Evolution and features of insurance History of insurance: - Stone and Cox say that it existed in some of mutual or communal

protection in the Aryan tribes some 3000 years back. - Persian dictionary says that the word Bima was derived from the word Bim meaning fear and Bima means expense incurred to get rid of this fear

Definition: - Mac Gill: Insurance is a process in which uncertainties are made certain. - Rock Fell: Insurance is a source of distribution of loss of few persons into more persons. - R.S Sharma: Insurance is co-operative device to spread losss, caused by a particular risk over a number of persons who are exposed to it, who agree to insure themselves against that risk.

An insurance transaction involves the insurer, insured, premium, policy and exposure to loss. Example- In a particular colony there are 600 houses, each having a value of Rs. 30,000. Every year there is a probability of 3 houses getting burnt. The resultant loss per houseis Rs. 30,000 and total loss being Rs. 90,000. If all the 600 home owners pool Rs. 150 each, then the unfortunate people whose houses were burnt can be easily paid.

Features of insurance: 1. It is a co-operative device. 2. It helps risk sharing and risk transfer. 3. It calculates risk in advance. 4. Payment/ claim is paid on the occurrence of contingency. 5. It is neither charity nor gambling. 6. Larger number of insured persons reduces cost of insurance. 7. Claim amount depends on loss occurred. 8. Capital formation

9. Certainty 10. 11. Prevention of losses Protection.