But the whole point of insurance is to collectively spread the risk, so that when things do go bad, you are not on your own. By definition, people in aggregate

But the whole point of insurance is to collectively spread the risk, so that when things do go bad, you are not on your own. By definition, people in aggregate pay more for insurance than what the insurance pays them back (otherwise the company would go bankrupt!). Insurance is paying for peace of mind. Most people are paying more premiums than insurance is paying them back.