BU483 Lecture Notes - Lecture 1: Reinsurance, Natural Disaster, Manulife
Document Summary
In 1583, richard martin, a wealthy aristocrat, had not considered the possibility that his top lieutenant, william gybbons were to die. Tried to calculate the value lost to his business if he were to die. Martin made a wager with country club members, paying 8% of the estimated 383 it would cost him if gybbons died within 12 months. If he died within that time, martin would get the 383. Gybonns died shortly before the end of 12 months. Went to court over the definition of what a month was (lunar v normal). This was essentially the first life insurance contract. Petition brought forward to british parliament in 1757 for royal approval of life insurance for ship workers, soldiers, etc. Resubmitted in 1762 and passed in parliament. First company was called the old equitable. To provide financial protection for family if the breadwinner were to die. This is still the primary reason for life insurance purchases today.
