# Insurance

Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

## Quotes
### A

* w:Travel insurance is a line of insurance we consistently hear problems about. It’s much less regulated than other lines of insurance and tends to include exclusions for things consumers believe they’re covered for.”
** Carmen Balber, executive director of [Consumer Watchdog ]] Travel Insurance: Is It Worth It? When Covid-19 hit, travel insurance didn’t help many travelers recover the cost of their canceled trips. What, then, were they paying for? (

### B

* Insurance - an ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table.
** Ambrose Bierce in:The Unabridged Devil's Dictionary, University of Georgia Press, 1 December 2001, p. 133.
* Microeconomics is the study of how people make decisions in resource-limited situations on a more personal scale. It deals with the decisions that individuals and organizations make on such issues such as how much insurance to buy, which word processor to buy, or what prices to charge for their products or services.
** Barry Boehm "Software engineering economics." Software Engineering, IEEE Transactions on 1 (1984): 4-21. p. 4.
* In June, insurers started filing requests with the Delaware Department of Insurance to change their application forms to specifically ask applicants if they’d had COVID-19
* A lot were permitted to do this: A regulatory body known as the Insurance Compact has approved 32 such requests since March
* This is classic insurance reaction [according to Bob Hunter, director of insurance at the Consumer Federation of America and a former Texas insurance commissioner] They did it after AIDS and SARS
** Bloomberg Law reportsaccording to Life insurers screen for COVID-19 February 1, 2021
* At bottom, a sound insurance operation needs to adhere to four disciplines. It must (1) understand all exposures that might cause a policy to incur losses; (2) conservatively evaluate the likelihood of any exposure actually causing a loss and the probable cost if it does; (3) set a premium that will deliver a profit, on average, after both prospective loss costs and operating expenses are covered; and (4) be willing to walk away if the appropriate premium can’t be obtained. Many insurers pass the first three tests and flunk the fourth. They simply can’t turn their back on business that their competitors are eagerly writing. That old line, “The other guy is doing it so we must as well,” spells trouble in any business, but in none more so than insurance. Indeed, a good underwriter needs an independent mindset akin to that of the senior citizen who received a call from his wife while driving home. “Albert, be careful,” she warned, “I just heard on the radio that there’s a car going the wrong way down the Interstate.” “Mabel, they don’t know the half of it,” replied Albert, “It’s not just one car, there are hundreds of them.”
** Warren Buffett, Chairman's Letter - 2011. Berkshire Hathaway (February 25, 2012).
* Basically, the math of intelligently selling insurance is better than the math of intelligently buying insurance.
** Warren Buffett, (June 20, 2018)"1994 Berkshire Hathaway Annual Meeting Warren Buffett Charlie Munger Bill Ackman FULL Q&A". IDP, YouTube. (quote at 2:53:20 of 3:20:11)

### D

* In banking or insurance trust is the only thing you have to sell.
** Patrick Dixon, Futurewise (1998).

### E

* Just as we have the power to harm the ocean, we have the power to put in place policies and modify our own behavior in ways that would be an insurance policy for the future of the sea, for the creatures there, and for us, protecting special critical areas in the ocean.
** Sylvia Earle, The National Oceanic And Atmospheric Administration in:Effect of Violent Video Games on Kids; Dogs' Efforts to Keep Mail Safe; Spanish Government Sues Over Oil Spills,CNN.com, May 18, 2003.
* Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history.
** Dwight D. Eisenhower in: Joe Soss, et al., Remaking America: Democracy and Public Policy in and Age of Inequality, Russell Sage Foundation, 8 November 2007, p. 149.

### G

* The trade union movement represents the organized economic power of the workers... It is in reality the most potent and the most direct social insurance the workers can establish.
** Samuel Gompers, "Not Even Compulsory Benevolence Will Do." The American Federationist. January 1917, p. 47.

