What are the social and economic values of Insurance?

What are the social and economic values of Insurance?

Dr. Mark R. Greene in his book “Risk and Insurance” has listed some of the social and economic values of insurance as follows:
i) The insurance reduces the amount of accumulated reserve fund needed to meet possible losses. For example, if each individual had to set aside such funds, he would need an amount far greater than the insurance company, because the individual not knowing precisely how much would be required, would tend to be conservative.

ii)  The insurance mechanism encourages new investment. Thus insurance brings about a better allocation of economic resources and increases production.
iii) Since the supply of invisible fund is greater than would be true without insurance, capital is available at a lower cost than would otherwise be true.
iv) Because insurance is an efficient device to reduce risk, investors may be
willing to enter fields they would otherwise reject as too risky. Thus society benefits by increased services and new products which are the hallmarks of increased living standards.
v)Because of adequate insurance coverage the entrepreneurs become better credit risk. In fact, today it would be difficult to borrow money from banks and lending institutions for many business purposes without insurance protection.
vi) Insurance companies engage themselves in loss prevention activities. This is because insurers know that if no effort is made in this regard, losses would have a tendency to rise, since it is human nature to relax vigilance when it is known that the loss will be paid by the insurer.
vii) Last but not the least, insurance contributes to business and social stability and peace of mind by protecting business firms and the family breadwinner. When adequately protected, a business need not face the grim prospect of liquidation following an insured loss. A family need not break-up following the death or permanent and total disability of a breadwinner.