Value-based management

Guoqiang Li

2.1 INTRODUCTION

Modern insurance started in the UK more than 400 years ago, when the first insurance legislation was enacted by the English parliament in 1601. Lloyd’s of London, a unique insurance market with a concentration of specialist underwriting expertise, started at Lloyd’s Coffee House in 1688, in an era when the coffee house was the central meeting place for ship owners seeking insurance for their voyage. Since then, insurance has played a critical and indispensable role in the global economic and social development (The Geneva Association 2012; Weisbart 2018). The five areas in which insurance contributes to and/or benefits society can be summarised as follows:

1. it supports innovation, economic development and economic growth;
2. it promotes social stability and improves quality of life;
3. it provides funding for long-term projects;
4. it complements the government safety net and welfare system; and
5. it encourages risk management best practices.

A vibrant insurance industry and profitable and financially strong insurance enterprises are the essential ingredients of a vibrant economy and a prosperous society.

At the highest level, insurance businesses are often classified into three types