of indemnity, subrogation and insurable interest.

1063 AD: The Amalfi Sea Code developed in Italy and provided a type of marine insurance for members. If a ship were lost at sea, the Sea Code stipulated that the merchant(s) were reimbursed from a pool of funds contributed by its members.

529 AD: The emperor Justinian I (527-565 AD) reigned over the Eastern Roman Empire for almost four decades. His greatest accomplishment was to compile the laws which had been used since ancient time, written and unwritten, including those dealing with the insurance-type activities governing maritime trade. Justinian’s scribes became known as the Roman Pandectsand were designed to unify the empire through a Corpus iuris civilis, or body of law.

230AD: Domitius Ulpianus, (Died 228AD) a Roman citizen, created tables used to fairly accurately predict the length of a human life –it was used for almost 2,000 years. Domitius used these in his work as an annuity dealer, selling financial instruments called “annua,” meaning annual stipends. For a lump sum payment, an investor could receive annual stipends for life.

44 AD: An emperor insured shipments of grain to Rome. Claudius Caesar (10BC-54AD) made this decision after having been heaped with both verbal and physical abuse at the forum by a mob of hungry citizens. A long drought had created a scarcity of grain. Following this incident, the emperor offered to reimburse merchants for any losses they suffered while transporting this valuable commodity to Rome and also made other investments in keeping the bread rolling.

300 BC: Other cultures had societies organized for the purposes of properly tending to the deceased and all other associated family matters at life end. They would be known by a variety of names but their goals were always to provide mutual aid, or benefits, to their members. The Greeks referred to their societies as Eranoi and Thiasoi.

400 BC: In Rome, burial societies provided a form of insurance after a member’s death. The collēgia fūnerātīcia, a cooperative association, collected affordable weekly payments. When a member died, the association would handle the funeral arrangements and, in some instances, even provide the widow with a small sum. Generally speaking, these arrangements were primarily for the poor as the upper classes could afford to pay the costs.

600 BC: In what is now Iran, the Achaemenian monarchs established an insurance law. When subjects bestowed gifts on the monarchs, it was recorded by the court. In essence, their gift’s purchased an obligation for assistance in times of need. To some extent, the amount of protection afforded was linked to the size of the gift.

900-800BC: The unwritten Rhodian laws were first formulated to ensure the continuity of travel and trade. These laws provide a set code to guide the admiralty and ship masters on the high seas as well as the recourse following incidents where perils reined. Originating from those living on the Greek island of Rhodes, these laws produced the foundations for the maritime laws, “lex maritime”, as they were known in Latin, and the general principles surrounding the general averaging formula.
“If therefore, for instance, two persons each had
merchandise valued at 20,000 sesterces and one
lost 10,000 due to water damage, the one with
the saved merchandise should contribute
according to his 20,000, but the other on the
basis of the 10,000.”

1760BC: Part 2: The practice of “bottomry” or “bottomage” emerged both as an early form of insurance and business investment scheme. In maritime law, the terms refer to the bottom of the ship, or keel, which became the collateral for a loan. The master of a ship could borrow funds against this for the maintenance of the ship or to purchase cargo. If the ship or cargo was lost, the borrowed funds were lost to the lender. If the ship arrived safely, the loan was repaid, with interest.
“It is provided by the Rhodian Law that where
merchandise is thrown overboard for the purpose of
lightening a ship, what has been lost for the benefit
of all must be made up by the contribution of all.”

1760BC: Part 1: The Code of Hammurabi was devised in Babylonia. It gave legal status for many different laws that could be construed as an ancient form of insurance. This code developed by King Hammurabi, dealt with such issues as theft, loss to crops and possessions, etc.
“If the robber is not caught, then shall he who was
robbed claim under oath the amount of his loss;
then shall the community, and . . . on whose
ground and territory and in whose domain it was
compensate him for the goods stolen.”

2500BC In Babylonia, traders provided loans to the caravans moving goods. These were repaid, with interest, when the goods arrived at their intended destinations. Alternatively, the loans were forgiven if the goods were lost.

3000BC: Evidence of marine insurance was first practiced in China. As the perils were greater on water than land, the need for some form of insurance there was greater. In essence, the origins of insurance can be traced to these earliest efforts. The quest began as to how to best spread the risk of moving valuable cargo through often unpredictable conditions. One early practice was to distribute the cargo over several vessels to ensure at least some of the load reached the destination intended. Spreading the risks even further, the cargo was owned by several families.

4500BC: In Egypt, the first calendars provided an unreliable form of crop insurance. This rather imprecise tool, based on the appearance of the star Sirius, helped with the crops and risks this entailed. There was less guess involved in predicting when the life sustaining rivers of the Nile would flood.