Insurance has many advantages to society, as it helps to protect the wealth, health, and well-being of individuals and communities. Some of the advantages of insurance to society are:

• It protects society’s wealth by providing compensation for losses caused by natural disasters, accidents, theft, fire, and other risks. This reduces the burden on the government and the taxpayers to provide relief and recovery funds¹.

• It removes social evils by alleviating the suffering and hardship of the victims of unforeseen events. Insurance provides financial support for burials, widows, orphans, disabled persons, and other vulnerable groups².

• It maintains the standard of living of individuals and families by replacing their income or covering their expenses in case of death, illness, injury, or unemployment. Insurance helps people to cope with the loss of human wealth and to maintain their consumption and savings³.

• It provides social security benefits by contributing to the welfare schemes of the government. Insurance companies collect premiums from a large number of people and pay benefits to those who need them. This creates a pool of funds that can be used for social welfare purposes⁴.

• It promotes equitable distribution of loss by spreading the risk among many people. Insurance enables people to share the burden of losses that are too large for any one person to bear alone. This fosters a sense of solidarity and mutual aid among the insured⁵.

• It facilitates international trade by providing protection and confidence for exporters and importers. Insurance covers the risks involved in transporting goods across borders and seas. It also helps to settle disputes and claims arising from trade transactions⁶.

• It promotes investment by providing long-term finance for both the public and private sectors. Insurance companies invest the premiums they collect in various projects and securities that generate income and growth. Insurance also encourages saving and capital formation among individuals⁷.

• It supports innovation and entrepreneurship by reducing the uncertainty and fear of failure. Insurance enables people to take calculated risks and pursue new opportunities that may otherwise be too risky or costly. Insurance also stimulates research and development in various fields⁸.

• It enhances risk management by providing incentives and guidance for risk control activities. Insurance companies require their clients to adopt safety measures and preventive actions to reduce the likelihood and severity of losses. Insurance also helps to monitor and evaluate the risks faced by individuals and organizations⁹.

• It supports the credit system by guaranteeing the repayment of loans in case of default or damage. Insurance facilitates lending and borrowing by assuring the lenders that they will be paid if the collateral is destroyed or impaired by an insured event. This reduces the cost and risk of credit¹⁰.