Did I answer this already? In part, yes. Also, in part, to develop your plot. The more you know about what happened in the past to create the current scenario, the better able you'll be to make your plot believable.

Think of your own life. At some point, you made a choice. Imagine you had made the opposite choice instead. Would your life be the same, now? Would you know the same people, be doing the same things, have the same problems?

These exercises are intended to help you flesh out your characters and their histories, to make you better able to understand their present as you write about it.