The history of insurance goes back to the first civilizations in history. Man understood that hunting, gathering, and making tools would be more effective efforts if they were done in groups. Noticing that the system worked well, they continued to collaborate in groups that consisted of a wife, children, and head of household. This ancient Babylonian tradition was also replicated in other areas of the Roman and Greek civilizations between 3000 BC and 4000 BC. These agreements were commonly used between these civilizations for many years.

During this time, civilian men lent large amounts of money for the trade of important objects, often by sea. Unfortunately, it was common for the men to be robbed at sea by pirates and the merchandise lost. When this happened, the group of maritime merchants equally divided the losses. These contracts became so popular that they became part of the Hammurabi Code. Based on neighborhood solidarity, these contracts ranged from the replacement of an entire ship to the replacement of a bird. In these agreements the wife and children, who were left without the protection of the father, were also covered.

Maritime insurance was one of the first to be established, but soon after, in the 9th century, the Guilds appeared. Guilds were institutionally incorporated groups of craftsmen who followed common rules among themselves in the case of production losses. In France and Germany professional institutions were also founded. A group of professionals would take the risk for a collective in the case of losses, and would be the one to finance them. This was a game of chance that some were willing to play.

In 1337 maritime insurance was used for the first time. Insuring the Santa Clara ship that made voyages between Genoa and Majorca, this contract established the use of the term “policy.” In 1435 the Ordinance of Maritime Insurance was enacted in Barcelona, the oldest known regulation to date.

In modern times, it was Charles I who introduced the maritime insurance system as regulation. This change would give way to the institutionalization of insurance companies with multi-personal entities and corporations. But, on September 2, 1666 insurance would forever change its course with the great fire of London, which devastated 12,300 houses and 87 churches, in addition to businesses and uncountable human losses. From this, Dr. Nicholas Barbón would be the precursor and founder of Fire Office, the first fire insurance company which was born when he abandoned his profession as a doctor to rebuild the houses and churches lost during the catastrophe. In England, another insurance enthusiast, Edward Lloyd, known worldwide and established to this day as one of the oldest insurers in the history of insurance, was also establishing himself. Lloyd’s coffee house was the meeting point for maritime merchants and moneylenders in the area. In 1698, its founder managed to obtain permission to establish “Lloyd’s News’”. This newspaper provided information on the most recent voyages and markets in the world, as well as news on cargoes shipped and losses at sea. His idea became a real insurance exchange and the first association of private insurers was created. Lloyd’s Underwriters would position itself as a monopoly of marine insurance in England until the 20th century.

In eighteenth century Spain, fire and life insurance companies were booming and quite successful. Soon, following this prosperous time, the history of insurance would take a turn again and in 1908 the Instituto Nacional de Previsión would be created, which is the origin of what we know today as Social Security.

Turning our focus away from international insurance, the birth of insurance in Ecuador started with Seguros La Union, under the command of Mr. Federico Goldbaum on April 21, 1943. After establishing themselves as the first insurance company of Ecuadorian origin, they issued their first aviation policy in 1945 which also included the Fidelity Bonds branch. In 1946 they added automobile insurance, in 1947 theft with fracture and personal accidents was included, and in 1949 they positioned themselves as the first insurance company to build a building for their operations. The following year they would give way to insurance for the death of livestock and insurance for personal accidents at work. In 1953 they established guarantee and faithful fulfillment insurance along with other insurances still in force today.

Another long-standing insurance company in Ecuador is the IESS, which began operations as the Caja de Pensiones (Pension Bank). The main objective of this insurance company, with its own assets, differentiated from State assets, was to grant civil and military public employees’ retirement benefits. In 1963, through Supreme Decree No. 517, the Pension Fund was merged with the Insurance Fund to form the National Social Security Fund with the addition of a medical department. On July 10, 1970, the Ecuadorian Institute of Social Security (IESS) was established. They were founded on the basis of these four services:

Individual and Family Health Insurance: Protects the insured and their family in the event of illness and maternity.

Pension Insurance: Protects the insured in contingencies of disability, old age, and death.

Risk Insurance: Guarantees members and employers occupational safety and health insurance through preventative actions, programs, and audits, and also helps the families of members in contingencies arising from work accidents and professional illnesses.

Manual Labor Insurance: In accordance with the Social Security Law, it permanently protects the population of the rural sector and artisanal fishermen of Ecuador in their vulnerable states of need, through health care, disability, old age, and death.

IESS is a huge pioneer in the history of Ecuadorian insurance, but in 2010 the operating mode of the IESS would change. The government declared, arbitrarily, that companies must extend insurance to a worker’s family, including partners and children under 18 years old. This increased the demand for affiliation with IESS and forced them to sign agreements with external providers to meet the demand for new members. These quick changes generated many of the problems that IESS faces today, one of which is potential bankruptcy.

At the same time, companies such as Sweaden of Quito were born, as well as Confiamed, Vida Sana, Seguros Sucre, Alianza, Aseguradora del Sur, and others, all of which are of Ecuadorian origin and are within the statue of requirements set forth by the Superintendence of Securities, Companies and Insurance. In Ecuador, these companies are legally constituted insurance options that offer products for the benefit of their affiliates.

Insurance, throughout the world and throughout history, has changed in many ways. Its evolution has allowed it to develop into a necessary benefit for all who use it. Insurance today is varied and allows one to insure everything, no matter where they are. You can live in Ecuador and have a life insurance policy in the Cayman Islands that guarantees that your retirement is safe or that in case of death your beneficiary receives your remuneration. Having insurance has never been as easy or as necessary as it is today.