History and Development of Insurance

Insurance affects us all and it is a vital part of the economy compensating for the extremes of catastrophic events to the general risks we all face in our community  such as Accidents, Fire and human related events such as Crime . Every aspect of life can benefit from insurance, whether related to business activity or the daily lives of individuals.

As long ago as two thousand years BC, Chinese and Babylonian traders practised early methods of transferring or distributing risk. Chinese merchants negotiating treacherous rapids on the Yangtze River redistributed their wares across many vessels to limit the potential loss due to the capsizing of a single vessel.

The Babylonians developed a system that was practised by early Mediterranean sailing merchants. If merchants took out a loan to fund a shipment, they paid an additional sum in exchange for the lender’s guarantee to cancel the loan should the shipment be stolen.

Achaemenian monarchs were the first to insure their people – and made it official by registering the insuring process in governmental notary offices each year at the start of the Iranian New Year.

The inhabitants of Rhodes invented the concept of the “general average”. Merchants whose goods were being shipped together paid a proportion of the premium, which was used for reimbursing a merchant whose goods were destroyed in a storm or a sinking.

Insurance contracts were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates.

Insurance became far more sophisticated in post-Renaissance Europe, and specialised varieties developed.

London’s growing importance as a centre for trade boosted demand for marine insurance. Lloyd's coffee house became recognised as the place for obtaining marine insurance. From its first beginnings in Edward Lloyd’s Coffee House in 1688, Lloyd’s has been a pioneer in insurance. Starting with its roots in marine insurance, Lloyds has grown over 300 years to become the world’s leading market for specialist insurance.

From 17th century shipping and Lord Nelson’s victory at the Battle of Trafalgar, through the devastation of the San Francisco earthquake in 1906, and on to the emergence of space satellite technology in the late 20th century, the story of Lloyds is both a long and an interesting one

Insurance as we know it today can be traced to the Great Fire of London, which destroyed 13,200 houses in 1666. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. In 1680, he established England’s first fire insurance company, The Fire Office, to cover brick and frame dwellings.

In fact it was these same companies that supplied the first Fire Brigades and an Insured building was stamped with a “Fire Mark” which distinguished which Fire Brigade would attend. Now the Fire Brigades have merged  together and are run by Government Authorities and in some states are still funded by Insurers through the application of a Fire Service Levy. The “Fire Marks” are now highly sought after collector’s items.

So from Fire and Marine Insurance, gradually new insurance products have emerged either through necessity or public interest. Motor Vehicle Insurance with the invention of the automobile. Burglary Insurance due to Crime. Business Interruption Insurance due to the consequential loss of income following a Fire. Liability products have developed from certain court decisions and in more recent times, government legislation.

 Insurance is always changing and developing. The emergence of Intermediaries between the client and the insurer to assist in explaining and advising how to protect yourself against risks that we all face remains in demand. This is where CPR Insurance Services fits in. We can advise you and keep you up to date with these changes. We will save you the time needed to decify these differences. We can save you money by accessing all the Insurance market to obtain the best cover at the best price.  CPR – Experts who will save you.

The Value of Insurance to Society

Latest News

Illegal or unsuitable cladding now a big issue

Why we have laws, regulations and Australian standards? Because some people just do the wrong thing all for the sake of making money. The cladding issue is the subject of 4 Corners program on the ABC.

We are already seeing Insurance policies now placing exclusion endorsements into their policies excluding and claims relating to illegal cladding. We are seeing Governments demanding Audits of all existing buildings above a certain height. There are accusations of Builders taking other short cuts such as on Wiring, Pipes and sprinkler systems. 

The question is, who is to blame? Who will take responsibility?

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Small business in NSW

Right after the NSW Government have reimposed Fire Service Levies, they have at least made an effort for small business. The government has announced it will abolish stamp duty on a number of policies taken out by a small business. This is an important change.

What is a small business? In order to gain the exemptions, the business must be a small business for Capital Gains Tax Purposes for the income year in which the insurance is effected or renewed. A small business for CGT purposes is: “an individual, partnership, company or trust that is carrying on a business, and has an aggregated turnover of less than $2 million.”

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