Gresham provides outstanding educational talks and videos for the public free of charge. There are over 2, videos available on the Gresham website. Your support will help us to encourage people's love of learning for many years to come. The conventional model of risk transfer and sharing is being challenged. The traditional boundaries between the roles of the state, the private sector and the individual in managing risk are blurred.
With public policy now being both a driver of and a response to market developments, new models of risk sharing are being created. Who are the winners and losers from this shake up of risk? There might not be much that a trader from Rhodes in BC would recognise if he appeared here today - but he would recognise an insurance contract to protect him against the loss of cargo.
For it was in Rhodes in the first millennial before Christ, that traders came together to pay a premium knowing that if their cargo was lost in transit they would be compensated for their loss.
What would surprise those traders is the role insurance can play to deliver public policy. Compulsory third party motor insurance ensures that the innocent victim of an accident will be compensated for their loss regardless of the means of the driver at fault. The evolution of insurer funded fire brigades into a comprehensive publically funded fire service is a sign of how the boundaries between private profit and public interest shift.
The public interest in insurance has a number of different expressions. Prudential regulation of insurers provides customers with reassurance that an insurer will pay out in the event of a loss. Conduct regulation protects the insured whilst the legal framework around disclosures when taking out a policy ensures the insurer has a full picture of the risk they are insuring. The risk transfer between the insured and the insurer avoids a situation where a consumer looks to the state to compensate them for a loss.
