About 5,000 years ago, a group of Chinese traders were trying to get their products to market. That meant navigating their small wooden boats down dangerous river rapids that were treacherous enough to capsize their ships and destroy their cargo.

Losing a literal boatload of goods would have been life alerting. A merchant might immediately become destitute or starve if he or she suddenly had no source of income. Suffice it to say that if the Discovery Channel were around back then, there would’ve been a reality TV show about it.

In the face of such terrifying risk, the traders came up with a solution. Instead of each person carrying all his goods on his own ship and risking complete loss, the traders would work together, spreading out their merchandise across several different ships. That meant if someone capsized, a number of people would lose a little bit of money, but no one would lose it all.

That’s maybe the earliest recorded instance of risk transfer, the essential idea behind modern day insurance. By working together and pooling resources, the impact of a loss is spread out. Everyone gives up a little something to eliminate the chance of any one person losing everything.

It’s a pretty remarkable idea. For those who think that people are generally selfish and bad at planning ahead, the concept of risk transfer and insurance is kind of a modern marvel. It provides a collaborative way to deal with an inherently unpredictable world.

What we’re trying to say here is, insurance is heartwarming. 😊

Today, insurance makes a big difference in the world around us.