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Insurance is not transfer of risk. Having many ensurees takes the risk away. It becomes inevitable and predictable. Simply a cost.

• baddox 10y ago
  The cost is the risk. Many people will pay more into insurance than they get out of it (that's obviously a mathematical inevitability), so those people viewed in isolation would be better off self-insuring. Of course, no one knows ahead of time if they're the ones who will be healthy.
  • geon 10y ago
    Im talking about the insurance companies. They dont take any risks, since they know in advance how many accidents that will happen. To them it is just a forseeable cost. The risk of each client is not transferred, but eliminated.
    • colomon 10y ago
      That's simply not true. They work very hard to understand and control the risks they take. But there is an entire field of reinsurance[1], which is insurance for insurance companies against the times they get it wrong, such as major disasters. And even then I suspect you'd find a big enough disaster would break the reinsurance companies too. [1] https://en.wikipedia.org/wiki/Reinsurance https://en.wikipedia.org/wiki/Reinsurance
      • tankenmate 10y ago
        Which is why reinsurance companies take out so called "super cat" (super catastrophe) insurance. Some of the world's bigger super cat insurers are Berkshire Hathaway subsidiaries; National Indemnity is probably the best known one.
• greenshackle2 10y ago
  It's still a risk. If everyone's houses burn down at once the insurance company will be SOL unless they insured themselves against catastrophes (which they probably do). Also, arguing by definition is pointless, put since we're already debating pointless semantics, google 'risk transfer' and see what comes up.