### H

* Most of us understand that innovation is enormously important. It's the only insurance against irrelevance. It's the only guarantee of long-term customer loyalty. It's the only strategy for out-performing a dismal economy.
** Gary Hamel in:Gary Hamel On Innovating Innovation, Forbes, 4 December 2012.

### I

* The demutualization of property and casualty insurers raises a series of conceptual and practical problems. The assets of a mutual are essentially community assets built-up over the generations of those living in the community.
** Insurance Brokers Association of Canada in its submission according to Why your home insurance is like a lottery ticket (Apr 13, 2012)

### J

* What, exactly, is the cost of this inaction? Estimates of the total national cost of medical malpractice range from $20 billion to $45 billion annually. But this number hardly tells the whole story. There also is the more hidden cost of defensive medicine, including unnecessary testing and second opinions that send patients scurrying through processes that would not otherwise be ordered and deepen the financial burden of America’s health care system by an estimated three percent of our country’s total health care expenditures. Who ultimately pays these costs? Reckless doctors? Faceless insurance companies? Seldom mentioned, the totality of these expenses ultimately falls exclusively on the consumer, since each malpractice award translates ultimately to increased malpractice insurance premiums, which, in turn, translates to either higher health care costs, fewer physicians (with less competitive pricing pressure), or both.
** Michael Johns, "Malpractice: Where Will It End?" Orthopedic Technology Review, September/October 2003, by Michael Johns: Advocating Statutory Constraints on Medical Malpractice.

### K

* Among the phenomena, of the causes of which we are ignorant, there are some, such as those dealt with by the manager of a life insurance company, about which the calculus of probabilities can give real information.
** John Maynard Keynes, A Treatise on Probability. Macmillan. 1921. p. 285.
* Almost half of the bankruptcies in the United States are connected to an illness in the family, whether people had health insurance or not. Middle-class Americans, who had the misfortune of either experiencing a medical emergency themselves or watching a family member suffer, were then forced to face the daunting task of pulling themselves out of debt. Bankruptcy law has allowed them to start over. It has given hope. Now this new law will put people on their own. Illness or emergency creates medical bills. We are telling the people that they themselves are to blame. At the same time, we are removing protections that would stay an eviction, that would keep a roof over the head of a working family. We allow the credit industry to trick consumers into using subprime cards, with exorbitant interest rate hikes and fees. Then we hand those same consumers over to an unforgiving prison of debt, to be put on a rack of insolvency and squeezed dry by the credit card industry. We are protecting the profits of the credit card industry instead of protecting the economic future of the American people. Americans are left on their own. That's what this Administration's "Ownership Society" is all about — you're on your own — and your ship is sinking.
** Dennis Kucinich, Speech on the floor of the House of Representatives, Congressional Record (April 14, 2005).

### L

* Many seniors understand that Social Security is social insurance as opposed to a program where we put money aside for our own retirement. But most elderly individuals think they're getting their money back. So it isn't selfishness as much as a misunderstanding.
** Richard Lamm in:Psychology today, Bell & Howell Information and Learning, Sussex Publishers.
* I detest life-insurance agents: they always argue that I shall some day die, which is not so.
** Stephen Leacock, Literary Lapses (1910), Insurance up to Date.

