The concept of property insurance originated in the days of the Babylonians around 1750 B.C. when merchants developed a system to protect themselves from financial loss if their shipments were lost or stolen.
The early property insurance system, recorded in the Code of Hammurabi, provided for merchants to pay a premium to their financial backers in return for a guarantee that their debts would be cancelled in case of unexpected loss of their cargo. Here’s that concept of “risk management” again — the merchants were paying a premium to transfer their risk of loss to their lenders.
Around 600 A.D., the Greeks and Romans developed their own versions of health and life insurance by forming groups that cared for the families and funeral expenses of members upon death.
