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Very Brief history of Life Insurance

We all have heard about life insurance. Annuities, death benefits, premiums, term, universal, whole, lapses, surrender, you get the idea. But have you ever wondered how exactly life insurance got started? Well, we did, so today we bring you a (very) brief history of life insurance.

100 BC — Roman Burial Clubs

Our journey begins back in ancient Rome. Then, Romans believed anyone who was improperly buried became a spirit with an evil temper (yikes!). The problem was, much like today, funerals were expensive. So, a military leader by the name of Caius Marius formed burial clubs where members would help cover funeral expenses should another member die. This practice has been noted as one of the earliest forms of life insurance in human history!

1583 AD — Richard Martin purchases first recorded insurance policy

Jumping ahead 1,400 years, we arrive at our first-ever recorded insurance policy. A man named Richard Martin purchased a policy on his friend, William Gibbons. This one-year term policy was purchased by Martin for 30 pounds. In exchange, he received a death benefit of 400 pounds after Gibbons died within that year.

1620 AD — Captain John Graunt creates the first mortality tables

Not 40 years later, we have our first mortality tables calculated by Graunt who used the average lifespans from church records as his basis for this early actuarial work.

1688 AD — Edward Lloyd’s Coffee House

In case you might have wondered what coffee has to do with early life insurance, Edward Lloyd’s Coffee House in London is where the modern concept of an insurance company is born. It began as a center for people to share maritime insurance information. This coffee house later became Lloyds of London. So the next time you visit a coffee shop, you might remember this beloved drink was a part of insurance history!

1706 — The Amicable Society for Perpetual Assurance

William Talbot and Sir Thomas Allen establish the Amicable Society for Perpetual Assurance which becomes the first company to offer life insurance. Members between the ages of 12 and 55 would pay a fix annual payment per share (1 to 3 shares). Wives and children of members would receive the dividends after the members passed away.

1752 — Edward Rowe Mores and the first mutual insurers

Edward Rowe Mores establishes the world’s first mutual insurers and pioneered premiums based on a mortality rate laying down the framework for scientific insurance practice and development.

1759 — Presbyterian Ministers Fund for Life Insurance

The Presbyterian Ministers Fund becomes the first life insurance company in the United States. The PMF provided support to Presbyterian women whose husbands had died.

1868 — The Ancient Order of United Workmen

A man named Jordan Upchurch, railroad master mechanic, organizes the United States’ first fraternal benefit society. Called the Ancient Order of United Workmen, the fraternity provided members with life insurance protection for their dependents (at the time, life insurance was considered a “luxury” investment).

1916 — LIMRA is founded

LIMRA is formed as the Association of Life Agency Officers (ALAO)—later known as the Life Insurance Management Research Association (LIMRA)—providing industry-leading research for retirement, insurance, and distribution.

1924 — LOMA is founded

The Life Office Management Association (LOMA, that’s us!) is formed to share information, find solutions, and share best practices for running life insurance home offices.

1976 — Insurance in the mid-’70s

By now, 72% of all US adults and 90% of husband-wife families own life insurance.

2001 — Post 9/11

After the terrorist attacks on New York, Pennsylvania, and Washington DC, more than $1.2 billion in life insurance claims are paid.

2019 — LIMRA and LOMA predictions for the future

The latest LIMRA research predicts a positive sales outlook for life insurance. The rise in information technology and integrating artificial intelligence into underwriting will reshape the life insurance industry. Also, customer expectations for the life insurance industry will change, desiring a business with life insurance companies to be conducted easily.

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