ADVERTISEMENT
See Inside September 2009

Insurance

Its probability-based view of misfortunes helped to shape the scientific outlook

The first “insurance policy” on record is probably the Codex Hammurabi, circa 1780 B.C., which you can still read in the original at the Louvre Museum in Paris if you are nimble with ancient Sumerian legalese. It avers that shippers whose goods were lost or stolen in transit would be compensated by the state. (How did shippers prove their claims? A sworn declaration before a god was good enough for the king of Babylon.)

Another 3,500 years or so passed before a catastrophe—the Great Fire of London in 1666—begat the first instance of “modern” insurance: a formal setup whereby people paid premiums to companies to bail them out in an emergency; actuaries for the companies set the premium rates based on risk of payout. Such insurance depended on advancements in higher mathematics—namely, probability theory. That development has been insurance’s lasting and profound legacy for modern life, coloring the way we think about so many things, including ourselves.

This is only a preview. Get the rest of this article now!

Select an option below:

Customer Sign In

*You must have purchased this issue or have a qualifying subscription to access this content


It has been identified that the institution you are trying to access this article from has institutional site license access to Scientific American on nature.com.
Click here to access this article in its entirety through site license access.

Share this Article:

Comments

You must sign in or register as a ScientificAmerican.com member to submit a comment.
Scientific American Dinosaurs

Get Total Access to our Digital Anthology

1,200 Articles

Order Now - Just $39! >

X

Email this Article

X