Insurance in the U.S today is a billion Dollar industry that employs over 2 million Americans. Year after year the sector has maintained its stability as one of the country’s leading commercial industries. Maybe because it’s an industry that helps individuals or business organizations bear the cost of unforeseen loss, accident or in the case of theft.

In this article we are going to go back in time to see how this billion dollar industry was established in the U.S by Benjamin Franklin and a group of Philadelphia fire fighting companies. 


Philadelphia in the 17th century USA, was one of the country’s biggest cities with 15,000 residents. Fire outbreaks were a common occurrence back then. Benjamin Franklin, who owned a fire fighting company called the Union Fire Company, knew something had to be done to help residents recover from the loss of fire outbreaks so he contacted his fellow fire fighting company owners to discuss this menace.

In 1751 Benjamin Franklin, his fire fighting colleagues and other well to do members of the city came together and agreed to form the first American insurance company, the Philadelphia Contributionship to help citizens of the city recover their property in cash settlement in the eventuality of a fire outbreak.


In May 1752, the Philadelphia Contributionship company was formed and customers contributed equal amounts of money Premium to get fire hazard insurance policies on their properties. The insurance policy lasted for 7 years after which the money was returned to the policyholders . 

For a property to be insured the company had to evaluate the client’s property. If the risk of fire in a house was too high the house wasn’t insured. Premium rates were also set according to these evaluations. This move will later change the way houses were constructed in America.

Benjamin Franklin gave the new insurance company publicity in his newspaper The Pennsylvania Gazette. 143 members were registered in the first year of operation and there was no fire outbreak. When a client’s property was gutted by fire the insurance company will pay the insured a claim from a capital reserve fund.

After the success of the insurance company, Benjamin Franklin decided to create another type of insurance policy “Life insurance“.


Seven years later, after the Philadelphia Contributionship, Benjamin Franklin launched the first American life Insurance company, The Presbyterian Minister’s Fund. There were raised eyebrows and criticisms from provoked religious authorities as to why human life was being paid for. 

The criticisms stopped when the religious authorities realised how much the claims from life insurance helped widows and orphans.

As civilization sped up so was the need to create more types of insurance policies. Today we have a host of insurance policies to pick from. 


Today we have multinational Insurance companies like AIG, Allianz Life, American Automobile Association (AAA) etc, that provide varieties of insurance policies thanks to the innovation of Benjamin Franklin and his group of Philadelphia fire fighters. 

The internet has also been a huge factor in the way modern insurance companies operate today. Insurance firms have switched to Virtualization and have realised it’s a more effective way to operate. Anyone can easily go online from their smartphones or PCs to buy insurance policies.


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