AAVE allows anyone to loan/borrow crypto in a trustless, permissionless, non-custodial way. Unlike in the TradFi system where the bank earns a premium on your assets, users can both maintain ownership of their assets and earn passive income when lending. Aave also allows those who are traditionally unable to qualify for loans to have access to borrowing due to its decentralized nature. Lastly, Aave addresses issues within Defi lending like offering stable interest rates and offering flash loans for sophisticated users/developers. 

At its peak, only 2% of TVL in DeFi was insured. There is a massive opportunity for growth as the traditional insurance industry is predicted to be worth $6.4 trillion by 2025. The demand for protection against loss in crypto is extremely high and insurance allows for more capital from institutional parties and whales to be more safely deployed into the ecosystem.