The idea of insurance is as old as civilization itself. In any community, the practice was to help a family visited by adversity (e.g. fire, death of a breadwinner) by way of cash or in kind, with the purpose of alleviating or helping compensate the loss. Such assistance ("passing the hat") is essentially the concept of insurance. 1
- The Code of Hammurabi
The earliest reference to a "law" in insurance can be found in the Code of Hammurabi, that of Mesopotamia about 4,000 years ago, to wit:
"If the brigand has not been caught, the man who has been despoiled shall recount before God what he has lost, and the city and governor in whose land and district the brigandage took place shall render back to him whatever of his was lost;" or,
"If it was a life, the city and governor shall pay one mina of silver to his people." 2
This ancient document only tends to show that mankind has long been devising means to free itself from fears and anxieties, and thereby achieve some measure of security.
- European Bottomry Bond and Respondentia
In it's modern sense, the earliest reference to insurance can be traced to Italy's bottomry bond (a loan on the security of a ship), and respondentia bond (a loan on the security of the goods). If a merchant wanted to purchase goods from a foreign country, he would finance the trip with borrowed funds using the ship as collateral. The contract specified that if the vessel failed to return safely, the borrower would not be in any obligation to pay the loan. This agreement was known as bottomry contract or bond. If the cargo was pledged as collateral, the agreement was called respondentia bond. Many writers have agreed that those were the forerunners to modern marine insurance policies. 3
- Lloyds of London 4
One cannot talk of modern-day insurance without mentioning Lloyd's, which has become the undisputed insurance center in the world. The history of Lloyd's goes back about three centuries to a coffee house in the City of London where shipping and trading intelligentsia of the time met and exchanged information, capital and risks. By natural evolution, it developed into a kind of club, which in the course of time became a market for the insurance of ships and cargoes.Lloyd's is not an insurance company that accepts risks and issues policies. Rather, it is an association of individuals ("members") which accepts insurance for their own account. The two classes of members at Lloyd's are the underwriters ("names") and the brokers.
- Insurance in the Philippines In its present form, insurance was first introduced in the Philippines in March 1829, when Lloyd's of London appointed Stracham, Murray & Co., Inc., as its local representative. Around ten years later, Russel and Sturgis was appointed by the Union Insurance Society of Canton to act as their insurance agents in Manila. Business was limited to non-life insurance. It was only in 1898 that life insurance was introduced in the Philippines, when Sun Life Assurance of Canada began doing business.
The first domestic non-life insurance company was the Yek Tong Lin Fire & Marine Insurance Company (now Philippine First Insurance Company) established in June 8, 1906. In 1910, the first domestic life insurance company, the Insular Life Assurance Company, Ltd., was organized.
To date, the insurance business in the Philippines has made great strides, and credit could be given to the various organizations that have dedicated time, effort, and resources, to uplift the standards of the insurance industry. These associations include the Insurance and Surety Association of the Philippines (ISAP), the Philippine Life Insurance Association (PLIA), the Philippine Insurance Rating Association (PIRA), and the Insurance Institute for Asia and the Pacific, among many others.
References:
- Jordan, Delfin. Introduction to Basic Non-Life Insurance. Basic Non-Life Insurance Course. Insurance Institute for Asia and the Pacific, page 1.
- Brusk, Edward, Donald T. Clark, and Ralph W. Bidy editors. The World Business. New York: Simon Schuster, 1962, Vol. II, page 959.
- Jordan, Delfin, op cit, page 2.
- Ibid, page 10.
