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Insurance and risk practices: an exploration of religious texts to reveal the evolutionary development of insurance institutions

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Abstract

Archeological evidence shows that many ancient civilizations were engaged in practices resembling insurance to protect individuals from adverse economic loss. The present study argues that such protection mechanisms are indeed very old and have their roots in various religions, but rather than an economic orientation, they were governed by religious faith for collective survival. The concepts of protection, pooling, and temporal diversification of resources are discussed intensively in all religions. By exploring various religious texts, the present study identified four quasi-insurance arrangements, namely religious insurance, political insurance, mutual insurance, and institutional insurance. However, these protection arrangements vary in the degree to which they represent “strict adherence to faith” versus “laws of collective survival.” The argument of the present work is supported using the theory of religious evolution developed by Bellah in 1964.

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Notes

  1. See Clark and Lelkes (2005) and Scheve and Stasavage (2006).

  2. Trenerry (1926).

  3. E.g. Anderson (1988) and Scheve and Stasavage (2006).

  4. Takaful in Islam.

  5. Fire.

  6. Air.

  7. Source: Chapter V.3.37 in The Panchatantra (third century BC).

  8. Source: The Bhagwat Gita, Chapter 9, Shloka 22.

  9. Source: Chapter 10, Text 27 of Bhagwat Gita as It Is.

  10. Political insurance is the assurance of safety against any economic uncertainty by a king/ruler. Here, the key development was that the amount of loss due to a risk could be manipulated by human beings, who at the same time can also develop laws.

  11. Vyasa (2018).

  12. A religion that originated in Azerbaijan near Iran around 5000 years ago.

  13. Source: The Avesta, translated by Kanga (2013, p. 1).

  14. Source: The Avesta, translated by Kanga (2013, p. 4).

  15. Evil.

  16. Source: The Avesta, translated by Kanga (2013, p. 329).

  17. Source: The Avesta, translated by Kanga (2013, p. 329).

  18. Source: The Avesta, translated by Kanga (2013, pp. 28, 30).

  19. Religious insurance is assurance of safety against any uncertainty for the believers/followers of a particular religion.

  20. See Walvoord and Zuck (1983, p. 202).

  21. See Walvoord and Zuck (1985, p. 303).

  22. Bullinger (1999, p. 872).

  23. See Carus (2004).

  24. Especially prevalent in Japan.

  25. See Barlian (2014, pp. 4–15).

  26. The older version of The Bible, written before the birth of Jesus from 1400 BC to 200 BC, is known as The Old Testament.

  27. The new version of The Bible, which was written around 70 AD, is known as The New Testament.

  28. Note: There are many commentaries on The Bhagwat Gita, but the oldest and most influential are those interpreted by Adi Shankaracharya, Ramanujacharya, and Madhvacharya. As per these commentaries, God created four classes in the society according to Guna and Karma.

  29. Bhagwat Gita As It Is.

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Authors and Affiliations

  1. Indian Institute of Management Rohtak, Rohtak, Haryana, India

    Ashu Tiwari & Archana Patro

  2. Management Development Institute Gurgaon, Gurgaon, India

    Imlak Shaikh

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  1. Ashu Tiwari
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  2. Imlak Shaikh
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  3. Archana Patro
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Correspondence to Ashu Tiwari.

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Tiwari, A., Shaikh, I. & Patro, A. Insurance and risk practices: an exploration of religious texts to reveal the evolutionary development of insurance institutions. J. Soc. Econ. Dev. 20, 274–292 (2018). https://doi.org/10.1007/s40847-018-0070-6

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