Asuransi – The history of insurance

Global Courant

Asuransi is an Indonesian word for insurance. Insurance is defined as the fair transfer of risk of a loss, from one entity to another, in exchange for payment. The main concept of insurance – that of risk spreading – has been around for as long as humanity has existed.

The first methods of transferring or sharing risk were practiced by Chinese and Babylonian traders as early as 3000 to 2000 BC, which is about 5000 years ago. Chinese merchants used to travel with lots of valuables, they traveled by land and water. As they traveled around the island, they divided their goods between several ships to limit the loss caused by a single ship capsizing. While the Babylonians developed a system that was recorded around 1750 BC in the famous Code of Hammurabi. It was practiced by early Mediterranean sailing merchants. A merchant who wanted to ship his transactions would get a loan to finance his shipment. If the shipment arrived in good condition, the merchant must repay the loan to the lender with an additional amount in exchange for the lender’s guarantee to cancel the loan if the shipment is stolen.

Insurance was first established in England at the end of the 17th century. But before that time, “friendly societies” existed in England. Each member donated funds to a general fund that could be used for emergencies. Towards the end of the 17th century, London’s growing importance as a trading center increased the demand for maritime insurance. While in the United States, in 1752, the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire became the first mutual fire insurance company in America.

Insurance in Indonesia started in the Dutch colonial period, associated with the success of the country’s companies in the plantation sector and trade in Indonesia. To ensure survival, insurance is absolutely necessary. During the Second World War, insurance activities in Indonesia practically came to a standstill, mainly due to the closure of the insurance companies owned by the Dutch and the British.

After the end of the Second World War, the British company and the Dutch company resumed their activities in Indonesia after independence. Until 1964, the insurance market in Indonesia was still dominated by foreign companies, especially the Dutch and English ones.

About 10 years later, in 1975, Avrist’s predecessor began when Mr. Harry Diah officially established PT Asuransi Jiwa Ikrar Abadi (AJIA) in November 1975. AJIA’s headquarters is located in one of the properties in Jalan Saharjo, Jakarta. AJIA opened the Group Management Division, which offered a variety of products and group insurance and pension funds. In 1984, AJIA entered into a joint venture with American International Assurance. Co., Ltd. (AIA) and became the first multinational joint venture life insurance company in Indonesia. In 2009, AIA Indonesia renamed PT Avrist Assurance and became an independent company, with the support of over one million loyal customers, an extensive network of distribution channels and a reputation as one of the leaders in the Indonesian insurance market.

Asuransi – The history of insurance

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