The value of insurance is implicitly acknowledged but rarely made explicit. In practice, insurance eliminates uncertainty and risk and so allows commercial risk-taking. It helps place small groups on a more competitive footing with larger rivals, so stimulating new growth. Insurance develops financial security and reduces economic wastage.

The value of non-life insurance premiums rose from some US$38.5 billion in 1965 to some US$265.1 billion in 1985 throughout the OECD (Organization for Economic Co-operation and Development) countries, matching the growth in GNP over the same period. The insurance industry was thus able to consolidate its overall economic position worldwide and occupy a position of growth. But like all commercial markets, the non-life insurance industry is not perfect. It suffers from alternate oversupply of its capacity, and volatility in current risk creates disequilibrium in pricing. When premiums become almost as unpredictable as losses, the insurance buyer is forced to turn to risk-financing solutions that are not based on conventional insurance. Thus, today no organization can depend solely on commercial insurance and the development of mutual dependence, and indemnification by means of a private pooling of risks is also a growth sector, receiving encouragement from national and world trade authorities.

Some US$10 billion of annual premiums have been identified in insurance organizations, which are the subject of this study. This sum received a considerable boost in 1986, when major US corporations sought liability insurance capacity to the value of some $1 billion, the subject of cyclical withdrawal by established American and European insurers and re-insurers.