>>Insurance is invariably a "for profit" enterprise so the utility or return across all participants has to be lower than the value invested/paid.

This is wrong and the reason you are confused about the argument. If insurance is priced fairly all parties benefit utility wise. It's true that the buyer has negative expected value money wise and the seller positive one but as the utility function is concave both parties benefit. The important thing is to be able to see value in insurance. Once you are able to see it you will understand why it's worth a premium.

One natural question is why the insurer can afford to sell the insurance and not lose expected utility. The answer is that the insurer has a bigger bankroll and the utility curve is flatter for them than it is for the buyer. That's why they can offer a lower premium than an individual in similar position to the buyer would be.