The first thing that comes to mind when people think of insurance is probably the monthly payments they must make to keep their businesses open. They most likely do not immediately think about all the benefits that insurance gives to the world. When you buy insurance, you are buying a promise. It’s a promise that if anything catastrophic happens to your business, your carrier is going to assist you to make your business functioning again. Insurance companies help keep individual businesses and the economy strong and continuously growing in various ways. Here are three main reasons how the insurance industry benefits the world at large.
Insurance companies help businesses alleviate risk and protect their employees.
Helping businesses mitigate risk can have a lasting positive impact on the economy. Insurance is the safety net for when risks go wrong and allows entrepreneurs to explore opportunity. Therefore, insurance drives growth, because it allows businesses to undertake higher-risk, higher return activities than they would in the absence of insurance. These actions help businesses run successfully which allows for more jobs and an increase in economic activity. If a key member or a piece of equipment go out of commission, the business can carry on thanks to insurance.
The insurance industry is a major contributor to charitable causes
A 2020 report by McKinsey and Company found that charitable giving in the insurance industry has held steady around $560-$600 million annually from 2015-2019. The level of giving has remained consistent with an emphasis on education, health and social services, and community. Insurers more evenly value a balance of business needs, stakeholder interest, and community needs for their charitable programs. Additionally, insurance companies typically invest premiums, or dollars, that are not used to pay claims and other operating expenses, which then often finance building construction and provide other crucial support to economic development projects around the nation. The insurance industry is constantly working together toward common philanthropic goals to benefit the growth of the economy.
Insurance protects the Small Guys.
When you look at your industry, you see the “big guys” and the “small guys”. If something goes wrong, the big guys will be able to survive. But what’s protecting the small guys? As a result, they are much more cautious and, in some cases, they may even sell out to the big guys. If enough of these little guys leave the industry, all that’s left is a monopoly. However, because of insurance, the small guys have a much greater chance of surviving. The little guys can take risks which means they can stick around much longer, preventing monopolies from forming.
Insurance is much more than monthly premium payments consumers and businesses must make. Insurance is what allows dreams to become a reality by providing a safety net for new opportunities. The insurance industry in its entirety is a vital piece in the formation of a strong American economy.
Written by our intern – Esti Davis
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Worthy Insurance is a niche broker with a focus on providing insurance placement and risk management services to the Healthcare, Manufacturing, Social Service, and Main Street business communities. Here at Worthy Insurance, we love to provide you with exciting and fun articles to learn more about insurance and how it impacts your life. Visit our other blogs to find more information.
While Worthy does offer a wide variety of insurance coverages, our main coverages include property coverage, worker’s compensation insurance, general liability, professional liability, and cybersecurity coverage. To find out the best coverages for your company, use the contact form below so you can be at ease knowing your company is covered. For personal insurance, please visit Vero Insurance.