INSURED 4 REVER

Insurance in Eastern European Countries Until the end of the 19 80s, insurance in state-planned economies was part of the state administration. In fonner USSR, social insurance was guaranteed on the seventh day of the Great October Revolution in 1917 to every citizen to the account of the State. All workers, employees and members of collective farms were subject to compulsory social and state economic benefits. In 1918 the private insurance companies were nationalized and all kinds and branches of domestic insurance became a state monopoly known as Gosstrakh. Business as a rule was divided into the insurance of domestic risks in local currency and the insurance of risks in foreign currency, including reinsurance carried out by the insurance company of the USSR known as Ingosstrakh. The two markets were strictly segregated and were operated by separate state companies. Risks in foreign currencies, mainly marine and aviation, were reinsured in the interna...

The Markets for Insurance The service provided by insurance is not an homogeneous product. Various types of insurance exist and they are not interchangeable. Therefore, it is not strictly possible to speak of one insurance market, but rather of several markets. A distinction is usually made between life insurance and non-life insurance, but here again the product varies according to insurance cover and from one country to another. Because the motivation for buying insurance may differ from one case to another, Karl Borch (1981) found it convenient to divide the field of insurance into three classes of insurance: (1) Life insurance, i.e., annuities and ordinary life insurance; (2) Business insurance, i.e., the insurance bought by businessmen and covering risks of all kinds; (3) Household insurance, i.e., insurance bought by ordinary consumers. The relative importance of the three classes of insurance may differ from one country to another. Each class...

Insurance and Economic Theory The second half of this century witnessed the growth to maturity  of the insurance sector in most of the industrialized countries. The annual increase in premiums collected is significantly higher than the depreciation of money and far greater than the increase in Gross Domestic Product. The ratio of total premiums written to the Gross Domestic Product of a country is the measure most commonly used to evaluate the importance of insurance to the economy. Although it does not give a complete picture of insurance output because of the considerable variation in premium rates between different countries, this measure has the advantage of being uninfluenced by currency factors. In most countries the primary source of statistics is the reports of the governmental supervisory authority. The following statistics are taken from the monthly economic studies ~ published by the Swiss Reinsurance Company. This review has become the...

The First Half of the Twentieth Century It is mainly during this last century that insurance became an institutionalized activity. The evolution of insurance business has brought it from a mere set of conventions between individuals to a major national concern in all the countries. One of the most important aspect of the first half of this century has been in all countries the increasing involvement of governments. Not only governments introduced intensive regulation but also became insurers when the protection of the public interest became a matter of social concern. Government intervention as a regulator In the United States of America, the first two decades of the century opened with a series of major events in the era of insurance regulation. The major reform of the life insurance industry began as an intra-company dispute involving Equitable Life. The Armstrong Investigation Committee conducted in New York found insurance company abuses in all face...

The History of Modern Life Insurance 1583 England: first life insurance contract issued to cover the life of Mr. Williams Gybbons for one year against  a premium of 32 Sterling Pounds. He died the same year and although the company tried to forfeit the contract, his dependants received a lump sum of 400 Sterling Pounds. 1689 France: Lorenzo Tonti, a Napolitan banker, proposed an annuity scheme to Cardinal Mazarin, the Prime Minister of Louis XIV. Under a Tontine, the Government paid interest on money raised and the total amount accumulated were divided among the surviving members of the group at a predetermined date. The Tontines brought an element of gambling into the purchase of life annuities. 1698 England: establishment of the Mercer's Guild of Cheapside which began granting annuities to the beneficiaries named by the insureds. 1699 England: establishment ofthe first mutual company by Mr. Standfield known as The Society of Assurance for Wido...

The Development of the Life Insurance Business In the early years the development of the life insurance  business in Europe was very slow. Although life insurance policies were written in England in the late 16th century, the scientific basis was not ~vailable. The first mutual life insurance company, the Society of Assurance for Widows and Orphans, founded in 1699, did not had much success. In 1706, the Amicable Society for a Perpetual Assurance Office started business and had the monopoly in the world until the establishment in 1721 of the London Insurance Corporation and the Royal Exchange Assurance Corporation. These companies limited at 45 the age of their members and the annual premium was the same for all members independently of their age and health. It is the need to insure people over 45 that probably generated research in mortality rates. 23 The Equitable Society was established in 1756 and was the first company to write whole life insu...

The American Insurance Market History The formation of a domestic market was restricted as a result of the dominance of the English underwriters despite the fact that Americans encouraged the patriotic behavior of businessmen to buy their coverage in the local market. Fire insurance evolved at an early date because of the exposure of the small, wood-constructed towns with lack of fire prevention facilities. Disastrous fires in Boston in 1630, in Philadelphia in 1730, created an awareness of the need for some kind of protection. Fire insurance was still in its infancy when it was transplanted to America. The first company was organized in Charleston, South-Carolina in 1735 as a friendly society but failed after the disastrous Charleston fire in 1741. In 1752 Benjamin Franklin organized and promoted the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. It was modeled on the Amicable Contributionship, known as the Hand-in-Hand Of...