Capturing uncertainty: the role of insurance in the construction of modern life

Traditional accounts of the history of insurance typically treat demand as a function of the availability of new and lower-cost forms of insurance. This paper draws on more recent research to illustrate the dialectical relationship between the demand for and supply of insurance services as the industry developed from the 17th through the 20th centuries. We argue that insurance companies have played a key historical role in creating a market for their products by transforming both popular and official attitudes towards insurance. Over the course of time insurers have been singularly successful in combining a measure of moral exhortation with the effective inculcation of precautionary behavior while at the same time discriminating against risky actions through the imposition of high prices or even the outright denial of insurance coverage. Ultimately these developments have allowed the insurance companies to act as gatekeepers by interposing themselves between the state, the public, and other industries.