Insurance services in antiquity

25247226 - old ship lost in the middle of a raining storm on oceanThe world has changed quite a bit since insurance services were first conceived. Yet, the model on which the insurance industry is based upon has remained static. It is all a matter of risk protection. Without proper risk protection, skyscrapers wouldn’t get built, products wouldn’t be marketed, and goods wouldn’t be shipped. Protecting a business’ vital assets from the risks associated with the real world represents the foundation upon which insurance services rest upon.

In today’s day and age, insurers and reinsurers are at the vanguard of risk management and play the vital role of shock absorbers in our interconnected age. Yet, the insurance industry does so much more than just help mitigate risk. Insurance premiums are invested on a long-term basis and are packaged into different financial assets. Insurance services like premium financing and other tools allow insurers to provide capital within the real economy. These are the men, women, and businesses whose work supports the production and distribution of goods and services throughout our world.

Insurance services then and now

Insurance and reinsurance services have been around for a long time, but not as long as people think. In fact, individuals providing financial services designed to accommodate risk mitigation can only be traced back to the late 19th Century.

In antiquity, risk was often viewed through the lens of fate. Rather than meeting disaster with defiance, many times one simply resigned themselves to their fate. For this reason, protecting one’s life and assets against misfortune was considered a vital tool to lessen the negative effects of “divine providence.”

Yet, for centuries, rather than protecting one’s assets using insurance services, people often resorted to prayers, pilgrimages, and donations to their deity of choice. If you go back to even the early 1800s, insuring people against death was often a controversial topic.

Viewing insurance services through the lens of ancient societies

Even though insurance by itself may have been a foreign concept to societies of old, there were still ways in which people managed to alleviate losses, mainly through sharing risks within social and business communities.

In ancient times, meeting places such as guilds, trade associations, and inter-village communities provided the foundation by which risk was mitigated. If your city or village was a seafaring one, you may have distributed cargo among different ships to protect valuable assets against major storms or other disasters.

Still, spreading the risk around in this fashion was not without challenges. Ship owners traveling the same routes might see losses multiplied, no matter how the cargo was spread around.

Another major drawback to risk mitigation of ancient times was the lack of financial sophistication within individual transactions. Early forms of insurance financed operating costs out of their members’ contributions. These societies simply didn’t have any advanced ways of investing capital wisely.

Why modern insurance services mix the old and the new

With today’s complex, globally interconnected society, modern life can hardly be imagined without insurance as a form of risk protection. Without insurance services, industrialization, innovation, and economic development would not have progressed in the fashion it has.

The insurance industry has proven extremely resilient to both the challenges of yesteryear and the challenges of today. Insurers have demonstrated a long history of prudent risk awareness and cautious innovation.

Ensuring the prosperity of our clients has always been paramount to COST Financial Services. Our goal is to help insurers grow their balance sheet by offering additional services. As the industry has evolved, insurers have new tools at their disposal designed to help maximize profit while offering a bevy of products their clients rely on. To learn more about how we can help light the way, contact us today.