Understanding the foundations and complex ecosystem of modern insurance

Over the course of its development and the given socio-economic and market conditions, insurance has taken on different forms, changed fundamentally in its essence and purpose, became increasingly specialized and sophisticated, developed as a historical practice, and turned into an indispensable element of the current finance system worldwide. And although insurance has launched as a protective tool implemented only at a very personal scale – a typically communal aid from those who prospered in their earthly journey and on whom others counted in order to overcome difficult times – it has burgeoned in power and capacity increasing throughout the years, ultimately leading to the sophisticated globalized system that we observe today. Yet, the primary role of insurance has remained unchanged within a broad societal scope: to protect and insulate the economic agent from unforeseen circumstances which may create a negative and irreversible impact on his/her well-being or even outcome. Thus, with large firms specializing in insurance activities managing around 25% of financial assets worldwide.