Did you know that the concept of insurance actually goes back to the early human civilization? In fact, certain practices in Persia and Babylonia actually come close to the idea or notion of insurance today!
Wherever economy ran using non-monetary or natural sources, insurance was in the form of agreements for mutual aid. For instance, if your house got destroyed and you had an agreement for mutual aid with your neighbour then he too would help you build it back up. Granaries were actually the perfect example of early insurance. It provided protection against famines.
However, the true method of reducing risk or transferring risk within a monetary economy was first seen with Babylonian and Chinese traders during the latter part of the BC millennia. Since traders had to cross treacherous paths, they would distribute all their ware over many vessels thus limiting the chances of losing all their possessions if one of the vessels would capsize.
Then the Babylonians found a method that is actually recorded in the Code of Hammurabi. If a merchant took a loan for his shipment, he would give the lender some extra amount to ensure the lender cancelled the loan if the shipment was lost at sea or stolen.
Another example is that of the Achaemenian monarchs who were given annual gifts from many ethnic groups that were under their control. This was a form of political insurance protecting these groups from harm. Then in the 1st century BC, Rhodes inhabitants created what they called the “General Average”. Under this system, groups of merchants actually paid a particular sum to insure goods being shipped together. The total premium collected together would then be used to help reimburse losses to any merchant whose goods were damaged or stolen during transport.
Likewise, the Athenians gave out maritime loans that were basically advance money for a voyage. This ensured that if a ship was lost or goods damaged then the repayment was cancelled. The rates for such loans differed depending on the time of the year and the danger associated with it.