The history of insurance: from community to corporation and back again.

Written by: Kayleigh Petrie / Published by: Nexus Mutual

Humans have always been wary of risk. Since we began hunting in tribes to reduce the chance of getting mauled, to now where we can use Nexus Mutual to buy smart contract cover using Ethereum.

We might be doing something totally new here at Nexus Mutual, but we’re building on the foundation of the centuries old system of insurance. In building a brand new style of organisation, we’re trying to combine the best of the tried-and-tested system with the new technology that enables us to scale up and welcome members from across the globe.

The history of insurance is a story punctuated by important events which opened our eyes to the benefits of sharing risk among many people, supported by those who can handle it.

1750BC Babylonian Code of Hammurabi documents early insurance policies for sailing merchants.

600BC Greek and Roman benevolent societies form life and health insurance among their people.

1100s Guild system emerges among skilled craftsmen with insurance in case of fire, theft, disability and death.

1654 Blaise Pascal formulates method of expressing probability, and therefore calculating risk. Resulting in more affordable insurance than before.

1600s Voyages to the New World secure multiple investors to spread risk Those interested in taking on risk would sign their name under the figure indicating the share of the cargo for which they were taking responsibility (hence, underwriter).

1666 Great Fire of London — around 13,000 homes destroyed, inspiring underwriters who usually dealt with marine insurance to branch out to fire insurance.

1686 Lloyd’s Coffee House opened, now Lloyd’s of London.

1750s First insurance in America.

1820s Mutual societies emerge.

1965 Industrial and Provident Societies Act, a new class of mutual, is formed.

2019 Nexus Mutual launches smart contract cover.

It’s clear that the origins of insurance lie in the foundations of community living; protecting groups against risks that they all share. Historical insurance events have been solved with a community effort, which have evolved to become the industry standard.

This is why Nexus Mutual operates as a mutual; for the benefit of all members who jointly own the mutual — it is natively community based. With the technology available to us, we want risk protection to remain a community based solution, not a centralised corporate one.

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