Is insurance industry a Public good or Common Resource.?

Answer 1

Insurance is a regulated, private industry.

Answer 2

A public good is non rivalrous and non excludable, so it will only be provided by the Government, eg, police force. A common resources property is non excludable but rivalrous, eg, fishing on the high seas.

The insurance industry is therefore a private good, as it is both rivalrous and excludable (by price). They make profit because of the law of large numbers: something unpredictable for an individual is highly predictable in a mass. So providing that an insurance company can sell a large number of policies, and each of them is independent of each other, they have a large chance of making profits.

Answer 3

Neither ... these days Insurance is simply a way to make money.

There MAY have been a time in the past when some 'honest broker' would collect small contributions from 'members' in order to create a 'funding pool' (or Common Resource) from which payments could be made to those unfortunate to have accidents etc. during the year - with any left over being returned to the members.


However these days the '(dis)honest broker' likes to drive around in expensive cars, live in a mansion and receive a million ££ bonus every year ... and the LAST thing they want to do is actuallly pay out any funds ...

Answer 4

To posses insurance is neither a right nor is it a commodity like most common resources. One must have a desire to protect what are most important to that individul to want to purchase insurance. It is a choice in most cases... in some it is government requirement to own such as auto insurance or home owners insurance. But to look at insurance like life insurance, health insurance, or disability insurance as a common resource is the same as treating your very existance as if you yourself were a commodity.

Insurance companies are indeed out to make a profit... it is what allows them to keep insuraning more people, only the companies that are truely disreputable are going to make their insureds jump through many hoops inorder to have the promise kept. That is why I consistantly tell people, a cheaper policy does not make a better policy.

Answer 5

Insurance is one of the fundamental ingredients that made this country great. The great expeditions in history were only made because an insurance underwriter agreed to cover the losses should the expedition fail.

Insurance gives businesses the confidence to take risks and strive to boost the economy.

Insurance is an integral part of the society we live in today - without it many of the advances of discovery or technology would not have taken place.

Forget the moment you look at your renewal premium for you little motor car and sigh because it has gone up £20 & remember that PART of the reason you live in an advanced western society & have the pleasure of driving you motor vehicle is due to insurance.

I speak the truth- lecture over.

Answer 6

Neither. They provide a financial tool. How people use the tool is up to them. They can be used, abused, and misused.

Insurance is a PRIVATE INDUSTRY. AIR and WATER are common resources.

Answer 7

It's a business that makes profit. It is not a service or a moral organisation. Most insurance companies avoid paying out as often as they can - they are driven by money not compassion.

Answer 8

idk lol