A World Without Insurance: How Insurance Powers the Economy

Most folks know insurance is the thing that pays to repair damages to homes and cars. But if people stopped to think about what insurance means to today's economy, they'd realize that insurers and the nearly 3 million people they employ nationwide make possible projects of all sizes. From airports, to stadiums and arenas, to coffee shops, to local childhood literacy programs. So to comprehend the many ways insurance makes the economy better and stronger, try to imagine a world without insurance. So what would that look like? For starters, hazards like natural catastrophes and motor vehicle accidents would result in far greater losses of life and property. However, through insurance's support for the Insurance Institute for Business and Home Safety, the Insurance Institute for Highway Safety, and other organizations, homes are safer and more resilient. And motor vehicle deaths have plummeted to a fraction of what they were before 1960. Insurers also collect and analyze data and study ways to make the public more aware of the negative effects of distracted driving and to rate community preparedness. Without insurance, driving to work or having goods delivered to homes and businesses would be a lot riskier and potentially cost more for tens of millions of Americans. Also, workers might not be covered for injuries and illness that happen on the job, which would result in lost wages and financial disruption for families everywhere. But because insurance studies risks and compiles statistics to share with local, state and federal governments, as well as private institutions, we have policies and laws in nearly every state requiring motorists to have some form of coverage. And all 50 states have workers' compensation laws. Three, two, one. And without insurance, innovation might slow to a crawl, or perhaps not happen. The insurance industry as we know it was built to empower risk-takers who have created our modern economy. For more than 300 years since the Enlightenment and Age of Exploration, insurance has been the driving force that has underwritten investments in transformational technologies. From steam power, to mass production, to aviation, to automation and information networks, to future advancements in artificial intelligence, nanotechnology and big data. But perhaps insurance' biggest and most often overlooked contribution to economic growth is its key role as a major source of funding for projects large and small. This capital is vital to paying long-term claims, so insurers' investment portfolios often include private and municipal bonds that help finance the growth and prosperity of communities everywhere. Right after tragedy, you need help. And that's what insurance is there for. We act as the financial first responder after catastrophe. We get into the communities, we help rebuild and restore people's lives and the economy more broadly. We act as a partner to governments and households and businesses, and we help them understand what the risks are, help them mitigate the risks, and in turn they will become more resilient and sustainable for the future. A world without insurance, it's pretty safe to say that life would be a lot different, and probably not as exciting. And this is why insurance is honored to play a part in making your economy more robust and resilient every day of the year.