The insurance industry has been labelled indispensable to the global economy and more than just a risk manager for businesses and consumers.

With more than $US5.8 trillion ($7.6 trillion) in cash and assets, the industry is a source of long-term capital and provides stability to financial markets, an Insurance Information Institute white paper says.

“Insurance is a necessary precondition for many economic activities that would not – or could not – take place otherwise,” the paper says.

“Without the guarantee of insurance (and reinsurance), most businesses could not operate as they do today, and construction projects could not go forward.

“Most consumers would not be perceived as good credit risks and could not borrow money from lending institutions.

“Indeed, the list of contributions made by the insurance industry is extensive, benefitting all aspects of the US and global economy.”

The white paper divides the industry’s role into three categories: safety and security; economic and financial stability; and development. In the latter area, insurers are “innovation catalysts”, providing risk coverage for inventions across all fields.

“The ability to measure the cost of these new risks helps to generate price signals for the economy and target resources to productive uses. Without insurance, the uncertainty of outcomes and the potential catastrophic cost of a large claim could stifle innovation.”