The Origin of Insurance: Lessons from the High Seas

In the 1700s, cargo transport and fishing were among the most common occupations in Europe. These activities, though vital, were fraught with danger. Poor fishing equipment, limited rescue technology, and the ever-present threat of pirates made life at sea highly risky.

Many sailors and fishermen never returned home, leaving their families without support. Illness on board could be devastating, and storms often resulted in lost ships and cargo. These losses not only affected families but also posed financial risks to captains and merchants.

Faced with these challenges, sailors began a simple but revolutionary idea: they pooled a small portion of their earnings into a fund. This “widow’s fund” provided financial assistance to the families of those who did not return. The idea spread quickly.

Captains, inspired by this concept, started similar funds to cover lost cargo. These early forms of self-insurance helped mitigate the risks of life at sea and supported entire communities.

Today, what started as a simple system of mutual support has grown into a global insurance industry, safeguarding lives, businesses, and economies.