The first kind of basic insurance policy can be traced back to Babylonian times.  There had been a huge increase in trade, and theft and loss of goods was becoming a big problem.  Around 2100 B.C. the Code of Hammurabi guaranteed that traders transporting goods by caravan would be reimbursed if the goods didn’t arrive safely.

A thousand years later Greek shipping merchants devised a similar scheme, where they paid into a common fund which would pay out for any goods lost at sea.  The Greeks and Romans also introduced the idea of burial insurance by organizing ‘benevolent societies’ which would pay families when somebody died.  This was the forerunner of today’s life insurance.

Medieval times saw the re-emergence of burial insurance, and another type of insurance. During plagues, or times of great sickness, guilds (similar to benevolent societies) would cover living expenses for their members and their members’ families if anyone fell ill, the first example of health insurance.

The first actual insurance policy was signed in Genoa in 1347.  In these contracts, the document consisted of an insurance proposal under which people wrote their names and the amount of risk they were prepared to accept.  This is where the term ‘underwriter’ comes from.

By the mid 17th century, the practice of insuring a ship’s cargo was widespread throughout Europe.  In London merchants, ship owners, brokers and underwriters began meeting in a coffee house called Lloyds, and from this the first insurance market developed.

In 1666 the Great Fire of London destroyed over 13,000 houses and in the aftermath the first fire insurance company was set up.  The company employed its own firefighters, who would only put out fires in houses insured by them.  Rival companies soon appeared, each with their own fire brigade, and competition for business was fierce.

In America, during the first years of colonisation, there was also a demand for insurance, as farmers wanted to insure their crops against bad weather.  When there was a spate of large-scale bank robberies in the mid-West, people wanted to insure their bank deposits.  City-wide fires in the 1700s in Philadelphia and New York saw even insurance companies taking out insurance against having to make big payouts in the event of disasters such as big fires or earthquakes.

This diversity in types of insurance was the birth of the modern insurance industry, and nowadays you can insure just about anything.