By Chris White
COVID-19 has hit our world like an express train. Even if we’ve avoided catching the virus, we’re locked down, we can’t meet our friends and family in person, church has gone online, most schools are shut, some of us have lost our jobs, and most still employed are working from home. Compared with just a few months ago, things are totally different.
We’re experiencing risk first hand. Mostly we think of risk as something which may happen – good or bad. Now we’re experiencing risk actually happening.
Risk is fundamental to our lives. Mostly we don’t know what will impact us – our health, survival, accidents, employment, financial security, etc, and of those we love.
As Christians we trust that a loving God has our best eternal interests at heart, in both the uncertain environment in which we live on earth, and in the light of the hope of eternal life in a renewed creation which is fundamental to our faith.
Here’s a few notes on how Christians might view insurance and investment, two key financial activities involving risk.
Insurance
Insurance has a long Christian history. Many early life insurers and friendly societies were established by Christian philanthropists and self-help groups to provide death and sickness cover, particularly for those without reserves of wealth, who traditionally relied on family and church when disaster struck. (Other early types such as fire and marine insurance were often established by self-help groups in the relevant industries, e.g. shipping.)
As Christians we might at first think we should ignore future risks, in that Jesus says God looks after the birds of the air and the lilies of the field (Mt 6:26,28). However, if we read the whole passage, Jesus does not tell us not to make provision for life’s ups and downs, but rather not to worry about them:
‘Do not worry about … what you will eat or drink, or about your body, what you will wear… But strive first for the kingdom of God and his righteousness, and all these things will be given to you as well.’ (Mt 6:25-34)
Of course, we can’t insure against all risks, including the most important ones: loss of friendships, love, sense of worth, faith. No insurance policy will protect against marriage failure, personal suffering, or ensure eternal salvation. These are risks we must assume, and as Christians we must trust God’s providential care, as well as exercise faithful stewardship of our life. The only way to avoid many risks is to retreat from the adventure of life, but Jesus teaches us not to just bury the one talent we may have in the ground (Mt 25:24-25).
There are some risks we can and should insure against, to protect our ability to serve others, including our families, our Christian community, and our neighbours. Even if we (fortunately) avoid loss, investing in insurance enables us to help those others—most of whom we don’t know—who (unfortunately) suffer losses. And from the story of the good Samaritan, our “neighbours” include people we don’t know.
Ensuring we have made proper provision for our own needs, and those of our family and others dependent on us—including in our context the risks against which we can prudently insure—is something to which the early Christians were enjoined by Paul, even though Christ’s return was imminently expected (1 Thess 4:11-12; 2 Thess 3:6-13).
Generosity to others less fortunate than ourselves is a way we—individually, as a church, through para-church and other agencies, etc—can equalise the impact of risks, including the circumstances to which we were born. After all, most of us are just fortunate we live in a wealthy country with good education, health care, among many other advantages.
We have the examples in the early church of Christians selling possessions to support those in need (Acts 2:44-45; 4:32-37) and making specific collections for the needs of others of the faith (Acts 11:27-30; 1 Cor 16:1-4; 2 Cor 8:1-15).
Even when we think others may have been imprudent by not insuring (e.g. some who lost everything in the recent fires), we need to remind ourselves that some people end up living “hand to mouth” and immediate priorities can—perhaps imprudently, with the benefit of hindsight—squeeze out things like insurance.
Investment
Investment is the employment of assets, usually money, under a plan which it is hoped will produce a positive return in the foreseeable future (i.e. return or give back more than outlaid).
All investments involve risk – risk that the organisation we invested in is bankrupt, or, more often, that the price others are prepared to pay for it has reduced (e.g. on the stock exchange). This is what has happened catastrophically in recent weeks due to the economic impact of COVID-19.
A very important investment principle for reducing risk is diversification, epitomised by the saying “don’t put all your eggs in one basket.”
Another aspect which can be an important risk issue is liquidity: if an investment is not redeemable for a period, is there some effective way of selling it if circumstances change and money is needed now?
Of course, risk is not all one-sided – over the long-term, riskier assets such as shares outperform less risky assets such as bonds. In general, if riskier assets are purchased and markets rise, the investment should do well.
A good investment principle is: the higher the risk of an investment, the more you need in separate, stable assets to protect you in case it goes bad.
An important feature of human psychology, however, is that the average person is twice as risk-averse to a possible unfavourable outcome as they are risk-attracted to a favourable outcome which is equally likely, but in the opposite direction. And generally, as people age, they tend to prefer lower risk assets because they have less time to wait for markets to recover after a drop.
Turning now to a Christian perspective on investment, there is a close analogy with the points I made earlier about insurance. Jesus does not recommend making no provision for the future, just that we should not worry about it so it consumes our attention – ‘You cannot serve God and money’ (Mt 6:24).
There are four principles of investment, which we can apply Christianly:
Money/assets should be put to work, just like God put Adam in charge of the created order (Gen 1:26-28), and to work in the Garden (Gen 2:15).
Investments should be fruitful or profitable: our first parents were to fill the earth and to flourish (Gen 1:28); Jesus teaches in the parable of the sower that seeds should be sown to produce a good return (Mt 13:23).
We should be future-focused, longing for the return of Christ; we should be ready even if the wait seems long – as Jesus taught in the parable of the wise and foolish bridesmaids (Mt 25:1-13).
We should take account of risk: investment must be prudent – only taking appropriate risk, avoiding greed, diversifying our assets.
We serve a God who takes and manages risks – in particular, creating humanity with free will, committing to Abraham as the father of a chosen people, and, supremely, becoming incarnate as the vulnerable child Jesus.
We too must manage risk rather than seek to avoid it, such as burying our talent, even if others seem to have more talents (Mt 25:24-25).
We must trust in God’s providence, that just as the apparent bleakness of Good Friday became the triumph of Easter Day, so our reverses, perhaps not apparently to be recovered in this life, result in eternal triumph.
Jesus’ teaching encourages us to use our assets wisely:
We can squander them (like the prodigal, and as humankind has done in our treatment of our environmental assets)
We can hoard them (like the one talent man, who focused on his master’s wrath rather than his generosity)
We can instead invest by supporting the church and the needy, plus many good causes; both now, and also in the future (by saving for subsequent distribution later in our lifetimes or through our wills)
These “assets” can include our time and talents or experience, as well as our money; giving money without engaging at a personal level can be rather sterile, and avoids the risky personal engagement we are called to show, particularly to the poor.
Paul Stevens, an expert in Marketplace Theology, argues that Luke’s juxtaposition of the parables of the shrewd manager and the rich man and Lazarus shows that the salvation of the rich depends on the poor (Lk 16). The shrewd manager took an enormous risk and used his wealth (power) to make friends, which is to eternal benefit, whereas the rich man took no risk, and ignored poor Lazarus until he was in agony in the hereafter. Stevens argues that the thrust of Luke 16 is the call to make friends with the poor, the sick, the powerless, the stranger and the refugee. This will provide a real return on our eternal investment, but it needs us to step outside our comfort zone – to take on the risk involved.
These notes rely on two articles (“Insurance” and “Investment”) by R Paul Stevens in The Complete Book of Everyday Christianity eds Robert Banks and R Paul Stevens, IVP, 1997.