What Is the History of Insurance?

Grade: 9 Lesson # 12

What is the history of insurance?

What is the purpose of pooling resources?

SS.912.FL.6.1 Describe how individuals vary with respect to their willingness to accept risk and why most people are willing to pay a small cost now if it means they can avoid a possible larger loss later.

Correlated Literacy Standard:

LAFS.910.RL.1.1 Cite strong and thorough textual evidence to support analysis of what the text says explicitly as well as inferences drawn from the text

Understanding Insurance

Lesson Number : 12

Correlated Florida Standards (See Full Text on Cover Page)

LAFS.910.RL.1.1

Essential Question

What is the history of insurance?
What is the purpose of pooling resources?

Learning Goals/Objectives

Understand the history of insurance
Understand the concept of pooling resources

Overview

This lesson provides an overview of the history of insurance. It uses a simulation to demonstrate how the pooling of resources can be valuable for helping societies survive and thrive.

Materials

Pencils/pens
PowerPoint “History of Insurance” (Included in Lesson 12 file)
Handout 1 “Seeds of Hope Article” (Included in Lesson)
Handout 2 “Seeds of Hope Questions” (Included in Lesson)
Seeds of Hope Answer Key (Included in Lesson 12 file)

Time

50 Minutes

Activity Sequence

INTRODUCTION/HOOK (10 Minutes)

Begin by having the students imagine they are stuck on an island a mile out from Miami Beach. There is a hurricane coming and they only have enough food to last for a few days. What ideas do they have so that they can conserve food to be able to survive the storm? Answers may vary.
Have students take out a pen or pencil (or hand out a class set). Each pen or pencil will represent their food.
Divide the class in half and separate the groups into the following:
Students who do not work as a community and instead just keep their own food to eat.
Students who pool all of their food (pens and pencils in this scenario) together as a community.
Ask students what the pros and cons of each group are.
Next, pretend you are the hurricane and go through and take away food (i.e. pens and pencils) from random students. The outcome should leave some people who were in the independent group without food, while the group that decided to share their food as a community will be left with food for all (albeit less food than before). Discuss why you would want to be in the community group vs. the independent group. Answers may vary.

ACTIVITY

(15 Minutes) PowerPoint “History of Insurance”. Students are to take notes on the PPT slides as you lecture on the history of insurance and resource pooling.

(15 Minutes) Students read “Handout 1 Seeds of Hope Article.” They then complete “Handout 2 Seeds of Hope Questions.” Answers can be found in document “Seeds of Hope Answer Key” attached.
What was the reason that Rosalba and the other 8 women originally pooled their money?
Originally, how many pesos did each woman contribute? What was the total amount raised by all of the women in Dollars?
What did the women discover when they pooled their money. Were they able to buy enough food for their families?
What programs are the families of “Merquemos Juntos” able to develop because they pooledtheir money?
Identify one area in your life where you could use pooling of resources.

(5 Minutes) Discuss the article “Seeds of Hope” and answer questions students may have. Students should write a paragraph in their notes connecting the article “Seeds of Hope” to the history of insurance. Possible answers include—people pooling their resources in times of need, just like ship merchant’s did in England in the 1600s, how pooling money enables us to have a bigger pot for disasters (like London Fire that destroyed 13,000 homes), etc.

CLOSURE

Review essential questions and answer any final questions. (5 Minutes)

OPTIONAL EXTENSION SUGGESTION/HOME LEARNING

Students could write an essay on how pooling resources is a valuable tool in times of disaster. How would they organize a resource drive after a hurricane?
Students could also write an essay on the history of insurance. They should pick a specific event for insurance (E.g. London Fire which destroyed 13,000 homes) and discuss how insurance has evolved due to disasters.

Sources/Bibliographic Information that contributed to this lesson:

Griffith Foundation

Handout # 1 Seeds of hope in fields of war

Colombia's poor find a way to survive amid the chaos

By Steve Nettleton CNN.com Correspondent

BARRANCABERMEJA, Colombia (CNN) -- Rosalba Gomez would never have believed that a visit to the market with only 500 pesos (25 cents) could spare her son from a life with the guerrillas.

