Since ancient times the concept of transfer of risk and spreading of risk has been in practice. An example of one of the earliest form of insurance was written as a law in the Code of Hammurabi. One of the law under the code basically says that if someone who took out a loan to grow grain and was unable to harvest the grain due to drought, storm or some other event that year, the debt will not have to be repaid that year. The Code of Hammurabi was carved into a stone during ancient Babylon (1750bc).

Of particular interest is the way the guild system works in the medieval times. Guilds are formed by groups of similarly skilled craftsmen. Among many other priviledges of being part of guild, the guild may also provide protection against misfortunes.

Fast forward a few centuries we will find that one of the earliest record of insurance contract was of a marine insurance contract written in Genoa in the early 14th century.

Today, insurance are mainly provided by commercial insurance companies. The first insurance company was established after the Great Fire of London which triggered a series laws that was passed. One particular law was to allow for an organisation to be incorporated in order to indemnify the losses resulting from fire. The first such company was established by Nicholas Barbon in 1667.