Private spanner in public works? The corrosive effects of private insurance on public life

Abstract

Contemporary societies are not only “risk societies”, but also insurance societies. While the shift of systemic risks from the community to the individual is a distinctive trait of modernity, research on the consequences of this process has focused almost exclusively on welfare state responses aimed at re-collectivizing societal risks. Individual-level reactions associated with the need for a private safety net against the uncertainty brought by risk societies have been largely overlooked. What happens to a society and its individuals when private insurance becomes commonplace? Focusing on Germany, we use the data of the German Socio-Economic Panel (1984–2018) to investigate the attitudinal antecedents and consequences of contracting private insurance. As one of the most important sources of private welfare, life insurance attracts risk-averse individuals who are highly concerned with public economic affairs and see the market-based solutions of conservative parties as the best way to safeguard their economic security. While short-term attitudinal effects are absent, a longitudinal approach reveals that becoming insured gradually increases economic security but also entails withdrawal from public life and aversion to parties that support social redistribution. The loss of dynamism of a society may thus be related not only to public welfare but also to a private institution at the heart of the financial markets, which moreover has privatizing, welfare-eroding effects. The paper argues for a more general sociology of insurance.