Years later, with her son enrolled in a university, while all his former friends have enlisted with rebels or criminal gangs, she feels she never made a smarter investment.

Rosalba Gomez (right) credits the women's cooperative Merquemos Juntos, or Let's Shop Together, with sending her son to college

"I sent my son to Bucaramanga (a city 100 kilometers [60 miles] away) when he was 13 and now I thank God," Gomez said.

Thanks to a scholarship fund, she has been able to put two of her children through college. She said she hopes to send her third to university when he finishes high school.

The auspicious shopping trip that changed her life came in 1993. It was a modest attempt by nine women to find food for their families in one of Colombia's most-violent cities.

Unemployed and desperately poor, Gomez and the others had few options.

They lived in a run-down "commune" northeast of Colombia's oil center, Barrancabermeja, in an area controlled by the country's second-largest guerrilla organization, the National Liberation Army, or ELN.

Forced to follow the whims of gun-toting guerrilla militiamen who did not hesitate to kill anyone they suspected of collaborating with the police, army or right-wing paramilitary groups, the women felt trapped in their own homes.

Guillermina Hernandez (center) is one of nine women who began a cooperative by pooling their grocery money. The co-op runs a store, a scholarship fund, a trust fund and other programs

When they ventured outside their neighborhood, crossed the railroad tracks and entered government-ruled Barrancabermeja, they were treated as pariahs.

"The government sees us all as guerrillas. All doors in the city are closed to us," said Guillermina Hernandez, one of the nine.

"If you go to asking for a job at any business, if you are from the northeast, you don't get work. This has a terrible effect on the community, because if we don't have a job, we don't have food, we can't have an education, we don't achieve anything without a job."

Let's Shop Together

Seeking to surmount their dire circumstances, Hernandez, Gomez and seven other women pooled what little grocery money they had. They hoped that, as a group, they could buy more. Each pitched in 500 pesos, and together they went to the market.

It paid off.

Not only did each woman receive enough to feed her family, but also the women had some left over. The women resold the surplus to pay for other daily needs and began again.

The women then sought help from a local priest, obtaining a loan to help them buy foodstuffs. More families joined, and before long a humanitarian aid organization offered to help them.

Today, there are 44 families in the program, called Merquemos Juntos, or Let's Shop Together.

"All of the 44 families didn't know each other from before," Hernandez said. "We weren't friends. If we ran into each other, we were distant: You are there; I am here. Now when we meet,

we feel like one family of 44 families." Merquemos Juntos now goes far beyond shopping.

Members staff a cooperative store on the grounds of a church in their neighborhood. They teach -- and some learn -- basic job skills, such as sewing, to give unemployed women a source of income. But most importantly, Hernandez said, they have established a trust fund for area children to go to school in other cities.

The communes, where armed groups often pressure young people to join their ranks, is a dangerous place for children to grow up.

"The economic situation that we are living in makes this a reality," said Angel Miguel Solana, a community leader. "There are many children who leave to go pick coca (the plant from which cocaine is made). That is no secret. They go to the paramilitary groups, or they go to the guerrillas. There are few kids who have the guidance of their parents."

So far, Merquemos Juntos has managed to send nine children to high school and 13 teens to university. And Hernandez hopes to expand the project even further.

"My dream for the future is to be able to have in this area a cooperative for credit, for savings. We don't know what we will name it, but it should be where the people have access to it, where someone won't tell them that because they live here, their house has no value, and they can't get a loan," she said.

"From the top of the bridge (the dividing point between the communes and the city), everything here is (seen as) worthless. For those of us who live here, if we don't do something for ourselves, nobody will."

The members of Merquemos Juntos teach job skills such as sewing to help unemployed women earn money

Hamdout #2

Name:

Read “Seeds of Hope in Fields of War’ from CNNfyi.com and answer the questions below.

1. What was the reason that Rosalba and the other 8 women originally pooled their money?

2. Originally, how many pesos did each woman contribute? What was the total amount raised by all of the women in Dollars?

3. What did the women discover when they pooled their money. Were they able to buy enough food for their families?

4. What programs are the families of “Merquemos Juntos” able to develop because they pooled their money?

5. Identify one area in your life where you could use pooling of resources.