From fires and floods to theft, workplace injuries and auto crashes, individuals and businesses face a variety of potentially catastrophic risks every day. Losses include property damage, injury and even death. By creating tools to manage uncertainty and loss, property and casualty insurers provide crucial personal and professional protection.

According to the American Insurance Association, 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 insurance coverage in the United States. About 2.3 million people are employed by the industry, working for insurance companies, agencies and brokerages.

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

The U.S. property and casualty insurance market evolved from British practices, with the first U.S. fire insurer started by Benjamin Franklin in 1752. By the early 1900s, many of the major lines of insurance we 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's well-known P&C insurance companies.

State Farm founder GJ Mecherle 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 farming town of Bloomington, Ill. G.J. Mecherle, the founder of the company, didn't think it was fair that he and his fellow farmers and families in rural communities paid the same auto insurance rates as those in Chicago.

Just days after the company opened its doors, a new policyholder collided with another vehicle. State Farm had its first claim, and along with it, the opportunity to deliver on the company's fundamental promise to be there when the unexpected happens. And so it did, paying the claim the very next day and earning a lifelong customer.

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

A A woman walks into an Allstate insurance office in South Russell, Ohio on Nov. 3, 2009. (AP Photo/Amy Sancetta)

2. Allstate Corp.

The idea for Allstate Insurance Company came during a bridge game on a commuter train in 1930, when insurance broker Carl L. Odell proposed the idea of selling auto insurance by mail to his neighbor, Sears Roebuck & Co. Chairman General Robert E. Wood. The idea appealed to Wood, and he passed the proposal to the Sears board of directors, which approved it.

Allstate Insurance Company, named after Sears' tire brand, went into business on April 17, 1931, offering auto insurance by direct mail 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 Sears pavilion. In 1934, Allstate opened its first permanent sales office in a Chicago Sears store.

(Photo: Craig Barhorst/Shutterstock.com)

3. USAA Insurance Group

USAA was founded in 1922 by a group of U.S. Army officers when they were unable to secure auto insurance because of the perception that they, as military officers, were a high-risk group. As a result, they decided to self-insure one another. The organization was originally called the United States Army Automobile Association. In 1924, the name was changed to United Services Automobile Association (USAA), when commissioned officers of other U.S. military services became eligible for membership.

Prior to 1996, eligibility for USAA membership was limited to commissioned officers in the U.S. armed forces, cadets and midshipmen at the U.S. service academies and a few other specific military-related designees. In 1996, eligibility was extended 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 their eligible family members. They also offer some products to individuals with no military affiliation.

Image: Wikipedia

4. American Family Mutual

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

Herman opened the doors of Farmers Mutual Automobile Insurance Company on Oct. 3, 1927, in Madison, Wis. Over the years, the market grew from rural areas to small towns, suburbs and metropolitan areas.

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

Farmers Insurance blimp (Photo: Ivan Cholakov/Shutterstock.com)

5. Farmers Insurance Group of Cos.

John C. Tyler and Thomas E. Leavey opened Farmers Automobile Inter-Insurance Exchange out of a one-room office in downtown Los Angeles, Calif., in 1928. Tyler, the son of South Dakotan insurance salesman, and Leavey, who had formerly worked for the Federal Farm Loan Bureau and the National Farm Loan Association, recognized that farmers, ranchers and other rural drivers were an overlooked market and decided to create their own auto insurance firm.

During the Great Depression, Farmers was one of the few companies able to pay customers' claims in cash instead of IOUs.

Today, the companies comprising the Farmers Insurance Group of Companies make up one of the country's largest insurers of vehicles, homes and small businesses and provide a wide range of other insurance and financial services products. Farmers serves more than 10 million households with more than 20 million individual policies across all 50 states through the efforts of over 50,000 exclusive and independent agents and nearly 24,000 employees.

Chubb Corporation logo Image: Wikimedia

6. Chubb Corp.

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

The Chubb Corporation was formed in 1967 and was listed 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 property and casualty customers from some 120 offices in 27 countries around the globe. Chubb works with 8,500 independent agents and brokers worldwide.

Image: Wikipedia

7. COUNTRY Financial

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

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

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

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How 7 P&C insurers got their start

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