History of insurance refers to the development of a modern business in insurance against risks, especially regarding ships, cargo, and

buildings ("property" and "fire"), death ("life" insurance), automobile accidents ("auto"), and the cost of medical treatment (health insurance). The industry has been profitable and has provided attractive employment opportunities for white collar workers. It helps eliminate risks (as when fire insurance companies demand safe practices and the availability of fire stations and hydrants), spreads risks from the individual or single company to the larger community, and provides an important source of long-term finance for both the public and private sectors.

Some 2,000 years ago in Roman times a form of life insurance was practiced by burial societies who paid out funeral costs of members funded by monthly contributions. It is thought that these were year to year arrangements but unfortunately there is not enough evidence remaining to be exact on how they operated. In Britain in the middle ages Trade Guilds provided funeral costs to members in much the same way. The earliest life insurance policy in England was recorded as being effected on the 15th June 1583. The policy was on the life of a William Gybbons (a salter in the City of London) and was taken out by a Richard Martin. The premium was set at 8 per 100 pounds of benefit insured. Even at that early date it is of interest that when the policy ended in a claim there was dispute between the insurer and the policy holder over whether the policy should pay up. Luckily for Richard Martin he won the case and the insurer lost. In those days life insurance policies where underwritten by individuals as opposed to insurance companies. It was also common practice for people to take out life policies on the rich and famous in the hope that they might benefit if that person died. We would have regarded it as a form of gabling. The first actual life insurance company was the Annuity Association founded by the Rev Dr Assheton on the 4th October 1699. Unfortunately this company only survived for 46 years before going bankrupt. Many life insurers were set up as mutual companies where ownership of the company was among the members of the life fund. The policies did not have fixed sums insured as they do today, but instead the fund would pay out what it could afford based on the number of people in the fund that died that year. Now we can be thankful that life insurance has developed since those days. Most policies offer fixed sum insured which can be up to very large amounts. There are a numerous number of insurers all vying for your business. Not only are there pure protection policies but also those which are also linked to some form of investment factor.

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi ), Yagnavalkya (Dharmasastra ) and Kautilya ( Arthasastra ). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular.

1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies.

In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign insurers including provident insurance societies. In 1938, with a view to protecting the interest of the Insurance public, the earlier legislation was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for effective control over the activities of insurers.

The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business.

An Ordinance was issued on 19th January, 1956 nationalising the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector.

The history of general insurance dates back to the Industrial Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17th century. It came to India as a legacy of British occupation. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first company to transact all classes of general insurance business. 1957 saw the formation of the General Insurance Council, a wing of the Insurance Associaton of India. The General Insurance Council framed a code of conduct for ensuring fair conduct and sound business practices.

In 1968, the Insurance Act was amended to regulate investments and set minimum solvency margins. The Tariff Advisory Committee was also set up then.

In 1972 with the passing of the General Insurance Business (Nationalisation) Act, general insurance business was nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1sst 1973.

This millennium has seen insurance come a full circle in a journey extending to nearly 200 years. The process of re-opening of the sector had begun in the early 1990s and the last decade and more has seen it been opened up substantially. In 1993, the Government set up a committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose recommendations for reforms in the insurance sector.The objective was to complement the reforms initiated in the financial sector. The committee submitted its report in 1994 wherein , among other things, it recommended that the private sector be permitted to enter the insurance industry. They stated that foreign companies be allowed to enter by floating Indian companies, preferably a joint venture with Indian partners.

Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market.

The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders interests.

In December, 2000, the subsidiaries of the General Insurance Corporation of India were restructured as independent companies and at the same time GIC was converted into a national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July, 2002.

Today there are 24 general insurance companies including the ECGC and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country.

Marine insurance dates back to the Middle Ages in Europe and is considered to be the oldest form of insurance. Generally, it is applicable to the risk associated with the movement of goods between ports.

Encyclopaedia Britannica Online observes its origination in Rhodes, having been adopted by the commercial cities of Italy and by the towns of the Hanseatic League between the 12th and 14th centuries, and reaching England by the 16th century. Lloyd's Coffee House in London was the main location for conducting this type of business. Much of marine insurance law and its governing custom were developed there by seafaring men and merchants engaged in foreign trade, who gathered to arrange their mutual contracts of insurance against the sea. The person seeking insurance would pass around a slip showing a written description of the vessel and its cargo, the name of the master and the character of his crew and the voyage considered. Those wishing to insure the venture would write their names and initials below that description with the amount that each was willing to be liable for as an insurer. When the total amount of insurance sought by the owner of the ship was thus underwritten, the contract was complete, hence the term underwriters now applied to insurers. In 1696, a newspaper was established to publish information about commercial transactions and shipping movements around the world. This initiative gave rise to Lloyd's Lists, published since 1726, and still the most important publication in the shipping and commercial world. Lloyd's eventually moved to its current location of the Royal Exchange and is still considered the greatest and most important single commercial factor in the mercantile world. Meanwhile, the first marine insurance company in the US was established in the 18th century to cover American clipper ships and their cargoes. Over time, the industry has developed into an assortment of broad property coverages, split between land risks (inland marine) and sea risks (ocean marine). Until the 20th century, marine insurance traditionally did not cover a substantial number of risks, bestowing responsibility on owners of property to look after it themselves as per car accidentinsurance policies. Now, ship owners can apply for comprehensive coverage which protects them against virtually all risks including collision and running down clauses, war-risk riders, and protection and indemnity insurance. Ship owners carry hull insurance on their own ships and protect themselves against claims by third parties in various ways. Should a ship or its cargo be damaged, the matter is settled between insurance carriers.

After the Great Fire in 1666 that devastated one third of London, reducing to ruins over 13,000 houses and 89 churches (including St. Pauls) it was realised that there was a need for the provision of compensation. At the time the only form this took was a collection at the local church. There are various views on when a fire insurance company started, from as early as 1667, but it is generally accepted that Dr. Nicholas Barbon, M.D., son of the eccentric member of Cromwells

Parliament, Praise-God Barebones, was the first to promote a serious form of insurance protection in the name of The Fire Office, later to be known as The Phenix, which commenced underwriting fire insurance in 1680 and ceased about 1712. There are no surviving examples of their fire mark. However, we do know that policies exist, and their emblem is that of a Phoenix rising from the flames. Mindful that few streets were named and the buildings were not numbered, some form of identification was necessary, and the birth of the fire mark came about. The first examples were made of lead, and some hundred years later followed by copper, tinned iron, zinc, brass and ceramic. They bore the logo of the insurance company, in many cases in the form of the countys coat of arms. Greek mythology played an important part in many designs, typically that of The Fire Offices emblem. The emblems that were attached to buildings by the insurance companys employee were called Fire Marks; to mark the building indicating that they insured it and/or the contents, for fire risks. This practice carried on for two hundred and fifty years. There were approximately two hundred insurance companies that issued over nine hundred fire marks, some only one and others as many as forty-odd different variants.