The politics
of insurance

"Insurance" is creeping up the political agenda. It has never been there before. For the last century, the "private" insurance industry has thrived, an early global business sector, from Lloyds to the Hamburg Re. The rich have happily exploited the anxieties of those poorer than they are. And insurance has come to play a key role in mankind's management of anxiety.

For "insurance" has been central to modern man's management of anxiety.  If the institutions of the private insurance industry should prove too fragile to deliver insurance cover "on demand", there would have to be radical re-evaluation of "risk philosophies" throughout human society.  Modern man has become accustomed to assume that it will be possible to "buy insurance" for everything - a third-party accident caused by ones pet dog, or the inundation of the village fete, or a gyppy tummy picked up in Egypt.  My dear father was an insurance junkie: as a young bank clerk in Cardiff in 1905, he had supplemented his meagre income by selling insurance as a freelance agent - and he believed in insurance for every risk, until his death at the age of 92.

But the institution of "insurance" is in trouble. The sheer size of the world's population, rising above 6bn, greatly increases the level of demand.  Numbers are important, for the retail demand for insurance is the drive to reduce personal anxiety. The impact of the modern civil law of negligence, expanding massively since the 1930s, and extended the range of insurable events beyond the imagination of earlier generations. Lloyds was brought low by insurance policies written for employers in the 1930s.  Growing genetic sophistication will transform - and limit the utility of - "insurance".  The seemingly admirable principle that the Polluter should Pay will generate huge new insurance liabilities, and huge new demands upon the insurance business. 

And I suspect that the crisis is already upon us - unannounced, unrecognised, not yet politicised.  Insurance premiums in many sectors are rising so dramatically that many risks are going uninsured.  Commercial air transport could not continue without State subsidy.  Anti-terrorism insurance is widely underwritten by the State.  Smaller employers are having to operate without employee insurance, and the State cannot allow that to continue.  My own local experience confirms that, apart from local authority projects, insurance difficulties are now inhibiting local social initiatives.

The Government has assigned the problem to its Better Regulation Task Force.  But if the "private insurance industry" fails to perform its traditional risk-equalisation function, that will force a re-think throughout society.  My own sense is that there will be no alternative to an extension of the principle of state insurance, coupled with public service changes (e.g. in health) which modify the incidence of personal risk. 

• As socialists, we should not bury out heads in the sand. If capitalism fails, we shall have to pick up the pieces...

769  21July 2003  

J'accuse...

I accuse the august 120-year-old Fabian Society (of which I am a proud and active member) of the ultimate think-tank crime - namely, triviality.  The Society's much-trumpeted "Monarchy Commission" this week produced a tame mouse of a pamphlet, which might equally have been penned by the Third Lesser Left Footman of the Royal Bedchamber.  I cannot find any single point within it with which to disagree. I shall press the Fabian Society to spend its scarce time and resources on more important political issues.

What are those vital issues?  This is my list, in strict priority order.

• Fashion a new liberal social order, which while recognising the primacy of common public service, respects the individuality and human rights of all;
• Create a decent State Old Pension, and remove from future generations the scourge of reliance upon fragile private corporations;
• Create effective personal defences against the scourge of unemployment and related poverty;
• Build a learning society, continuing the excitement and fulfilment of individual learning into retirement;
• Construct a welfare state firmly founded upon entitlement, and not on discretionary means-tested benefits;
• Empower all citizens, acting both individually and in association, to defend themselves against the abuse of power by both the State and the Corporations;
• Construct a rational and systematic democratic UK constitution;

For goodness sake!  Leave the future of the Monarchy to the Third Lesser Left Footman of the Royal Bedchamber!