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The insurance industry wants a world of no accidents, as long as the world does not know its accident-free
by neeleshs 10y ago
The insurance industry wants a world of no accidents, as long as the world does not know its accident-free
- enraged_camel 10y agoHow will the world not know that it's accident-free? Those statistics are freely available.
- neeleshs 10y agoThe comment was on the lighter side, may be a smiley would've done the trick
- cm2187 10y agoParticularly given that in most countries, insurance premiums have to be backed with actuarial calculations. So it will be reasonably transparent, at least to the regulators.
- analog31 10y agoWe will know, when the price of insurance goes down, assuming the market is competitive.
- hugs 10y agoIt won't be accident-free, more likely accident-rare. There will be the occasional accident, but because it is so rare, it will be heavily covered in the media, thus skewing people's perception of the risk. (See: plane crashes)
- dragandj 10y agoIsn't it how it works today? The insurer makes profit by taking the difference between the "real" risk and the risk that the customer is willing to pay for. I bet that the insuring companies have much better estimate of that risk than their customers.
- eridius 10y agoWhy would they want that? Their job is to accurately assess risk, and then charge appropriately for insurance. If the risk goes down, so does the amount they charge. If your argument is that perception of risk will be higher than actual risk and therefore they'll be able to sustain a higher margin on their insurance policies, then I'd point out that you're completely ignoring competition. If one company does charge significantly more than they have to because the public perception of risk doesn't match reality, some other company will come in and charge less for the same policy, thus driving the price back down to an appropriate level.
- taneq 10y agoBecause their margin is a percentage of the total insurance amount.
- eridius 10y agoWell, the cheaper the insurance, the more of it they'll sell. That said, if insurance gets cheap enough, surely they can justify having higher margins because they still need to meet their operating costs.
- taneq 10y agoIs insurance not somewhere near market saturation in your local market? Sure, there's a limited amount of flex if prices drop, but there isn't that much room to grow.
- eridius 10y agoDepends on the type of insurance you're talking about. In any case, if risks decrease and therefore insurance costs decrease, besides pushing for higher margins, insurance companies could also push for having more comprehensive plans that cost more than the basic ones. People who only opt for the basic plans now might shell out for the more comprehensive one if the prices overall drop, and so the more comprehensive ones would allow the insurance companies to retain their margins.