Today most consumers undoubtedly think of insurance as a modern phenomenon. In reality, the basic concepts of insurance are thousands of years old. And insurance that closely resembles some of today’s products has been around since the Middle Ages.
As a result, when we speculate about what insurance will be like a century from now, it makes sense to think that in many ways it will still be very similar to the insurance products we have today. Insurance in Everett, Washington, is likely to be just as important to residents in 2115 as it is in 2015.
Early Types of Insurance
The purpose of any insurance is to offset risk. Over time, the types of risk that are most significant can change. For example, some of the earliest forms of property insurance were created in London after a fire in 1666 destroyed more than 13,000 homes. In the 1400s, maritime insurance policies protected ship owners against the loss of vessels and cargo.
It is hard to know what types of risk will most concern people in 100 years. A century ago it would have been virtually impossible for anyone to conceive of computers, air travel, interstate full of cars, etc. In that era, no one had health insurance. Today’s laws now require everyone to have health care protection.
It is possible that 100 years from now improvements in health care and longevity could make health care insurance obsolete. In 2012 in Massachusetts, Partners HealthCare System Inc.–the state’s biggest hospital and physician organization–purchased Neighborhood Health, an insurance provider. Perhaps in the future people will pay health care providers directly and eliminate the need for that type of insurance.
Insurance Needs Can Change
Insurance actuaries are constantly studying different types of risk and making adjustments in insurance coverage and cost to accommodate changing circumstances. For example, life insurance rates are based on the longevity of a population. As the average length of life increases or decreases, policies and their rates are adjusted accordingly.
Insurance is also subject to the whim of government regulators and politicians. Under current law, proceeds of a life insurance policy are exempt from estate and income taxes. That has not always been the case, and there is no assurance that it will be the case in 100 years or even in 5 years.
The only thing that is certain is that 100 years from now, insurance of some form is likely to still be important, just as it has been for many prior centuries.