From fires and floods to theft, workplace injuries and autocrashes, individuals and businesses face a variety of potentiallycatastrophic risks every day. Losses include property damage,injury and even death. By creating tools to manage uncertainty andloss, property and casualty insurers provide crucial personaland professional protection.

According to the American InsuranceAssociation, the P&C insurance industry pays out more than$400 billion annually in policy benefits. To meet this demand,there are approximately 2,700 companies providing P&C insurancecoverage in the United States. About 2.3 million people areemployed by the industry, working for insurance companies, agenciesand brokerages.

Property and casualty insurance traces its modern history backto marine insurance in the late Middle Ages. Merchants and bankersbecame concerned about the safety of shipments due to piracy,storms, and other perils. Bankers began providing guaranteesagainst loss, while merchants paid the bankers a fee for thisprotection. (See, “Property-Casualty Insurance Basics.”)

The U.S. property and casualty insurance market evolved fromBritish practices, with the first U.S. fire insurer started by Benjamin Franklinin 1752. By the early 1900s, many of the major lines of insurancewe know today had developed.

How did the current P&C “power hitters” get their start?Here's a quick look at the humble beginnings of seven of today'swell-known P&C insurance companies.

State Farm founder G.J.Mercherle. (Image: Screenshot from a video located at www.statefarm.com)

1. State Farm Automobile Insurance

State Farm was founded in 1922 in the small farmingtown of Bloomington, Ill. G.J. Mecherle, the founder of thecompany, didn't think it was fair that he and his fellow farmersand families in rural communities paid the same auto insurancerates as those in Chicago.

Just days after the company opened its doors, a new policyholdercollided with another vehicle. State Farm had its first claim,and along with it, the opportunity to deliver on the company'sfundamental promise to be there when the unexpected happens. And soit did, paying the claim the very next day and earning a lifelongcustomer.

With more than 84,000 agents and employees, the company servesover 80 million policies in the U.S. and Canada today.

A A woman walks into an Allstate insurance officein South Russell, Ohio on Nov. 3, 2009. (AP Photo/AmySancetta)

2. Allstate Corp.

The idea for Allstate InsuranceCompany came during a bridge game on a commuter train in 1930,when insurance broker Carl L. Odell proposed the idea of sellingauto insurance by mail to his neighbor, Sears Roebuck & Co.Chairman General Robert E. Wood. The idea appealed to Wood, and hepassed the proposal to the Sears board of directors, which approvedit.

Allstate Insurance Company, named after Sears' tire brand, wentinto business on April 17, 1931, offering auto insurance by directmail and through the Sears catalog.

In 1933, at the Century of Progress World's Fair in Chicago,Allstate's Richard E. Roskam sold insurance at a booth in the Searspavilion. In 1934, Allstate opened its first permanent sales officein a Chicago Sears store.

(Photo: Craig Barhorst/Shutterstock.com)

3. USAA Insurance Group

USAA was founded in 1922 by a group of U.S. Armyofficers when they were unable to secure auto insurance because ofthe perception that they, as military officers, were a high-riskgroup. As a result, they decided to self-insure one another. Theorganization was originally called the United States ArmyAutomobile Association. In 1924, the name was changedto United Services Automobile Association (USAA), whencommissioned officers of other U.S. military services becameeligible for membership.

Prior to 1996, eligibility for USAA membership was limitedto commissioned officers in the U.S. armed forces, cadetsand midshipmen at the U.S. service academies and a few otherspecific military-related designees. In 1996, eligibility wasextended to enlisted personnel in the U.S. armed forces.

Today, USAA membership is open to U.S. military service members,veterans who have received a discharge type of Honorable, and theireligible family members. They also offer someproducts to individuals with no military affiliation.

Image:Wikipedia

4. American Family Mutual

In 1927, a struggling insurance salesman named Herman Wittwerdreamed of success selling auto insurance to Wisconsin farmers.Herman understood that farmers presented lower risks compared tocity drivers because they drove less often and put their cars up onblocks for the winter.

Herman opened the doors of Farmers Mutual Automobile InsuranceCompany on Oct. 3, 1927, in Madison, Wis. Over the years, themarket grew from rural areas to small towns, suburbs andmetropolitan areas.

The company's name changed in 1963 to American Family Mutual Insurance Company to reflect abroader customer base.

(Photo: IvanCholakov/Shutterstock.com)

5. Farmers Insurance Group of Cos.

John C. Tyler and Thomas E. Leavey opened Farmers AutomobileInter-Insurance Exchange out of a one-room office in downtown LosAngeles, Calif., in 1928. Tyler, the son of South Dakotaninsurance salesman, and Leavey, who had formerly worked for theFederal Farm Loan Bureau and the National Farm Loan Association,recognized that farmers, ranchers and other rural drivers were anoverlooked market and decided to create their own auto insurancefirm.

During the Great Depression, Farmers was one of the fewcompanies able to pay customers' claims in cash instead ofIOUs.

Today, the companies comprising the Farmers InsuranceGroup of Companies make up one of the country's largestinsurers of vehicles, homes and small businesses and provide a widerange of other insurance and financial servicesproducts. Farmers serves more than 10 million households withmore than 20 million individual policies across all 50 statesthrough the efforts of over 50,000 exclusive and independent agentsand nearly 24,000 employees.

Image: Wikimedia

6. Chubb Corp.

In the spring of 1882, Thomas Caldecot Chubb and his son Percyopened their marine underwriting business in the seaport districtof New York City. Having collected $1,000 from each of 100prominent merchants to start their venture, they focused oninsuring ships and cargoes. By the turn of the century, Chubbhad established strong relationships with the insurance agents andbrokers who placed their clients' business with Chubb underwriters,and the original subscribers enjoyed a substantial return on theirinvestment in the young company.

The Chubb Corporation was formed in 1967 and waslisted on the New York Stock Exchange in 1984.

With approximately 10,100 employees throughout North America,Europe, South America, and the Pacific Rim, Chubb serves propertyand casualty customers from some 120 offices in 27 countries aroundthe globe. Chubb works with 8,500 independent agents andbrokers worldwide.

Image: Wikipedia

7. COUNTRY Financial

COUNTRYFinancial was formed by a group of Illinois farmers in 1925 asa fire and lightning insurance company. A year later, the companyexpanded and began to offer coverage for autos and equipment.

In 1960, the company's home office was relocated from downtownChicago to Bloomington, Ill.

Today, COUNTRY Financial has more than 3,000 employees and 2,000financial representatives offering a full range of products andservices to meet insurance and financial needs.