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Insurance Era: Risk, Governance, and the Privatization of Security in Postwar America
Charts the social and cultural life of private insurance in postwar America, showing how insurance institutions and actuarial practices played crucial roles in bringing social, political, and economic neoliberalism into everyday life.
Actuarial thinking is everywhere in contemporary America, an often unnoticed byproduct of the postwar insurance industry’s political and economic influence. Calculations of risk permeate our institutions, influencing how we understand and manage crime, education, medicine, finance, and other social issues. Caley Horan’s remarkable book charts the social and economic power of private insurers since 1945, arguing that these institutions’ actuarial practices played a crucial and unexplored role in insinuating the social, political, and economic frameworks of neoliberalism into everyday life.
Analyzing insurance marketing, consumption, investment, and regulation, Horan asserts that postwar America’s obsession with safety and security fueled the exponential expansion of the insurance industry and the growing importance of risk management in other fields. Horan shows that the rise and dissemination of neoliberal values did not happen on its they were the result of a project to unsocialize risk, shrinking the state’s commitment to providing support, and heaping burdens upon the people often least capable of bearing them. Insurance Era is a sharply researched and fiercely written account of how and why private insurance and its actuarial market logic came to be so deeply lodged in American visions of social welfare.
Actuarial thinking is everywhere in contemporary America, an often unnoticed byproduct of the postwar insurance industry’s political and economic influence. Calculations of risk permeate our institutions, influencing how we understand and manage crime, education, medicine, finance, and other social issues. Caley Horan’s remarkable book charts the social and economic power of private insurers since 1945, arguing that these institutions’ actuarial practices played a crucial and unexplored role in insinuating the social, political, and economic frameworks of neoliberalism into everyday life.
Analyzing insurance marketing, consumption, investment, and regulation, Horan asserts that postwar America’s obsession with safety and security fueled the exponential expansion of the insurance industry and the growing importance of risk management in other fields. Horan shows that the rise and dissemination of neoliberal values did not happen on its they were the result of a project to unsocialize risk, shrinking the state’s commitment to providing support, and heaping burdens upon the people often least capable of bearing them. Insurance Era is a sharply researched and fiercely written account of how and why private insurance and its actuarial market logic came to be so deeply lodged in American visions of social welfare.
264 pages, Hardcover
Published June 11, 2021
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January 12, 2023
Excellent history of the US insurance industry. The book contains six excellent chapters that look at how insurers shaped the line between public and private insurance over time, tried to educate the population about risk, and set the terms of debate around discriminatory pricing. The chapters are all well written, drawing out stories to illustrate the wider point (e.g. the driving simulation education tool). Horan really zeroed in on the intellectual history surrounding national debates about the industry.
The book was weakest towards the end when she tried to argue that feminist scholars erred in arguing that pricing models were inaccurate, and should have instead argued against the entire enterprise of risk classification. Horan won't really engage with questions of efficiency, adverse selection and moral hazard. Sure fine. But there was one fundamental error that suggests a misunderstanding about risk:
This is simply not true. Even if insurers could exactly price an insured's expected risk, the insured would still benefit from the ability of insurers to efficiently manage capital reserves. The reference points to a debate about genetic testing, which is subtly different. In this case, there is no risk because the genes determine the outcome (or come close to doing so), and this is why policyholders would in effect self-insured. An author of a book about insurance making this error is a clanger imo. Nevertheless, the rest of the book is excellent.
The book was weakest towards the end when she tried to argue that feminist scholars erred in arguing that pricing models were inaccurate, and should have instead argued against the entire enterprise of risk classification. Horan won't really engage with questions of efficiency, adverse selection and moral hazard. Sure fine. But there was one fundamental error that suggests a misunderstanding about risk:
"knowing the exact risk faced by each insured individual would effectively place every person in their own unique risk pool, negating the risk-spreading function and making everyone self-insured"
This is simply not true. Even if insurers could exactly price an insured's expected risk, the insured would still benefit from the ability of insurers to efficiently manage capital reserves. The reference points to a debate about genetic testing, which is subtly different. In this case, there is no risk because the genes determine the outcome (or come close to doing so), and this is why policyholders would in effect self-insured. An author of a book about insurance making this error is a clanger imo. Nevertheless, the rest of the book is excellent.
Displaying 1 of 1 review