The owners of property experienced fear for its safety because of the possibility of destruction or loss in connection with the natural calamities, the fires, the robberies and other unforeseen dangers in economic life.

Risky nature of public production is the main reason for uneasiness of each owner of property and commodity producer for his prosperity. The idea of the compensation of material damage via its solitary apportionment between interested owners of property arose on this basis. If each separately undertaken owner attempted to compensate damage for his calculation, then he would be forced to create the material or monetary reserves, equal in magnitude of the cost of their property, which is naturally ruinous.

Life experience, based on the long-standing observations, made it possible to make a conclusion about the random nature of extraordinary events and no uniformity of caused damages. It was noted that the number of interested economies is often greater than the number of victims who suffered different dangers. Under such conditions the solitary apportionment of damage between the interested economies noticeably smoothes out the consequences of the accidents and other chances.

The greater the quantity of economies in the apportionment of damage, the less the share of means to be received by each participant. This is how the insurance appeared, its essence is to compose the solidary locked apportionment of damage. Natural insurance was the most primitive form of the apportionment of damage, but in proportion to the development of commodity-monetary relations it yielded the place for insurance in the money form.

The apportionment of damage in the money form created, first of all, great possibilities for the mutual insurance, when the sum of damage compensated by its participants on solidary principles either after each insurance case or at the end of economic year. The mutual insurance under the conditions of capitalism began overgrowing into the independent branch of the insurance matter. If the insurance fund previously was calculated with the aid of the probability theory yet was not formed with the mutual insurance, then subsequently the probable average value of possible damage, which falls to each participant in the insurance, was adopted as the basis of insurance payments for the advance formation of insurance fund.

In the modern society the insurance grew into the universal means of insurance protection of all forms of property, incomes and other interests of enterprises, organizations, farmers, leaseholders, citizens.