The Need for ISI

Clearly, the evolution of risk management strategies has not kept pace with the globalization of commerce and capital markets. This has lead to daunting problems and obsolete understandings of risk relationships and the role insurance can play for both investors and consumers.

Fortunately, ISI’s founders viewed this discouraging situation as an opportunity in disguise. Perhaps the moment had arrived to explore resourceful new products and creative strategies that would better protect the greater community against risk! In late 2007, after determining that a massive void existed in terms of published research and informed leadership, ISI’s founders launched the Insurance Studies Institute. Operating as a non-profit 501(c)3 research think-tank, ISI brings a unique level of experience and energy to insurance-based studies.

ISI’s mission is to foster clarity, fairness, and innovation in the complex matters of insurance based risk management, and in doing so, challenge traditional insurance paradigms. ISI accomplishes its goals by:

Researching the challenges and opportunities presented by the complex structures and issues of insurance. By funding, facilitating and conducting groundbreaking research, ISI will enable individuals and businesses to better mitigate financial risks.

Publishing balanced reports and white papers on industry relevant topics.

Educating industry stakeholders, public policy makers and consumers in insurance based risk management and related industries. Further, ISI endeavors to arm today’s scholars and leaders with the knowledge necessary to shape insurance risk management tools to meet the challenges of newly evolving financial structures.

Stimulating action by promoting dialogue and informed actions to foster industry advancements, favorable public policy, fair utilization of insurance and greater risk protection/financial wellness for businesses, consumers and investors.

Challenging Traditional Insurance Paradigms to Forge Solutions

The insurance industry today wields the power to help and the power to harm. Insurance based risk management is a unique concept in a free market society, but not a new concept. Principals guiding the notion of insurance and risk management have been honed and refined over many centuries, with the goal being to provide protection and benefits to businesses, governments, and individuals. Today, the insurance industry’s impacts are vast – reaching into all realms of modern existence. To demonstrate its immensity and complexity today, consider the following:

The recent catastrophic failures of several major financial institutions created systemic chaos in our economy, and the insurance industry is not immune.

Though scarcely understood by consumers, life Insurance is an asset that can be bought and sold on secondary and tertiary markets, and afterwards, policies can be pooled into investment securities.

Insurance impacts investments, property/assets, lives, estates, travel, agriculture, health, employment, and more. It is virtually impossible for anyone attempting to get through life or to succeed in business if they do not maintain significant forms of insurance to guard against unforeseeable risks. There are more than 150 different types of causes/policies available in the market. (AmPmInsure Community, www.ampminsure.org)

There were 7,948 insurers in the U.S. in 2008 (NAIC) and approximately 350,000 agents, brokers and insurance services (Manta, www.manta.com/mb_33_A2_000/insurance). By the end of 2008, total life insurance coverage in the United States reached $19.1 trillion, and U.S. Life insurers held $4.6 trillion in assets, of which $2.2 trillion were annuity reserves. (ACLI).

The 100 largest U.S. corporate pension plans had over $1 trillion of long-term liabilities as of December, 2008, and were underfunded by $217 billion. (USA Today, 3/21/2009)