The invention of the insurance industry is to reduce individuals' uncertainties; however, individuals have to pay some amounts to receive such receives, so they usually pay a bit slight higher than their expected losses from future uncertain events. In most cases, people are willing to pay a bit hgiher than their expected losses, as people are most likely to be loss aversion. Insurance companies are able to earn profits from the differences between the expected losses and the fees they are willing to pay.
However, the insurance industry partially relies on the governments' regulations, as people are made to buy certain insurances under regulations; therefore, governments' policies can have significant impacts on the insurance industry. In addition, though it is impossible to say we are facing less and less risk in the future since we may face much newly appearing risk, it is almost definite for the known risk to be lower and lower in the future according to our development and invention, for example, travelling by aircraft or ships has been much safer than a century ago. Therefore, the insurance industry is likely to receive lower and lower marginal profit or revenue from the currently existing insurance services, as the risk tends to be lower in the long term, they have to increase more receives to counter newly appeared risk and serve more and more groups of people who face different types of risk. For the newly appearing risk, the industry may have to bear more risk as it is more difficult to estimate the impacts of the newly appearing risk than to estimate the impacts of the existing and well-known risk.
To conclude, the insurance industry has to be innovative and willing to bear risk in order to maintain or expand their current revenues and profits.
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