Tim Harford has written on insurance using the title 'what makes gambling wrong but insurance right?' The wide-ranging article then proceeds to tell some of my favourite stories about the origins of insurance. These are all great for engaging an audience, whether that is your next prospect or your next speaking engagement, about the value of insurance.
Harford does a great job because he understands that the value of cover is not merely the claim payment – it is bigger than that. People who own insurance and never claim still gain from it, and he illustrates the way insurance can help grow the economy because it enables people to take reasonable risks without having to worry about being ruined by bad luck.
Back to that question about gambling though; which Harford never entirely answers. Of course, you may be of the view that gambling isn't wrong. But the reality is that, like it or not, insurance and gambling have this in common: they can be used for good and bad purposes, and so they are both regulated industries. That's why insurers like to observe the principle of indemnity when assessing sums insured, it is also why we have laws restricting the cover levels permitted on children. Henry Stern at InsureBlog reports on a case where an underwriter may have not applied that caution. Regulation has always been part of our industry, and to judge by recent developments, will increasingly be a part of it.