INSURANCE and NATIONAL DEVELOPMENT
an overview towards attainment of Kenya vision 2030
A paper by GEOFFREY ODERO for the
Economic Students Association’s ECONOMIC FORUM
Moi university, February-2011
Protecting against the risks associated with everyday life is essential to everyone’s well-being and peace of mind. Insurance is a way of allowing people to minimize their individual financial damages by combining their potential loss with that of others.
Although many types of insurance seem complicated, the basic principles are straightforward. Insurance companies assess the risk of any eventuality and the potential downside associated with it. Then, based on past experience and their own expertise, insurance companies calculate the premium that a customer pays to provide cover against injury or loss. When the insured event happens, the company pays out the agreed level of compensation.
History of Insurance concept and practice
The concept of insurance is arguably as old as civilization. People came to learn that things would not always be the same, more so economic conditions. In a season, the rains could favour agriculture. In another the same rains could come in excess, floods which not only washed away crops but also people (labour) and equipment.
Hence the invention, extensive construction and use of granaries, I believe was one of the first rudimentary forms of insurance, for it safeguarded the society from food insecurity in seasons the crops did not yield enough supply.
Another example is the communal living/communal responsibilities. This was popular in many societies. The implications were that, suppose one did not have food, he could rely on his/her neighbours for supplies till he/she reinstated his own food reserves.
Finally, in the event someone in the community lost a house through an event of fire or other phenomenon, he /she would be assisted by the community to build a new...