University/Organization
Department of Mathematics
Actuarial Program
Illinois State University
Normal, Illinois
Title
The Social Purpose of Insurance and Why it Matters
Synopsis
The insurance industry, while it is one of the core parts of the modern economic system, endures a rather low public image, and miserable reputation. Customers view it as a dreadful necessity. We believe the main reason is misrepresentation of insurance as providing protection. We show that on the social scale the role of insurance is to increase rational risk taking in the society, not protect from risk.