Growth and Role of Property/Casualty Insurance
Sharing, or pooling, of risk is the central concept of the business of insurance. The idea has the beauty of simplicity combined with practicality.
If risks—chances of loss—can be divided among many members of a group, then they need fall but lightly on any single member of the group. Thus, misfortunes that could be crushing to one can be made bearable for all. Viewed as a form of mutual aid, risk-sharing can be seen not only as sound business practice, but as enlightened social behavior rooted in accepted principles of ethics.
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