You can’t in­sure every­thing


There are practically no limits when it comes to listing everything that can be insured. But why are there still things that are difficult or impossible to insure, even if we wanted to?

At one time, property insurance enabled global trade via shipping; later, material goods were insured for individuals; in the 19th century, when people were so bold as to apply clinical economic criteria to human life, it was even possible to launch life insurance policies. The principle of insurance was one of the biggest social advances made during the era of industrialisation and was expected to provide a new form of social welfare, which was exactly what happened. The ever-evolving insurance industry has always been about cushioning individual fate with a customised collective. The instrument of statistical probability calculation allowed the rationalisation of solidarity, so to speak.

Nowadays, individual and social insurance has become an integral part of our daily life. Whether goods, tangible assets or valuables, illness, accident or invalidity, pets, vehicles and travel, legal disputes, crop failures and mishaps of all kinds, there are practically no limits when it comes to listing everything that can be insured. Why is this so important to us? And why are there still things that are difficult or impossible to insure, even if we wanted to?

Insurance creates security

Insurance is there to provide security where none exists. For example, I expect that the things I own can be lost only to a limited extent, since they will be replaced if the worst comes to the worst. If I find a dent in the side of my car, I replace it with a new part. So far, so functional. But what if there is a break-in and my family heirlooms are stolen? Although their value can be expressed in figures and replaced by a monetary payout, their intrinsic value, the memory of my parents, grandparents or ancestors is lost forever. Insurance is intended to mitigate risks – or at least their implications, as the risks themselves cannot be averted. Social insurance in particular ensures that the blow dealt by life’s individual ups-and-downs, such as unemployment or illness, is cushioned, at least in financial terms. But once again, while it allows us to worry less about making a living, it does not guarantee a happy life.

Ultimately, insurance is there to minimise risk in order that we take it anyway. Businesses are adventures with big objectives: Just as Columbus wanted to use his expedition to discover America, a modern start-up wants to use its algorithm to conquer the world. Insurance can be the factor that decides whether someone actually embarks on this adventure. But no insurance policy can guarantee that the business will be successful, because the circumstances and potential surprises are simply too diverse. Although there is the promise of some degree of compensation in the event of failure – for example, in the case of the state export risk guarantee – the insurance policy steps in only in the event of unforeseeable or uncontrollable actions by third parties. Even if success often requires luck, without determination and hard work, you are unlikely to achieve your goals. The things that you can, and indeed must, achieve through your own efforts cannot be passed on to a collective. These examples show that objective material assets, calculable indemnity and predicable risks are insurable. In contrast, intrinsic values, your emotional well-being and the management of your life in general cannot be insured.

Life remains a risk

The greatest challenge facing our affluent society is probably the realisation that this prosperity and the sense of well-being that comes with it cannot be insured. We cannot insure our security. As difficult as the idea might be to accept, we have to live with the fact that there will always be uncertainties that only we and no one else will have to overcome. So what does this mean for our lives and our society? There may well be objective reasons why – to give a topical example – it is difficult to take out insurance to cover a pandemic. It cannot be clearly localised and or is it clearly calculable due to its varying implications. But even if we were able to find a solution, it is difficult for an insurance company to influence how an individual copes with negative events and their consequences in life.

While some become desperate and barely able to cope without support, or at least the hope of support, others seek out new avenues, knuckle down and embark on a new life. The point is not to evaluate why some people succeed while others do not, as yet again the reasons are too diverse. It shows, however, that not all people are equally dependent on support when they find themselves in difficult situations. This in turn means that not everyone is prepared to fully provide for others. Collective solidarity is required to cushion the blow dealt by individual fate. And solidarity has always been understood as a two-way street – I can rely on others because they can also rely on me in an emergency.

Life remains a venture

So insurance cannot be effective in areas in which there is no collective fate, or in which no such fate can be created. Ultimately, this means that how we live our lives is entirely up to us. It’s a bit like love. None of us can decide where or when it happens. Turning that initial spark into a happy, ideally lifelong, relationship, however, requires attention, effort and prudence.

The Stoics perfected the art of not despairing when dealt a blow by fate, but rather of taking life as it is – in other words, accepting the things you cannot change. The Epicureans knew how to enjoy life, to find good things even in bad times and to see every day as a gift. We can still learn a lot from them today. Even if we yearn for security and would prefer to be able to insure it, life ultimately remains a risk – and being able to navigate through it has been the challenge facing us since time began. And that’s a good thing, because it is the very meaning of life.