Evolution of Insurance

Over 5000 years back, the Chinese traders used insurance as a preventive
measure against piracy.
The cargo of each ship were distributed among other ships, so that even if one
ship gets lost or captured by pirates, the loss will be only partial.
The first written insurance policy was on a Babylonian Obelisk monument with
the code of King Hammurabi. The Hammurabi code was one of the first forms of
written laws. This basic insurance gave the Babylonian traders protection against
loss of cargo.
In 1666, the Great fire of London destroyed more than 13 000 houses. To counter
such incidents in future, Fire Office the first insurance company was started in
1680
Traders in London used to gather at Lloyds coffee house in London and agree to
share the losses of goods due to piracy or sinking of the ship due to bad weather
History of Insurance in India
In 1818, the oriental life insurance company was established in Calcutta and
existed only till 1834
In 1829 Madras Equitable started transacting life insurance business in Madras
Presidency.
In 1870, the British enacted British Insurance Act.
The Bombay Mutual in 1871, Oriental in 1874 and Empire of India in 1897 was
started in Bombay Presidency.
There were so many Indian and Foreign life insurance companies transacting life
insurance business in India.
General Insurance business was started in India with the establishment of Triton
Insurance Company Limited in the year 1850 in Calcutta by British.
The first general insurance company which transacted all types of general
insurance business was Indian Mercantile Insurance Limited in 1907.
There were about 240 insurance companies in India transacting insurance
business in India before independence and continued their business even after
independence in 1947. There was no ethical practice followed by these
companies.
In 1956, the then finance minister Mr. Deshmuk ordered for closure of all
insurance companies overnight and the insurance business was nationalised with
the establishment of Life Insurance Corporation of India LIC on 1 st September
1956 with a corpus fund of Rs. 5 crores.

LIC of India continued its journey as a monopoly till 1999 when the Government
of India permitted private players also to enter into insurance business in India.
The foreign companies were also allowed to establish joint ventures with Indian
partners with limited equity exposure 26%