The greatest need of insurance is to safeguard against uncertainties, whether it is natural (earthquake, flooding, fire, etc.) or man-made (accident, arson, theft, etc). Potential uncertainties could occur in terms of loss of life, severe disability, loss of infrastructure, etc. Insurance also encourages savings and ensures that the insured is covered for life and medical emergencies. This ensures mental peace for the insured and their family and about their business.
Insurance also spreads the risk of potential uncertainties over a larger population, which provides coverage at a low cost. The collected premium is used for investment in government bonds and securities, this helping in the growth and development of the country. Insurance also safeguards the businesses against emergencies, thus providing a stability to the business sector and economy.
Hope this helps.