Insurance has played a crucial role in the empowerment of US citizens. It has transformed the lives of youths, families and company owners.
What is the History of Insurance?
The insurance concept began way back in the third and second millennium BC. Chinese, Babylonian and Indian traders employed the insurance concept in distributing and transferring risks associated with their economic activities. Charles Duhigg says that since the 17th century, insurance agents have been the foremost experts on risk. For instance, between 1750 and 1755, the Codex Hammurabi Law formulated a law that directed that any sea captain, ship charterer or ship manager that would salvage a ship from the utter loss was only required to pay half the value of the boat to the ship owner.
This practice by our forefathers has been resourceful. However, over the years, we have seen improvement that includes the sophistication of insurance systems, inclusivity of insurance policies and a rise of many insurance policy providers. Insurance is dynamic. Risks our forefathers sought Insurance against their loss have been solved over time, paving the way for a different set of risks. For instance, business risks that were not insurable before the covid-19 pandemic are now insurable in the post-Covid era.
The dynamics of insurable change depend on the prevailing political, environmental, societal and technological conditions. Different political tides invited additional insurable risks. For example, the Russian and Ukraine battle has posed potential business risks associated with political violence. Wars can cause detrimental effects on businesses. Think of the world wars and how the business sector suffered a significant blow.
Current Insurance Trends
Technological risks have been on the rise during the Ukraine-Russian war. Following developing news about the war, Russia has resorted to cyber intrusions as revenge mechanisms against Ukraine and NATO states. An increase in cyberattacks is a considerable digital risk that can leave many people devastated or even dead. Due to the digitalization of government and personal products and services, we have become susceptible to cyberattacks and cybersecurity failure. With such risks, businesses might suffer high overhead costs from impaired operational systems.
In light of climate change and action, a lot has changed. Currently, we are facing more climate-related risks, including damaging properties of infrastructure found along the coast due to the rising sea levels. An example is Hurricane Sandy in New York City.
Due to climate changes, agricultural production has dramatically reduced in some parts of the country. A national report on the economic risks of climate change in the United States has shown that the Midwestern and Southern counties will experience more than a 10% reduction in agricultural production for the next two decades.
What Does Insurance Offer?
Insurance offers a protective shield in the event of the occurrence of risks. You have experienced or heard of the myriad benefits of Insurance. You can benefit to an enormous extent from taking Insurance. Firstly, health insurance has been at the forefront of protecting the youths from impending financial crises. Medicaid has helped many disabled children and homeless kids. It has also expanded its coverage for youth aging out of foster care.
Youth in their foster years face health risks from mental health conditions, disabilities and drug abuse. Health insurance coverage have been a lifesaver for many children. However, a significant percentage of the youth do not have health coverage. According to statistics by Urban Institute, 49% of the youth have employer-sponsored Insurance, 10% have Medicaid or other public coverage, and another 10% have non-group health coverage. It thus translates to about 31% of youths being without health coverage. It might seem as though the number is small, but I can promise the impact is enormous, and we can all feel it.
Secondly, property insurance has enabled many to empower themselves and their families by owning businesses and properties such as land, buildings and machinery. Just as Millard Drexler would say that you can’t run a business without taking risks, we succeed by daring to dream and pursuing the dream no matter the costs. With this property insurance, you are sure to have a constant flow of income from your businesses, making significant investments and owning assets. That is how to plan and secure your future.
Why Buy Insurance?
Living with no life, health or property insurance is a considerable risk. You are gambling with your life, finances, properties and health. Choose to be a planner and not a ‘gambler.’ Working with an insurance company, some have been good, and others bad. Today, dwell on the positive experiences where someone has applauded the role of insurance companies in empowering and saving them from deep financial pits. For instance, where there have been business losses, car accidents, and disease outbreaks, Insurance has chipped in and made the situation more bearable. Insurance transforms you so much that you don’t realize that you once were in a pit. That’s the power of investing in Insurance.
Insurance companies ensure reliability through reinsurance as a strategy to lower risk. Reinsurance is the insurance that insurance firms purchase to safeguard themselves against disproportionate losses resulting from significant exposure. Reinsurance is essential to insurance firms’ efforts to maintain their financial stability.
For instance, based on models that indicate minimal likelihood of a storm affecting a geographic area, an insurance company may write excessive amounts of hurricane insurance. If the unthinkable occurred and a hurricane did strike that area, the insurance firm might suffer huge damages. Insurance firms might run out of business every time a natural disaster strikes if reinsurance doesn’t take some of the risks off the table.
On the flip side, some folks find it hard to get Insurance. Some of the contributing factors are unemployment and a wrong perception of Insurance. With the increasing digitization of services and goods, many are unemployed. The covid-19 pandemic has also increased unemployment since more workers were retrenched and laid down. Unemployment bars you from enjoying employer-sponsored Insurance and raising income to pay insurance premiums.
You can play a significant role in improving your life through Insurance. You are your own barrier to growth, health and financial security. We should work more to understand how we sometimes contribute to our misery. Just as Manoj Arora says that life insurance is mitigation to the risk of your life, financial freedom is mitigation to the chance of living your life! Choice has always been yours. Today, I challenge you to evaluate your life, health and property. Now, imagine losing one or all of these assets due to ignorance. We would be unwise to hear the nuggets we shared in the many discussions and brush them off. Putting this knowledge into practice will benefit and impact this and other generations.
Insurance Feed Lifestyle
Insurance could become our lifestyle if we adhere to it as our discipline. With practice comes perfection. We might not be where we want to be today, but we can now choose to be where we will be in the future. Learn to take the initiative. Become a responsible person by making an effort to be financially secure. You can start investing in Insurance with the little that you have. Dwayne “The Rock,” Johnson said that success in everything will always come down to focus and effort, and you control both.
Cultivating financial security and freedom through Insurance pays. You can earn returns from your premium payments to the insurers. It is a sure path to financial freedom that most people lack, because of poor decision-making, ignorance, and discipline. Who doesn’t want financial freedom? Your money working for you is the ultimate goal of Insurance.
Lastly, learn to educate yourself. There is no limit to what you can understand. Do your due diligence by researching Insurance. Knowledge is vital in taking risks. You will know what you are signing up for in advance. Therefore, you develop a mechanism to cushion yourself from such risks. Being more deliberate with improving yourself gives you the motivation to learn. Knowledge brings transformation, and the latter will contribute to your growth in various spheres of life.
With this knowledge, you are entrusted with the responsibility of drawing more and more people to journey with you in securing your future. Be a good ‘ambassador’ of Insurance. Create awareness of the importance of health, life and property insurance. In this way, you positively impact other people’s lives, which is your power.
Insurance is an integral part of your life and every human life out there. So, as you step out there, and while you pursue that career or dream job, you don’t want the ‘fear of loss’ to be a constraint on your growth.
Insurance won’t and will never eliminate loss, but it will reduce the risk to you as an individual and will ultimately save you a fortune.