### M

* New Deal liberalism broke with progressivism in many if not most respects. Progressives wanted technocratic economic planning. By the 1940s, New Dealers dropped planning for Keynesianism. Most progressives were nativists who supported immigration restriction on ethnic or cultural grounds. New Deal liberals celebrated the melting pot and liberalized American immigration laws in the 1960s. Woodrow Wilson resegegrated Washington. Lyndon B. Johnson signed the Civil Rights Act and the Voting Rights Act. Franklin D. Roosevelt created Social Security and Johnson created Medicare. Wilson opposed national health insurance.
** Michael Lind, "Glenn Beck’s partisan historians", Salon, Apr 6, 2010.
Notes:
Regarding Lind’s comment about Wilson apparently opposing social insurance, he is quoting a chapter on the history of social security from an official Social Security history site. Although Wilson never pushed for social insurance verbally to the extent that Theodore Roosevelt, he nevertheless supported social insurance throughout his lifetime. In his work The State, Wilson had advocated a welfarist role for the state, arguing amongst its functions to be the provision of German-style insurance for workmen and care "for the poor and incapable." Also, during a conversation with his advisor Edward M. House in early 1918, Wilson noted his agreement (for the most part) with a program the British Labour Party adopted entitled “Labour and The New Social Order.” Amongst other reforms, the program called social insurance measures such as extended access to unemployment insurance and complete security against destitution; in sickness and health, in good times as well as bad, through the application of a National Minimum. The only point of the program Wilson was unsure about was the one related to a minimum wage; wondering how this could be maintained.
Wilson also expressed support for suggestions by Herbert Bayard Swope (also in early 1918) in which he suggested Wilson make an address calling for a broad range of reforms such as old age, health and employment insurance. However, Wilson was unsure is the time was right to do this, arguing in response
'My dear Swope, Your letter of yesterday interests me very deeply, I need hardly say, and furnishes much material for constructive thinking, but my present judgment is that this is not the time for formulation. If we were dealing with only one class, a statement could be made which I think would guide and stimulate rather than disturb, but just so certainly as such a statement was attempted at this time, there would spring up a grand controversy in which the selfish and exclusive interests of the country would speak loudest because through the largest number of the journals and magazines. I am afraid that, while we could easily hold our own in such a debate, this is not the wise time to start a debate which would distract attention from the matters immediately in hand and pressing for the right solution. Don’t you think there is something in that? Cordially and sincerely yours, Woodrow Wilson.'

### O

* It was the labor movement that helped secure so much of what we take for granted today. The 40-hour work week, the minimum wage, family leave, health insurance, Social Security, Medicare, retirement plans. The cornerstones of the middle-class security all bear the union label.
** Barack Obama in:Daily Labor Report, Issues 169-189, Bureau of National Affairs, 2010, p. A-1.

### R

* Unemployment insurance is a pre-paid vacation for freeloaders.
** Ronald Reagan in: Mark Baddeley A Qualitative Study of Coping with Unemployment, ProQuest, 2009, p. 26.

### S

* What the insurance companies have done is to reverse the business so that the public at large insures the insurance companies.
** Gerry Spence As quoted in Humanscape : Environments for People (1987), by Rachel Kaplan and Stephen Kaplan, p. 97.
* It is true that the theory of our Constitution is, that all taxes are paid voluntarily; that our government is a mutual insurance company, voluntarily entered into by the people with each other; that each man makes a free and purely voluntary contract with all others who are parties to the Constitution, to pay so much money for so much protection, the same as he does with any other insurance company; and that he is just as free not to be protected, and not to pay any tax, as he is to pay a tax, and be protected.
** Lysander Spooner, No Treason (1867–1870), No. VI: The Constitution of No Authority (1870), pp. 12–13.
* Life insurance became popular only when insurance companies stopped emphasizing it as a good investment and sold it instead as a symbolic commitment by fathers to the future well-being of their families.
** James Surowiecki in:The New Yorker, Volume 82, Issues 12-19, F-R Publishing Corporation, 2006, p. 28.

## See also

* Banking
* Taxation

## References

* ↑ The Evolution of Medicare Chapter 1: The First Round - 1912 to 1920
* ↑ Woodrow Wilson (1890): The State: Elements of Historical and Practical Politics. Chapter XV: The Functions of Government, p. 614.
* ↑ Labour and the new social order; a report on reconstruction by Labour Party (Great Britain). Executive Committee
* ↑ THE PAPERS OF WOODROW WILSON ARTHUR S. LINK, EDITOR Volume 46 January 16 - March 12, 1918, PRINCETON UNIVERSITY PRESS, PRINCETON, NEW JERSEY, 1984, p.423. The above is Wilson’s reply to Swope’s letter; dated February the 23rd 1918.