Insurance

50 Things That Made the Modern Economy

BBC

Business

4.8 • 2.6K Ratings

🗓️ 4 February 2017

⏱️ 9 minutes

🔗️ Recording | iTunes | RSS

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Summary

Legally and culturally, there’s a clear distinction between gambling and insurance. Economically, the difference is not so easy to see. Both the gambler and the insurer agree that money will change hands depending on what transpires in some unknowable future. Today the biggest insurance market of all – financial derivatives – blurs the line between insuring and gambling more than ever. Tim Harford tells the story of insurance; an idea as old as gambling but one which is fundamental to the way the modern economy works. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Lloyds Coffeehouse, Credit: Getty Images)

Transcript

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0:00.0	50 things that made the modern economy with Tim Harford.
0:11.3	How can I help you?
0:15.8	Yeah, I wanted to place a bet that I Tim Harford was going to die in the next year.
0:21.3	Could you give me odds on that?
0:23.5	Right.
0:25.5	Can I take a bet on my own death?
0:27.7	I'm not too sure. Just hold the line at the moment please.
0:30.9	Thank you.
0:37.9	Hello Mr Harford.
0:39.1	Hello.
0:40.1	Hello, so I was just keeping waiting there.
0:42.1	Okay, no, basically we do bet on death because it's a negative bet you stay.
0:50.5	That was me, almost a decade ago, trying to take a bet on my own life with one of the UK's leading betting shops.
0:57.3	William Hill should have taken the bet. After all, I'm still alive.
1:01.7	But they won't gamble on life and death.
1:05.9	A life insurance company by contrast does little else.
1:10.4	Legally and culturally there's a clear distinction between gambling and insurance.
1:16.0	Economically, the difference is not so easy to see.
1:19.9	Both the gambler and the insurer are agreeing that money will change hands depending on what transpires in some unknowable future.
1:28.3	Gambling tools such as dice, date back millennia, perhaps 5,000 years in Egypt.
1:34.5	Insurance may be equally old.
1:36.9	The code of Hamir Arby, a law code from Babylon in what is now Iraq, is nearly 4,000 years old.
	...

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