How does insurance sector help industry and economy?

Among the ways that insurance positively affects the economy and the industries that comprise it is by its fundamental namture. That is, an insurance policy, by its nature, "assumes the risk" of loss of fortuitous events. Stated otherwise, an insurance contract serves to indemnify the insured from the economic consequences of foreseeable occurrences. In return for the payment of a premium, the insurer becomes financially responsible for the damages sustained by a third party (or by the insured itself in the case of first-party insurance) as a result of an occurrence that is within the ambit of policy coverage.

Were it not for insurance, a business enterprise would ordinarily responsible, from its own assets, for all such financial losses. Therefore, the protection that insurance affords protects the insured from that risk and allows it to allocate assets to business expansion or for other purposes.