Role of the Insurance Industry in Economic Development
What Role has the Insurance industry In Economic development?
The insurance industry has come a long way from ship owners, merchants and underwriters gathering in Edward Lloyd’s coffee house in London to discuss their marine voyages to new colonies of the British Empire. Over the years, Insurance has become essential in our everyday lives. Something we just can’t live without. Our Economics and Societies are growing phenomenal rates and have become more and more interconnected on the rest of the world, the risks exposed to us become more unpredictable and hazardous. The need to protect against unfortunate events has been around as long as human beings existed.
Individuals have always recognised their need to alleviate risks that have the potential to ruin the. At the dawn of modern history, widely dispersed groups of tightly knit hunter-gatherers, relied almost exclusively on clan relatedness as their only bulwark against the ever-present risk of death, debilitating injury and starvation. For those early ancestors, the concept of risk always existed, exclusively in terms of the physical persons of individuals, mitigated by the guarantee of personal and kin relationships, rather than objects and possessions.
(Buckham et al 2011, pp. 1-9).
According to Lopez and Raymond 1967, in antiquity, a sea loan was the first sign of transferring risk. A number of German and Italian jurists have regarded it as something close to insurance. It involved a ship owner promising to transport goods belonging to a merchant and at the same time providing a loan, somewhat of a guarantee. If the ship and the goods arrived safely to its intended destination, the merchant returned the loan but if they didn’t arrive safely, the loan was not returned.
From its origins in ancient times, the insurance industry has evolved into an essential service in our society
The insurance industry has come a long way from ship owners, merchants and underwriters gathering in Edward Lloyd’s coffee house in London to discuss their marine voyages to new colonies of the British Empire. Over the years, Insurance has become essential in our everyday lives. Something we just can’t live without. Our Economics and Societies are growing phenomenal rates and have become more and more interconnected on the rest of the world, the risks exposed to us become more unpredictable and hazardous. The need to protect against unfortunate events has been around as long as human beings existed.
Individuals have always recognised their need to alleviate risks that have the potential to ruin the. At the dawn of modern history, widely dispersed groups of tightly knit hunter-gatherers, relied almost exclusively on clan relatedness as their only bulwark against the ever-present risk of death, debilitating injury and starvation. For those early ancestors, the concept of risk always existed, exclusively in terms of the physical persons of individuals, mitigated by the guarantee of personal and kin relationships, rather than objects and possessions.
(Buckham et al 2011, pp. 1-9).
According to Lopez and Raymond 1967, in antiquity, a sea loan was the first sign of transferring risk. A number of German and Italian jurists have regarded it as something close to insurance. It involved a ship owner promising to transport goods belonging to a merchant and at the same time providing a loan, somewhat of a guarantee. If the ship and the goods arrived safely to its intended destination, the merchant returned the loan but if they didn’t arrive safely, the loan was not returned.
From its origins in ancient times, the insurance industry has evolved into an essential service in our society
Bibliography: Ayadi, R. and O’Brien, C. (2006) “The future of insurance regulation and supervision in the EU: New developments, new challenges” Buckham, D., Wahl, J Coomber, J. R. (2006) “Natural and Large Catastrophes– Changing Risk Characteristics and Challenges for the Insurance Industry”, The Geneva Papers, 2006, 31, (88-95) Kugler, M Liedkte, P. M. (2007) “What’s Insurance to a Modern Economy”, The Geneva Papers, 32, (211-221) Lopez, R Munich RE(2007)“The fundamental role of insurance”, available: http://www.genevaassociation.org/Portals/0/COP15_Munich_Re_presentation.pdf [accessed 25 October 2012]