History… a drachma for your thoughts?

The actuarial profession is a rather old one, but the concept of insurance goes even further back…

The idea of a pension for life is recorded as early as 582 BCE in the story of Jehoiachin, King of Judah. In the Bible (2 Kings 25, 29-30) it’s mentioned that he was released from prison in his 37th year of exile in Babylon, and “lived as a pensioner of the king for the rest of his life”.

Around 400 BCE Lysias, a Greek orator, protested vigorously when he found that his state pension was discontinued. He had been granted the pension years earlier, possibly because of war injuries. The reasons now given for its cessation were that he was able-bodied and not classed as disabled, was skilled in a trade, could mount a horse, and was well-off financially. Sounds a lot like permanent health insurance.

As far as non-life insurance goes, it started as a hedge against the loss of cargo during sea travel. In one case quoted by the ancient Greek, Demosthenes (who was born about 384 BCE), 3000 drachmas were advanced in respect of a cargo of wine. The earliest records of an official non-life insurance policy come from Sicily, where there is record of a 14th-century contract to insure a shipment of wheat. In 1350, Lenardo Cattaneo assumed “all risks from act of God, or of man, and from perils of the sea” that may occur to a shipment of wheat from Sicily to Tunis up to a maximum of 300 florins. For this he was paid a premium of 18%.

As the motto of the Institute and Faculty of Actuaries goes, e peritia ratio (reason from experience) – which means that actuaries should be one of the most reasonable breeds around!

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Pamela Hellig