Modern insurance began in London and exploded globally from Edward Lloyd’s coffee house in 1688. It’s now known as Lloyd’s of London. Ship owners would meet at Lloyd’s and discuss their voyages. They realized the value of their cargo was great enough that it would be catastrophic to lose a ship at sea.
Someone came up with the idea for the ship owners to share the risk. That way, they would subsidize each others’ losses. A ship owner would write his ship’s name and voyage and cargo on a slip of paper and post it in the coffee house. Other ship owners willing to share the risk would write their names under the ship’s name. That’s where the term underwriting came from.
So from those modest beginnings, we now have a global insurance industry in which risk is shared among all the participants. For more on the state of modern insurance and Performance Based Insurance solutions, contact us.