The social value of insurance
This series of papers considers the role of insurance in society, focusing in particular on the benefits it brings and risks it mitigates.
Insurance has a long and distinguished history. The UK has played its part in the insurance story, from as far back as the reaction to the Great Fire of London in 1666 and the development of insurance trading in Edward Lloyd's coffee shop in 1688.
It is an essential part of everyday life, playing a crucial role in both economic development as well as having a role in supporting wider societal ends.
Of course there are always challenges from consumers and competitive requirements which continue to focus our sector on constantly adapting and renewing its commitment to providingthe public peace of mind.
Though insurance products are provided in a commercial context, both for individuals and for corporate customers, they clearly serve a wider purpose. Insurance helps oil the engine of the economy, for example in underwriting trade through trade credit. It also provides peace of mind to the public through collective insurance for a host of perils including flood, fire, and health. In short, the economy and society as a whole benefits from the certainty insurance brings through (to quote our first paper in this series):
- Efficiently protecting the public through innovative risk management techniques.
- Freeing up businesses and professionals from everyday risks and encouraging innovation and competition.
- Relieving the burden from the state and providing comfort to individuals by providing safe, effective and affordable pension savings, protection and de-cumulation products that convert pension savings into retirement income.
These are just some of the areas where insurance contributes to society. As the professional body for the insurance sector dedicated to protecting the public, the Chartered Insurance Institute is looking at various aspects of the social role that insurance plays. We thought this might be helpfully brought to life with a series of short papers considering this concept in greater detail, setting out the purpose, which is often intangible, of insurance and the benefits it brings and risks it mitigates. Insurance is vital. Just imagine a world without it.
Briefing papers in the social value of insurance series:
- Imagine a world without insurance, if you can. Explains the value of insurance by describing a world without it.
- The mechanics of insurance: the magic of averages in aid of the millions. Explains how insurance works and the concept of risk pooling.
- Motor insurance: taking the fear out of driving. Explains how motor insurance not only provides peace of mind but also works to improve road safety.
- Safe as houses: flood insurance and a history lesson for the future. The work of the insurance industry to prevent floods, drawing on the example of fire insurance.
- Climate change and insurance: not just coping but helping. The role of the insurance industry in mitigating and preventing climate change. (Coming soon)
- Income protection insurance: taking the burden from the welfare state. Explains how protection insurance already removes some burden from the welfare state, but this could be improved. (Coming soon)