History of Insurance Companies :
To talk about the insurance companies, insurance in modern form had occurred after the Great Fire in London in 1666 which destroyed myriad houses. Nicholas Barbon, following the disaster, had established England's first fire insurance company (The Fire Office) in1680. In the United States, the first insurance company which provided fire insurance was formed in in South Carolina, in 1732.The practice of perpetual insurance against fire was popularized by Benjamin Franklin. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses . In India, the Oriental Life Insurance Company was started in 1818 by Europeans, much before independence.the first indigenous insurance company in India was started in the year 1870 in the form of Bombay Mutual Life Assurance Society.
Types of Insurance Companies :
Insurance companies are mainly classified into:
- Life insurance companies (those which deal with life insurance, annuities and pensions products)
- Non-life or general insurance companies
The first category of insurance companies handles a long-term business, covering risks of a person's life or his/her pension over a long period of time. Examples of such insurance companies are: American National Insurance Company in the USA, the Life Insurance Corporation in India, etc.
As against that, non-life insurance companies usually cover a shorter period, like for example, American Medical Security Life Insurance Company in USA, Bajaj Allianz General Insurance of India, etc.
In most of the countries, life and non-life insurers are subject to different regulations.
Besides, there are other kinds of insurance companies:
- Mutual insurance companies are those insurance companies which are owned by the policyholders
- Stock insurance companies are owned by stockholders
- Reinsurance companies are those insurance companies that sell policies to other insurance companies to reduce risks and protect themselves from gigantic losses
- Captive Insurance companies are limited purpose insurance companies established for financing risks arising from their parent group(s). [The types of risk include property damage, public and products liability, professional indemnity, etc.]
- Insurance consultant companies are paid by the customer to find out the best insurance policy amongst various companies
- Third party administrator companies perform underwriting and even sometimes claims handling services for insurance companies
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