Insurance History
One of the main pillars of insurance is that it is a system built on the principle of risk-sharing. One of the earliest examples was when Chinese merchants would divide their cargoes amongst one another’s boats. That way, should a boat sink everyone lost something and no-one lost everything. The first real insurance contracts started with Greek bottomry and marine insurance.
In South Africa two British offices were established in 1826 in the Cape. Five years later the first local company called South African Life was formed. Old Mutual was founded in 1845 and is the only one established in those early days still operating today. Insurance, both long term and short term, is seen as being in the interest of society as a whole and therefore it is heavily regulated.
Worldwide many insurance companies have been nationalized to enable governments to have the ultimate control. In South Africa insurance companies are also heavily regulated but they still operate as private, profit-seeking businesses. The short-term insurance act, no 53 of 1998 regulated the registration of short-term insurance companies and their activities. The Financial Advisory and Intermediary Services Act, no 37 of 2002, bought about further controls over insurers and provide protection to the general public in their dealings regarding car and other short term insurance matters.