3 ms·
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 i
by 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 agoIm 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 agoThat'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 agoWhich 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.