From ancient ship loans to modern health coverage, how insurance evolved into one of the world’s most powerful financial industries

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The problem was bandits. And storms. In ancient Mesopotamia, a merchant sending cargo across the sea stood to lose everything they had in a single voyage. So, along with financial types, they cooked up a workaround: the merchants would borrow money to finance the voyage, paying exorbitant interest rates. Lenders accepted the exorbitant rates, but agreed to cancel the debt if a ship went down. At scale, the math worked, with merchants giving up some cash but staying whole, and lenders earning enough money overall to accept some losses. This system, the earliest known version of insurance, comes down to us from the Code of Hammurabi (and the term for it, “bottomry,” is still used today). 

When, in the 1680s, Edward Lloyd opened a London coffee house where merchants could scrawl their names under shipping risks — literally under-writing them — he created what would become the largest insurance market in the world. What has changed, in the centuries since Lloyd's was founded, is everything else: the specific risks, the sheer scale, and the items worth insuring, from actress’s legs to crypto wallets. We’ll cover the rest below.

12: The approximate number of distinct, overlapping systems through which Americans get health coverage — employer plans, Medicare, Medicaid, ACA marketplaces, COBRA, Medicare Advantage, Medigap, and more —........

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