In the human history, before the emergence of industrial societies, no class has existed in size and collective destiny as the working class. After the emergence of industrial works and industrialists, the issue of securing the minimum livelihood for the labor forces working in the industrial units and later, in the service and commercial institutions became a social necessity. In the modern societies, life without insurance is inconceivable. The insurance institution with all its supports, activities, services, and plans, is ‘the most significant socioeconomic achievement’ of human being. Social insurances were founded and formed with the aims of supporting the labor forces against the losses of life and financial burdens, securing their minimum essential needs, and as a compulsory saving for their old ages, senility, and injuries. Although in some societies, social insurance covers all the classes and groups, its key focus is on working classes including wage earners, women, handicapped, vulnerable groups, unemployed, and the poor – since the main objectives of insurance is adjusting income distribution, decreasing the economic inequality, securing the minimum life requirements (including income, hygiene, annuity, etc.), and transferring risks. However, this fact still exists that the salary and wages of the labors are not in their optimum level.
According to Article 2, Social Insurances Bylaw of I. R. Iran, securing the insurance premium is imposed upon the state and the insurers and helping to meet the distributive justice and human development are some of the inherent values of such an approach. Thus, insurance is a significant mechanism for securing the people’s rights and social justice. In fact, any effort in social policymaking to make the insurance system more efficient that relieves people’s miseries especially for the vulnerable groups such as labors is reasonable, farseeing, and realistic.
However, a question remains here: beside the compulsory social insurances, what is the proportion of the voluntary insurances in reducing inequalities among working classes and the underprivileged?
The derived data from the global comparisons by the professional insurance institutes, indicate that those countries that not only have widespread social security systems but also offer extensive voluntary insurance coverages and their people, businesses and industries have sufficient guarantees and insurance services and covers, experience lower levels of inequality and social justice is more secured in them.
Perhaps, in the first look, the voluntary and commercial insurances are more inclined to cover well-off groups and huge trade and service complexes but in fact, insurance either in its compulsory or voluntary modes will eventually help preserve the social justice. Not only bigger businesses or industries require robust insurance coverages, but the smaller businesses also need reliable insurances since they will be able to compromise for the damages or at least can continue their business and this means lower unemployment among the labors and less underprivileged groups in the face of crises.
Sometimes, when encountered with huge health costs, labor households, due to the lack of appropriate insurance covers, go below the poverty line. There are two approaches that labors faced with uninsured costs take either to refer to supporting institutions such as insurance or completely ignore some of their basic needs such as food or education in order to pay for their costs. The latter might have serious consequences for the affected households and even the society at large.
On the other hand, not only the direct costs but also the indirect costs such as time and transfer can consume household resources. Those households that encounter with serious shocks such as acute diseases may try to compensate for their short-term effect on their welfare by sending their children or other family members for unofficial jobs and this will intensify the effects of poverty in the long term. The health costs are considered a shock for the people and the households. If a family member loses his ability for work, then the costs will become income shocks that eventually lead to social poverty. In this case, insurance as a supportive institution will be highly helpful with its efforts to distribute risks and compensate for the damages and losses.
The image of a relatively good and prosperous life for the labors without considering economic growth, active and thriving industrial units and responsible, entrepreneur, and blooming private sector is impossible. However, the experience of the eastern bloc did not bring prosperity, welfare, and justice for the proletariat. Industrial growth in big and small industries and public or private without the support from the state, banking system, and particularly ‘insurance industry’ is impossible. Therefore, social insurances such as health insurance directly and commercial insurances indirectly contribute to the fair distribution of social development and justice.
Industries and businesses with the capability for securing employment and taking up income opportunity can come to help by paying a portion of the worker compensation premiums. However, this does not evade the state responsibility for the development of supportive systems and welfare for the labor and other social classes. Therefore, the economic and commercial institutions can help protect the economic security resources and social justice by providing employment, paying for a substantial portion of labors’ insurance premiums, and paying taxes and tolls to the state and the supportive institutions such as insurance and pension funds.
Insurance can help industries, funds, corporates, and etc. to experience less severe crises and in the case of losses and perils, not to face a total closure or bankruptcy. This will eventually help the labor forces have the opportunity to continue to earn their livelihood and enhance the sustainable development and distributive justice.
In fact, insurance is one of the ways to secure peace and welfare in reducing individual and household stresses. There is no need to explain that healthy and stable human resources are the prerequisite for any development and excellence for any society. Thus, having such mechanism in mind, it can be said that scaling up insurance coverages and supports for the labors will increase their life expectancy, enhance their quality of life, improve their health level, reduce poverty, adjust income distribution, mitigate risks and uncertainty among the labor forces in future (retirement age), and improve various socioeconomic indices among the vulnerable social groups. At the same time, developing insurances is one of the strategies of democratic states in order to have a more resilient, sustainable, and just society. One of the most significant tasks of the insurance industry is helping reduce social inequality, securing economic stability, and providing an instrument for having a safer society and more dynamic economy. It also enhances labor’s life that comparatively depends upon direct and indirect insurance covers and services.
“Thus, insurance is an instrument for achieving a better and more humane world.”