Insurance in the Digital Age

INSURANCE has an important social purpose. It allows policyholders to share the cost of potential risks that they all face, but cannot bear the cost alone. These might be any one of a wide range of risks associated with anything from sudden illness, damage to property or loss of income to environmental damage or terrorism, and insurance therefore covers a whole range of people or groups. It enables a young mother to afford medical care, or a building owner to repair damage following a terrorist attack.

Partly because of these many variables, it is a highly complex business and though perhaps not as obviously sexy as banking, it is essential to the global economy and financial system. As we saw in the 2008 bailout of AIG, the decision was taken to bail out the group to e…